World reinsurance markets are at a crossroads, according to guests at Reinsurance Rendezvous 2007 in Monte Carlo, which finished at the weekend.

The annual event brought together the world's leading reinsurance players for a week of networking, discussions and dealings. More than 2500 specialists from 80 countries took part.

Observers say the reinsurance market is flush with cash right now, after a few relatively catastrophe-free years. That gives the main providers an important opportunity to invest in new technology and training.

Although that prudent strategy will bring nods of agreement, there are also concerns reinsurers will instead focus on discounting rates.

Standard & Poor's Director Peter Grant told journalists there is a chance pressure on rates will mean a continuation of extreme pricing cycles. But he is cautiously optimistic the industry will instead adopt a "new dawn" business plan of improved risk management and considered growth.

Fitch Ratings Insurance Group Director Mark Nicholson says the outlook for reinsurance markets is stable going into next year. However, investors should not expect the strong results of 2006 to be repeated.

Fitch has downgraded the ratings of 15 companies this year but the overall industry rating remains a very strong "A".