Insurance companies are more bullish about 2010 than this year, according to a poll of company executives, who say they anticipate that underwriting profits will be hard to come by in the next one to three years.

Obtaining capital, unemployment rates and increasing regulatory intervention were seen as key barriers to their economy recovery, according to the 271 insurance executives, polled by KPMG at its 21st annual Insurance Industry Conference, held in Brooklyn, N.Y.

“As expected, there are clear concerns surrounding access to capital and the proposed regulatory changes,” said Scott Marcello, partner and insurance industry leader at KPMG, in a statement.

Fueling any growth, the executives said, will be product innovation (17%), customer focus (15%) and redeploying capital (14%).

About half (48%) said they expect their companies to perform above general market expectations next year. Last year’s results showed just 22% expecting this year’s performance to be better than expected.

In this year’s poll, 36% of poll participants said they expected their company’s performance would be flat and another 16% forecast performance below expectations.

Exactly 64% of respondents predict only a moderate ability to increase underwriting profit between 2010 and 2012, while more than a quarter (27%) characterized the chance of increased profit as “weak.”

“The period of the past 18-24 months has been very challenging for many insurers in terms of financial performance,” Marcello said. “While our survey shows some optimism related to future performance, executives have clearly indicated that the industry still faces many risks and the uncertain economic and regulatory environment poses many obstacles to growth and recovery.”

Capital hard to find

Nearly a third (31%) of executives indicate they don’t anticipate their company will need to access additional capital over the next 18 months, with the scarcity and high cost of capital cited as the third largest barrier to overall economic recovery. In the event their company did decide to access additional capital over the next 18 months, 22% said the most likely source would be equity while 17% said it would be debt.

Despite the challenges to obtaining capital, 73% of executives say they expect an increase in mergers and acquisitions when compared to the last 12 months.

When asked to identify the most significant challenges they face in the next three to five years, 30% of respondents cited the risk associated with adequately pricing insurance products (referred to as pricing risk) to be the most significant challenge over the next three to five years, followed closely by credit risk, identified by 23% of the respondents.