Once again anyone who’s anyone in the reinsurance industry is gathering in Monte Carlo for the Rendez-Vous de Septembre.

It’s the event’s 60th anniversary this week, but judging by the plethora of reports released in the run-up there isn’t much else to celebrate.

The trends have been the same for years now – falling rates, an influx of capital, a relatively benign catastrophe environment, low investment yields – and there still doesn’t seem to be an end in sight.

Fitch says falling premiums and investment returns will continue to drag down reinsurer profits next year, driving its negative outlook for the sector.

Thinning underwriting margins over the past four years have left reinsurers exposed to “even a modest uptick” in major losses.

“These tough market conditions could lead to rating pressure on smaller, less diversified firms that are reliant on business lines that have seen profit margins diminish,” the ratings agency warns.

Fellow ratings house Moody’s says the continuation of “long-term challenges” has led to a negative outlook on the sector for the next 12-18 months.

“Growth in alternative capital has exacerbated competitive pressure in an already overcapitalised sector, driving a large supply-demand imbalance and hurting pricing,” it says.

Price declines have slowed, but it’s too early to call the bottom of the cycle.

Moody’s expects pricing to remain negative throughout next year and into 2018.

“We believe the reinsurers best positioned to weather the current soft cycle will be the few firms that can achieve strategic alignment with their insurance counterparties, whether through scale, breadth of coverage or unique expertise.

“Reinsurers that are unable to differentiate themselves will increasingly have to compete on price.”

Consolidation is expected to continue over the next 12-18 months, Moody’s says, as the market favours larger, more diversified players.

Willis Re’s latest report concludes reinsurers are under continued pressure from pricing weakness, and Global CEO John Cavanagh believes conditions will remain challenging.

“As the latest Willis Re Reinsurance Market Report highlights, the industry’s return on equity continues to be flattered by strong support from prior-year reserve releases,” he says.

“Despite this, the balance sheet strength of the market remains robust; reinsurers with significant balance sheet scale and breadth, and those that have reserved prudently, will be best positioned to maintain profitability.”

Aon Benfield’s Reinsurance Market Outlook says the gap between reinsurance supply and demand has narrowed over the past year, and capital is at peak levels.

“The catalysts for this increased demand for property and casualty reinsurance include factors such as the emergence of poor underwriting results in certain casualty classes, outsized losses from regional exposures and the introduction of the Solvency II regulatory regime across the European Union,” CEO Eric Andersen says.

The report highlights cyber coverage as one emerging growth area.

“With about $US1.7 billion ($2.25 billion) in premium, nearly 90% of the market is based in the US, with annual growth running at 30-50%,” it says.

“International growth will be driven by upcoming European Union regulations covering data protection that will become effective in 2018.”

AM Best notes the Fort McMurray wildfire in Canada, the Kumamoto earthquake in Japan, Texas hailstorms and flooding in France have tempered the favourable catastrophe loss trend.

But “the reinsured portion of these losses is still well within annual reinsurers’ catastrophe budgets”.

The ratings agency believes increased specialisation and innovation will result as reinsurers try to turn challenge into opportunity.

“It appears that in the years ahead lines of business will become more dissected as companies apply more resources to gain an edge.”

It highlights Big Data as a major opportunity, suggesting reinsurers build teams of people to write code to harness it.

There is also a push for innovation in closing the protection gap.

“Reinsurers appear to be leading the initiative to penetrate uninsured and underinsured exposures such as flood, cyber and terror by working with government and taxpayer-backed pools,” AM Best says.

“It remains a huge frontier with great potential and may be the ultimate solution to the excess capacity problem.”

However, “this is an area where ideas are plentiful but progress is slow”.

AM Best believes a “paradigm shift” has taken place – the influx of capacity has triggered lasting structural change.

And while there will be winners and losers among players and investors, the “ultimate winner” should be the insured client, as the cost of cover is driven down.

“Through that lens, this all seems positive,” it says.

It should also be remembered that the reinsurance industry has been through major change before.

And as 60 years of rendezvous would indicate, it is more than capable of staying the course.