By this time you're probably packing up your laptop and gettingready to head out the door for some holiday festivities (try not towork too much over the break!).

But since everyone is compiling their lists of top stories andpredictions, it's as good a time as any for us to weigh in.

From my POV, for what it's worth, here are some of the top2011 stories that impacted insurance—and that may carry over into2012:

• The year of the cat. From the Japaneseearthquake and tsunami right up to the Midwest blizzards of a fewdays ago, 2011's unprecedented weather events made it clear thatwhen it comes to natural disasters, you can run but you can't hide.According to A.M. Best, catastrophes cost the U.S. P-C industryabout $38.6 billion in losses during the first 9 months of 2011, up140 percent from the same period in 2010. Which leads to:
• The hardening market. Most industry analystsare predicting that the sheer volume and cost of 2011's cats willfinally reverse the seemingly endless soft market. Although noteveryone agrees that hardening is inevitable, it's probably a safebet that at the very least we'll see some tightening of pricing andavailability in property coverages.
• The impact of world events. Egypt, Libya andthe ongoing European economic crisis: If there was any doubt thatwe're living in a global economy, the domestic impact of these bigevents is proof. And with Kim Jong-Il checking out, we may be backon high alert for the sort of nuclear threats that have beensuperseded by economic disasters in recent years.
• Weinergate. Although you may have alreadyforgotten the silly scandal involving Anthony Weiner and a cellphone, the potential liability of social networking, cyber hackingand online risk will only grow, especially as more users transitionto mobile functions.

What issues are ongoing and growing in 2012?

• More cats. NOAA is predicting a rough winter for the continental U.S., andthat's just through February. Then there's tornado season,hurricane season, and non-specific random disaster season,where stuff like earthquakes hit the East Coast. Is climate changereal, or are we just going through some cyclical bad-weatherperiod? The point might well be moot since the losses justkeep coming.
• More supply chain disruptions. The combinationof cats, floundering economies and political unrest began to take aserious toll on global supply chains last year. Just yesterday, anexplosion at a Chinese plant supplying parts to Apple isthreatening to disrupt iPad 2 production (oh, and it killed somepeople, too). Scenarios like this are sure to become morecommon in an increasingly connected—and unstable—globaleconomy.
• A growing emphasis on ERM. The Jerry Sanduskyscandal underlined the vulnerability of organizations of all sizesand types when it comes to the bad behavior of one rottenapple. The once-sacrosanct area of college sports is increasinglycoming under scrutiny in light of scandals involving SyracuseUniversity and Ohio State. More than ever, it will be importantfor organizations of all sizes and types to have a clearunderstanding of potential risk and building solid risk managementsystems into the very core of their operations.
• More specialty business. With so many things(cats, politics, the economy, the soft market) out of theircontrol, it only makes sense for independent agents to invest inniche businesses they understand and enjoy. However, you can'tjust throw a dart at the board and hope it hits the most popularoffering. Specialization requires developing a whole new skill set,and it can open the door to increased E&O liability if you'rejust talking and not walking the walk. But even with thesecaveats–and even if the soft market wanes in 2012–I doubtwe'll see a reversal of this trend.
• Political focus on insurance issues. In 2011,our elected officials proved themselves to be utterly shamelesswhen it came to making their opponents look bad–no matter how badlythat polarization and gridlock affected their constituents. Nowthat the presidential election year is here, they'll probably beramping it up even more. Although for the mostpart insurance has managed to fly under the radar (at leastwe're not working in the banking industry), don't be surprised ifmore insurance issues crop up. NFIP and crop insurance reformwill probably get more attention, as well as fine-tuning ofthe function of the Federal Insurance Office.

What trends do you think will most impact your business in2012?