Burdensome red tape is a bigger financial worry for the insurance industry than whirlwinds or hurricanes, a survey has found.

A study of nearly 140 insurers, brokers and experts across four continents found that too much regulation ranked higher than terrorism, fraud or an equity market crash among concerns for industry leaders.

Regulation even ranked ahead of worries traditionally seen as central to the insurance industry, such as actuarial assumptions, predictions about lifespan and demographic trends, Price-waterhouseCoopers and the Centre for the Study of Financial Innovation, a think-tank, discovered.

David Lascelles, the editor of the latest annual Banana Skins survey carried out by the two organisations, said: “Overregulation is clearly a major issue for a large part of the financial sector, not just banking. It also appears to be a global phenomenon.”

Respondents complained about new regulations governing capital, conduct of business, accounting and governance.

As well as Solvency II, a forthcoming set of standards governing insurers’ capital adequacy, insurers also face an overhaul of financial reporting standards.

More than 100 of those who replied to the survey said that excessive regulation is loading companies with costs, distracting management and getting in the way of competition.

PwC and the CSFI spoke to life, property and casualty insurers in 21 countries, as well as brokers, reinsurers and industry observers. More than 80 per cent of respondents were senior executives or directors, they said. A large percentage of those taking part in the survey were based in the UK.

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