A recent report by Aon Benfield, "Evolving Criteria--Keeping Pace with Rating Agency, ERM and Regulatory Developments," notes that the lack of guidance on proposed new regulations has been the "primary difficulty" for insurers.

"The key themes [of regulatory efforts] include more robust capital requirements, trend toward internal capital modeling, trend toward de-risking of the balance sheet and fair value approaches, and additional government oversight," the report notes.

A new Swiss Re sigma study, "Regulatory issues in insurance," states that tough capital requirements on insurers because banks were undercapitalized during the crisis would be "misguided." The study notes, "While, at first sight, more stringent capital requirements appear to create additional safety for policyholders, in fact, they may give rise to distortions that ultimately hurt policyholders."

The sigma study states that insurers and regulators should improve their monitoring and understanding of liquidity risks. "While the bulk of traditional insurance business does not give rise to liquidity risk, some non-core activities during recent periods of severe market stress suddenly required additional liquidity," according to the report.

Ward said the reinsurance industry should work with regulators now, as rules are currently being crafted that will govern the financial services industry in the future.

Lloyd's, he added, has spent ?200 million ($308.5 million at current exchange rate), so "we need to make sure that Solvency II benefits the marketplace, or it will be a waste of money."

The industry, he said, is at a critical point with regulators implementing significant changes, adding that he hopes the United States will remove discriminatory collateral requirements against "alien" insurers.

He also pointed out that the insurance industry has weathered the global crisis well. "We are not the banking sector, and we need to continue to show leadership in reminding governments of the positive role we play. These are points that the industry has been making throughout the post-crisis period, but we need to keep making them."

Ward also observed that there are challenging market conditions ahead and that 2010 looks to be a "difficult year."

"The industry has too much capital, there is downward pressure on rates, and governments are trying to shift risk to the private sector," he said, adding that claims frequency is also rising as a result of the economic recession.

If he had a magic wand, Ward said he would ask for an "$80 billion loss, no loss of life and no affect on Lloyd's."

Additional reporting by Phil Gusman