of capacity coming in 1997 as international underwriters jockey for prime position in Asia's principal regional market hub.

But senior executives say that if there's one thing the Singapore market doesn't need, it's more capacity.

"We were already suffering from too much capacity,'' said Ben Ho, managing director of Scor Asia-Pacific, the regional unit of the French reinsurer.

Singapore's soft market, which reflects the global picture, strikes at a time when competition for market share is intense.

Bermuda-based catastrophe reinsurer Mid Ocean opened a branch office here in October and the US's Lincoln National said it had approval for a new life and health operation.

Meanwhile, CNA International, Yasuda Re and Kemper Re were joined by the UK Protection & Indemnity Club in announcing plans to open representative offices in Singapore.

The combination of overcapacity and battle for market share is expected to drive prices down and soften conditions further.

"To some extent, reinsurers are willing to go to extremes to get the business as they open up in Asia,'' said the regional director of one international broking group who declined to be identified.

"It is not too difficult to place business that two years ago wouldn't have been possible,'' he told Reuters.

"Reinsurers are prepared to go along with lower rates to improve their positioning as they think there is profit in the long run,'' said Bengt Johnsen, managing director of Aon Reinsurance Brokers, a Singapore unit of US giant Aon Corp.

"I've never seen such a soft market in Asia in the six years I've been here.

There is overcapacity in most classes,'' he said.

But while there is overcapacity, there is also a degree of innovation in the Singapore-based Asian reinsurance market.

With some 40 reinsurers now underwriting from the island republic and more queuing to be admitted to the game next year, the pressure to differentiate is on, said Johnsen.

Financial reinsurance, integrated risk management and alternative risk transfer are attracting some interest, if not buyers, although he expects this to change as the market becomes more sophisticated.

But the task of introducing new concepts will not be easy.