To maintain insurability, two key principles must be maintained: The first is that insurers must be able to assess the likelihood of a loss and its potential cost. The second is that insurers must be able to charge a risk-adequate premium for each risk. If this is not the case and there are systematic cross-subsidies or inadequate pricing, then the insurance system will not be sustainable.

Specifically for the short term there is a lot of discussion about alternative capital and the impact this will have on pricing and the reinsurance business in general. At Allianz we use a range of instruments, from traditional reinsurance through cat bonds and cat swaps, to manage our catastrophe risk landscape. Having access to capacity from different sources, with different durations for example, provides us with options to optimize our protections. So I see an opportunity for traditional players to work with these alternative capital providers and expand the scope of risks we cover, improve capital efficiency and further improve our resilience.

Ulrich Wallin, CEO, Hannover Re

The greatest challenges are the continued low interest rate environment together with the increasing competition for non-life reinsurance business. The greatest opportunities lie in the growth potential in the emerging markets and in partnering with insurers in developing new innovative business opportunities.

William Donnell, President, U.S. Property & Casualty, Swiss Re

Challenges and opportunity usually go hand in hand, so I'm not sure it's always easy to separate one from the other.

For example, TRIA is set to expire in 2014, which would be a blow not only to the insurance and reinsurance industry but also to business as well as the average U.S. citizen, who will feel the brunt of it in the form of increased taxes. Swiss Re has been publicly advocating support for a continued government backstop because unlike most natural catastrophes, major acts of terrorism remain uninsurable by private markets. Terrorism cannot be modeled with accuracy because terrorists are unpredictable. Terrorists actively work against being detected so they can inflict as much damage as possible.

The same isn't true for natural disasters, and the U.S. insurance industry simply isn't large enough to take on this scale of risk and put in jeopardy all the other good work that it does in helping people recover during hard times. Public/private cooperation through a government backstop can ensure people in this country remain protected.

While expiration of TRIA is a short-term risk, now is also the time to start taking action on longer-term risks as well. Our Americas CEO Eric Smith said this year that climate change is one of the biggest long-term threats to our industry, and he is right. Over the past several decades we have seen natural catastrophe losses roughly double every 10 years, and this is clearly unsustainable. Climate change is causing the ocean levels to rise, and during Hurricane Sandy this meant that storm surge was worse than it would have been 50 years ago. Furthermore, as part of our work with Mayor Bloomberg's administration we have identified that a future storm similar in strength to Sandy would cause several times more damage than Sandy did as water levels would be higher still. This is a threat not only to the industry but to people across the country.

But with almost every threat comes an opportunity. The insurance industry, with the data it has at its fingertips, and with its ability to evaluate and price risk, is the ideal sector to work with governments to develop new innovative ways to manage the financial impact of severe weather events as well as increase their resilience to them. As an industry we cannot prevent Mother Nature from taking its course, but we can improve how we stand up to and recover from it.