Reinsurance executives gathered in Monte Carlo this week believe there are good reasons why property and catastrophe rates should rise but there is less confidence that there will be any broader market turn.Massive catastrophe losses, estimated as high as $70 billion, have diminished industry capital, applying some upward pressure on rates, although most companies insist they remain well capitalised.Additionally, a new version of the RMS catastrophe model has resulted in many companies estimating higher insured exposures.While reinsurers believe these factors mean rates should increase, brokers have reportedly been suggesting otherwise in Monte Carlo, where industry leaders are attending the Rendez-Vous event.Gary Prestia, chief executive officer of Flagstone Representatives (US) Inc and chairman of Mosaic NY, said: “Despite broker talk to the contrary, there should be rate level increase in reinsurance pricing.“This is based on the changes to the catastrophe models and the level of catastrophes we have seen around the world so far this year. This is also coupled with the rate decreases of last year’s January 1 renewals which varied from between five and 15 percent in some lines. These elements should provide positive pricing momentum for reinsurers.“We are seeing pricing generally flat to upwards and from what we see, we are looking at an average price increase in double digits for January.”Tatsuhiko Hoshina, CEO of Bermuda-based Tokio Millennium Re, was less optimistic in his philosophical comments on the market situation.“I think we will only see hardening on a regional basis and in those geographies directly affected by cat losses,” Mr Hoshina told the Intelligent Insurer newsletter.“RMS’s new model will also play its part, but where there have been neither cat losses, nor implications for RMS version 11 changes, the market will remain largely flat.“When you talk about hardening, it is always relative. What is more important is that rates are adequate. The issue is that in some territories, in spite of cat losses, rates remain inadequate.“With returns on equity down and investment returns muted, pricing will need to go up in such geographies in order to satisfy investor expectations.“The increasing frequency and severity of cat events would suggests that pricing needs to be revised upwards, but unfortunately it has proved not to be the case. Rather, reinsurers will likely have to accept that present soft conditions will continue for the foreseeable future.”William Pollett, chief corporate development and strategy officer at Bermuda-based Montpelier Reinsurance, said: “The property catastrophe market currently appears close to equilibrium from a supply and demand perspective, but there is a general recognition that rates need to adjust upwards to reflect the increase in the cost of capital, in addition to the recent string of catastrophe losses and changes in the RMS model in the US and in Europe.“At the June and July renewals rates were up ten percent on average and, absent a large event in the last few months of the year, we expect similar price increases at the January 1 renewals.“In longer-tail lines, we expect that at best rates will bump along at the bottom or continue to decline. We see no signs of a much-needed correction at this time.”Guy Swayne, executive vice-president of Flagstone Reassurance Suisse SA, had concerns about the new RMS models for Europe.“The timing of the release of the new RMS model for Europe does not assist the industry in finding appropriate terms for renewals,” Mr Swayne said.“Both brokers and clients have many unanswered questions in the run up to a key renewals season.“It is not to say the RMS model is wrong, but uncertainty about the effect it has will delay implementation.“We are also seeing increase in demand from buyers, particularly in catastrophe aggregates and multi-line products.”