The top 10 risks facing the insurance industry

As for the number one rated risk, the current macroeconomic environment presents the industry with a broad range of cost pressures. The global financial crisis continues to put a strain on insurers. Adjusting to a slower pace of growth, as insurers' have been trying to do, affects their ability to provide a product with an acceptable ROI and, also, customers' need to purchase coverage.

"Macroeconomic trends pose an overarching challenge because, at present, they tend to distort efforts to identify, differentiate and retain potential new customer groups — hence we see this is as the top risk for 2013," the report states. To deal with the challenging economic situation, "insurers must look to underwriting margins."

In addition, the regulatory climate, both in the U.S. and abroad never ceases to tighten the reins of both small and blue chip companies in the sector. Between Solvency II in Europe and 50 state-level regulators and attorneys general in the U.S., along with the Federal Government, there is no shortage of necessary regulatory compliance. And let's not forget about Asia, where regulation focuses more on regional markets and different regimes, and South Africa, where a handful of regulatory measures are being introduced at, some would say, rapid-fire succession. "In the UK, you would spend 10 years on this and we are doing it all in two or three," said Andre Zeeman, chief actuary at Sanlam, a South African financial services firm.

The report was based on a survey of more than 65 insurance companies across the globe.