A slump in reinsurance prices is playing to the strengths of the biggest global reinsurers, while piling pressure on smaller competitors to diversify or consolidate.

Munich Re, the world's biggest reinsurer, hiked its dividend after a surprise rise in 2013 profit, lifting hopes it can cope with an influx of new competitors and falling prices

Europe's reinsurers will soon test the strength of competition from alternative investors like pension funds, whose activity may keep a lid on reinsurance price rises and add to challenges for a sector already facing crimped investment income.

Europe's reinsurers will soon test the strength of competition from alternative investors like pension funds, whose activity may keep a lid on reinsurance price rises and add to challenges for a sector already facing crimped investment income.

Damage claims faced by German insurers for hail storms this year are almost twice the amount expected at 2.7 billion euros, a trade group said on Tuesday of a figure which will eat into sector profitability.

Munich Re played down the threat to its reinsurance portfolio from insurance investors like pension funds, saying it expected a stable outcome when it renews contracts with its insurance company clients in the coming months.

Reinsurance executives gathering in Monte Carlo will be considering their response to increasingly popular alternative insurance-linked investments that are driving down prices in the industry.

Reinsurer Munich Re is likely to face damage claims of $333-466 million from flooding in central Europe, a bank analyst predicted on Friday, after Allianz pencilled in its own net hit at 350 million.