With 2012 about to arrive, NU spoke with some of the key figures in the E&S/Specialty Markets arena to hear their assessments of where the biggest opportunities will be found in the year ahead—and to get their take on the greatest challenges that will have to be faced over the next 12 months.

Hank Watkins President Lloyd's AmericaWithout being able to predict the nature or scale of the disasters we'll experience in 2012, the key areas of concern for us are sluggish investment returns, surplus capital and relatively modest increases in premium rates. Against this backdrop, we continue to face uncertainty and delay in the European and U.S. regulatory environments. The risk of increasing compliance costs has not diminished and poses yet another challenge to the market's competitiveness. These realities will make disciplined, responsible underwriting as important as ever in 2012.

Alan Kaufman Chairman & CEOBurns & Wilcox I do not anticipate that 2012 will be much different than 2011. The main reason is due to the overall U.S. economy. The world economy also has an effect. Rates will remain relatively flat, both in property and casualty, except for specific areas of the country where property rates may harden in small percentage points. I do not see rates weakening, due to the cost of reinsurance and some of the standard markets having difficulties with their loss experience in 2011. The personal-lines area in our segment of the specialty-insurance world in the latter half of 2012 will harden, with small percentage increases.