Bermuda is well represented this week in Monte Carlo where the reinsurance industry is holding its annual get-together with record catastrophe losses, a turbulent hurricane season and the prospect of rising rates likely to be hot topics.Earthquakes in Japan and New Zealand, as well as tornadoes and flooding in the US have seen the industry shoulder claims of between $55 billion and $60 billion, according to reinsurance brokers.Robin Spencer-Arscott, of AAA Solutions, told The Royal Gazette from Monte Carlo on Friday that he expected the conversation between reinsurance executives and brokers to focus on the prospect of an end to the soft market, which has seen reinsurance rates fall in four of the past five years, according to broker Guy Carpenter & Co.“A lot of the talk will be about rate increases and more losses from the hurricanes like Irene and Lee and whatever happens with Maria,” he said.“If you read the reports, some of them have said that rates have risen in the areas where there have been earthquakes, but not generally. But now people are saying rates are rising generally.”The latest update released on Friday by analsyts at investment bank KBW, found that catastrophe reinsurance rates were up nearly 10 percent on for July 1 renewals, “with similar levels expected for January 1, even without a hurricane”, while pricing in other lines had flattened.“Nonetheless, managements of both underwriters and brokers were surprisingly downbeat” the KBW report continued. “Few believed that the third step in the ‘soft-to-flat-to-hard’ trend was likely to occur soon.“The market was characterised as ‘muddling along the bottom’, ‘slowly, slowly turning’, ‘doesn’t feel hard’ and ‘may be teetering’.”According to Martin Sullivan, the deputy chairman of broker Willis, economic losses from catastrophic events this year are around $260 billion, of which insured losses were $55 billion.Mr Sullivan, speaking at a pre-Rendezvous briefing in London, estimated that insured losses from Hurricane Irene could add $4 billion to $7 billion to that total.Despite the depletion of capital, the industry is still well prepared to deal with claims from the hurricane season. But historically low interest rates mean that property and casualty reinsurers are struggling to generate a return from their traditionally conservative investment portfolios, so they are heavily reliant on their underwriting activities for profit.According to Mr Sullivan, who is the former chief executive officer of American International Group, the industry faces another grave threat.“Inflation could well be the monster under the bed,” Mr Sullivan said. “Inflation could be more deadly to an insurer’s economic health than defaults, earthquakes, winter storms or tsunamis.”Rating agency Standard & Poor’s, in another pre-conference briefing, suggested that increases in the frequency and severity of natural disasters, in addition to the fact reinsurers are trading below book value, will make investors unwilling to inject capital into struggling reinsurers in the event of another loss-making event.Reinsurers’ valuations are currently trading below historical norms, while publicly traded reinsurers’ have price-to-book ratios below the average, said S&P.“The discounted stocks raise questions about the level of investor interest in reinsurers. In our view, they suggest that investors may be reluctant to reinvest in reinsurers should the need arise,” said S&P in an accompanying report.Reinsurers have been finding other ways to raise funds, particularly in the form of sidecars, S&P added.Mr Spencer Arscott, along with Suzie Pewter, organises the Bermuda reception in Monte Carlo that is expected to attract between 450 and 550 people on Wednesday between 12pm and 3pm.Amid the networking and gossiping, Mr Spencer-Arscott can expect to field a few questions about Bermuda-based Omega Insurance Holdings Ltd, a company of which he is a director and which is the subject of takeover interest, in particular from London insurer Canopius and Mark Byrne, the former executive chairman and co-founder of Flagstone Re.He declined to comment on the matter.