This new supply of reinsurance was putting continuous but moderate pressure on the price of traditional reinsurance, particularly in catastrophe markets, Jeworrek said.

“We have a concern. We take a very serious approach here, particularly when the new capacity undermines current price levels,” Jeworrek said, adding that the company was actively managing its book to keep it profitable.

However, the natural catastrophe segment makes up only 1.5 billion euros in premiums or less than 10 percent of Munich Re's 17 billion euro property and casualty book, Jeworrek said.

“The general impact is manageable and one should not exaggerate,” he said.

Institutional investors hungry for yield have been increasingly attracted to insurance “catastrophe bonds” because they pay high returns compared with other bonds available in the market.

The downside of the bonds for investors is that they risk losing some or all of their capital to pay damage claims in the event of a big storm or earthquake.

Jeworrek said it was unclear how long traditional reinsurers, who help insurance companies shoulder the risk of big damage claims in exchange for part of the premium, would have to face the competitive threat from pension funds.

Institutional investor interest in catastrophe bonds might diminish if general interest rates start to rise, and the “cat bond” investors have yet to face big losses, which might one day dampen their enthusiasm, Jeworrek said.

Big reinsurers like Munich, Swiss Re or Hannover Re can also diversify their risk through other lines of business, rather than concentrate on catastrophe risk.

Jeworrek said there was no clear trend for the market when reinsurers renew annual contracts with insurance companies for risk cover starting on Jan. 1, 2014.

“All in all, we expect still very fragmented and heterogeneous markets and profitability levels,” he said.

The effect of third-party investors on reinsurers' prospects is a major theme of the industry gathering.

Broker Willis Re said the new money may “crowd out” traditional reinsurers.

“The influx of third-party capital into the reinsurance market may displace up to $40 billion of traditional equity capital, which could either be returned to shareholders or redeployed elsewhere in the reinsurance market,” Willis Re said in a statement on Sunday.

Munich Re has already said it is contemplating buying back its own shares.