The global financial crisis is the worst experts have seen and worse is yet to come, according to a local actuary’s report examining the effect on the industry.

Actuarial firm Finity Consulting says while there have been cycles and crises in general insurance, they have not been driven by the broader economic cycle.

“The halving of equity markets has made a nasty dent in asset values,” the report said. “For those companies… who have already taken a capital hit the question is now whether to stick to the investment strategy or to move forward with a more defensive strategy.”

Finity says while the Australian Prudential Regulation Authority’s (APRA) strict line on assets and requirements for directors gives good defence against financial stress, it does not diminish the seriousness of the situation.

The report identifies lenders’ mortgage, consumer credit, builders’ warranty, trade credit, professional indemnity, directors’ and officers’ and workers’ compensation as the classes most likely to affect the industry in the financial crisis in terms of the frequency and size of claims.

“In turbulent times opportunities do emerge and those counter-cyclical thinkers with the financial and emotional resources to take advantage of such opportunities could be the ones who better weather the storm and are the first to enter calmer waters,” the report said.