The influx of alternative capital has become a focal point for the reinsurance industry – and that’s no surprise given its potential impact.

But a recent poll reveals almost three-quarters of insurance and reinsurance companies aim to continue using traditional capital.

Global reinsurance broker Guy Carpenter’s second annual survey questioned more than 100 executives at the Property Casualty Insurers Association of America annual meeting in Boston.

About 73% of respondents still plan to leverage traditional reinsurance vehicles as a capital source next year.

However, while those favouring alternative capital remain in the minority, their number is growing.

In the same survey last year 16% planned to utilise capital markets. This time the figure increased to 18%.

The research also identifies key drivers of profitable growth in the industry.

Geographic expansion tops the list, with 33% of respondents identifying it as the biggest opportunity to grow their business next year.

This is followed by new products (24%), which was top last year, and new distribution channels (23%).

Mergers and acquisitions (M&A) are cited by 15% of respondents, compared with just 7% last year.

Guy Carpenter CEO of US Operations Andrew Marcell says the market is “increasingly turning to strategic M&A opportunities to achieve scale, global reach and a more diversified product suite in order to realise growth objectives”.

Like last year, the leading threat to the industry is considered to be undisciplined or unprofitable underwriting (35%).

Catastrophe/non-catastrophe losses have dropped from 22% last year to 18%, reflecting relatively low catastrophe losses. Global economic uncertainty has also fallen, from 19% to 12%, as signs of improvement continue.

The industry is instead giving greater prominence to internal threats, with 15% of respondents identifying operational inefficiencies as the leading danger, compared with 6% last year.

The survey also reveals top spending priorities.

If given a blank cheque to invest in their company, 39% of respondents say they would improve IT, up from 35% last year.

Retention of talent also features strongly (37%), followed by new products (7%).

Aggregating and analysing large amounts of data is one of the most significant opportunities in a generation, Mr Marcell says.

“Harnessing this information in real-time can be a decisive competitive advantage, enabling carriers to anticipate consumer needs, respond to sudden challenges, accelerate market entry and optimise profitability over time.

“We continue to invest in technology-enabled analytical solutions to help our clients realise this potential.”

In a separate report, Guy Carpenter identifies the Asia-Pacific catastrophe market as a major opportunity for the reinsurance industry.

This year’s Asia-Pacific Catastrophe Report says the total limit purchased increased for the 10th year in a row but still failed to keep pace with the region’s “stellar” GDP growth.

“Guy Carpenter predicts that the conditions are ripe for a broader reinsurance community to respond positively to this growth opportunity with innovative and customised solutions.”