NEW YORK (Reuters) - Insurance chiefs see tough times for the industry over the next few years, plagued by softening market conditions eroding profitability, and the difficulty of adapting technology to a constantly changing risk landscape.

Softening policy rates will be the biggest near-term headache for insurers, a panel of insurance executives said at a Standard & Poor's conference in New York on Monday, and could lead to the sector as a whole, pricing policies at rates that will be undercut by eventual claims.

"We have seen price competition far more severe," William Berkley, chairman of US insurer W.R. Berkley Corp. said, adding that his company had seen average pricing fall about seven percent this year over last year.

Berkley sees the industry, as a whole, breaking even in 2008, but said it could sink into an unprofitable period in 2009, with signs that the cost of claims could outstrip what corporations pay for insurance coverage in the first place.

Insurance rates have been softening over the past three years as benign catastrophe activity and tort reforms have helped lower claims for both property and casualty lines.

Henry Keeling, chief operating officer at XL Capital, a Bermuda insurance and reinsurance company, said XL had also seen a decline of about seven percent on business from clients renewing policies.

He added that pricing was a more pronounced issue for property-catastrophe lines than casualty lines, or coverage for legal liability for losses stemming from injury or damage to property of others.

"We have not seen wholesale deterioration in terms and conditions (for casualty)," Mr. Keeling said.

Mr. Keeling said the problem with gathering data was even worse in emerging markets, where information is harder to come by. "You have to have better margins to account for that added risk," said Mr. Keeling, of emerging markets business.

Insurers use sophisticated modelling systems to map out various risk scenarios, and the chance of losses, for any single policy. But the models have to be constantly updated to reflect changes in various risks, including harsher weather patterns predicted in the coming decades.