Experts are predicting more mergers and acquisitions this year as current reinsurance market conditions — soft prices and reduced demand — have hampered reinsurers' attempts to increase their revenue.

"What you are seeing in the marketplace now is there's not a lot of room for organic growth, so the growth has got to come through mergers and acquisitions," Jim Buysse, CEO of US reinsurance broker Buysse and Associates, said.

David Simmons, leader of Deloitte's M&A services, said three factors could drive M&A activity in Bermuda — risk management for insurers looking to diversify their books; growth; and portfolio management.

Then there is what he termed the "billion-dollar issue". A few years ago, a reinsurer in Bermuda with $1 billion in equity was viewed as being large enough to be a player. Today, companies need $3 billion to $3.5 billion in equity to have that status, Simmons said.

"Let's just say it's driving a lot of interesting possibilities," Simmons said. "There are a lot of discussions taking place behind the scenes right now."

While more merger and acquisitions are likely to follow this year, "I doubt there will be any fire sales," Bob Kennedy, of US reinsurance broker ReSource Intermediaries, said.

"There are probably some good deals out there for people who are accustomed with the risk associated with the insurance and reinsurance business, those who are more patient with return and underwriting cycles. The only thing that keeps M&A from being faster and more furious is there just aren't that many reinsurers out there."