Reinsurance pricing is expected to continue to slip by up to 10 percent for the January renewals, but the industry is still stable and profitable according to executives at Les Rendez-Vous in Monte Carlo.

Executives put a brave face on falling prices, with the chief executive of Hannover Re even going so far as to claim the market was not softening.

While prices have been slipping by between five and 10 percent during the year, reinsurers are determined to maintain discipline despite record profits during 2006 and pressure from clients to drop prices.

Forecasters continue to predict an above-average hurricane season and reinsures say it would be short sighted to drop prices. This, added to storms already seen this year, will stop the slippage.

But fierce competition between reinsurers could push prices down according to Swiss Re, the world's largest reinsurer. Rival Munich Re, the world's second largest reinsurer, said that two years without a hurricane with significant landfall was edging pricing down.

Hannover Re's chief executive officer Wilhelm Zeller said he expects catastrophe rates to remain stable at renewals on January 1, following higher weather-related claims this year.

"In light of this year's major loss events, including winter storm Kyrill and floods in the UK, we expect rates for natural catastrophe covers to remain stable in the upcoming renewals," Zeller told a press conference yesterday.

Zeller said: "There is no general softening in the market. A real soft market only starts where terms and conditions start to deteriorate. Hannover Re will strictly focus on profitability instead of growth, especially in softening markets." He said that in the States property-catastrophe rates may decline by as much as ten percent for hurricane and earthquake cover.

In an effort to keep prices up, reinsurance executives say they aren't going to sell cheap policies and will walk away from business where they don't see a good profit margin.

"There is no line of business that is not under pressure," says Rolf Tolle, who monitors the business plans and risks of underwriters at Lloyd's as the London insurance market's franchise-performance director.

"The big question for the conference and the whole industry is: Will reinsurers walk the talk," Grahame Chilton, chief executive of the world's third largest reinsurance broker Benfield, said despite some major hurricanes such as Felix, this has been a benign season.

"In 2007, catastrophe reinsurance fell by around five percent and insurance was off by more than 20 percent," he said. "Without a major loss, we are expecting a reduction of between five percent to 10 percent for reinsurance and for insurance, much more."

Two hurricanes have formed in the Atlantic this year. Dean, a Category 5 storm, struck Mexico's Yucatan peninsula August 21 after going across the Caribbean. Felix pounded the coast of Nicaragua last week with winds of 160 miles per hour.

It was the first time that two Category 5 storms made landfall in a single season.

Total insured losses will be less than $1.7 billion, according to estimates from Risk Management Solutions in Newark, California.

That's a fraction of the almost $41 billion of damages caused by Hurricane Katrina.