Natural catastrophes and regulation are the biggest worries for non-life insurers, according to this year’s Insurance Banana Skins survey.

“Although the incidence of major catastrophes such as floods and earthquakes has been less severe in the past year, these remain non-life’s top concern,” the report says.

Regulation ranks second for non-life and tops the overall industry table, while investment performance and business practices have moved up the list compared with the 2011 study.

New regulations are seen as swamping the industry, creating a new class of compliance risk, according to the report from the Centre for the Study of Financial Innovation (CSFI) and PricewaterhouseCoopers.

“The fear is that these initiatives will load the industry with heavy costs and distract management from the task of running profitable businesses.

“Sharpening these concerns is the fact these reforms are being introduced at a time when industry profitability is being hurt by poor investment performance.”

Reinsurers rank investment returns as their leading concern, followed by natural catastrophes and regulation.

Companies in Asia and the Middle East say business practices are their major worry – a concern that ranks fourth in the overall survey.

“Despite recent improvements, there was still a sense that insurers lacked full commitment to eliminating this risk, particularly in emerging markets where regulation has yet to catch up,” the CSFI says.

The survey includes 662 responses from 54 countries in March and April. Twenty-eight responses were from Australia and 43 from New Zealand.

Property and casualty/non-life represent 35% of respondents, life insurers 26%, reinsurance 7%, broking/intermediary 6% and “other” 26%.