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Regulation remains CEOs’ major concern: PwC

In one year, the availability of capital has gone from being insurers' second-biggest concern to their 16th-biggest, according to a PwC survey.

The change reflects the upsurge of "hot money", which insurers have only noted recently.

The burden of regulation remains insurers' chief concern, but fears over the scarcity of capital are fast subsiding in 2013, according to a major survey by the consultancy.

Indeed, more senior executives are now troubled by the consequences of too much capital.

"Excess capital and capacity have resulted in one insurer not adopting underwriting discipline in their drive to grow the top line," a Singapore president of a non-life firm told PwC.

"Ultimately, there will be casualties for insurers adopting such approaches," he added.

In 2013, regulation is the chief worry in all regions except the Middle East and central Asia, where bad business practices such as mis-selling are causing the most unease.

An Indian consultant warned PwC there was a risk that banks acting as insurance agents would "thrust [their policies] on unwary customers at exorbitant rates".

A Czech CFO blamed competition, which they said had driven bad business practices, while a respondent from Brazil said: "This market is not the most ethical or transparent in the world. It could face confusion as the market changes."

The economic climate provided the second-biggest fear in Europe, the fifth-biggest in the US and the eighth-largest concern in East Asia and the Pacific.

Worries over investment performance rose two notches over the year to become insurers' number two concern.

"We rely too much on investment income; this could hit us in the face easily," said an official from a non-life insurer in the Netherlands.

The issue is reinsurers' top worry, but provided fewer concerns to life and non-life insurers.

Natural catastrophes were non-life insurers' number one fear and reinsurers' number two worry.

A manager at a New Zealand insurer said: "If the 'big one' happens soon, coverage is far too high and products are still poorly designed. Catastrophe models are simply wrong. We will be in a real mess."

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