meeting here to discuss prices for next year know that once again the main topic of conversation will be how much the business landscape has changed since last year.

"The script for this meeting was already written as far as rates go,'' Lloyd's of London chairman Max Taylor told reporters.

"It's the big strategic issues people are talking about.'' "It's becoming a bit of a joke,'' said one insurance broker.

"For the last few years a stack of major mergers have been announced in the run-up to the meeting. People turn up to find who owns who, and then rush back early to make sure they have a job to go back to,'' he said.

Since June 1998, when Berkshire Hathaway pulled of the sector's biggest merger with its $22 billion acquisition of General Re, there have been four other major insurance acquisitions.

Concentration means the top five firms now control 43 percent of the reinsurance industry's premiums, and the top 25 control 77 percent.

In addition Willis Corroon and Sedgwick -- two of the big global insurance firms who help put together reinsurance deals -- have become the subject of takeovers.

Now many of the insurers, reinsurers and brokers attending the Monte Carlo rendezvous are wondering who will be next.

Moody's Investors Service warned that the decisions reinsurers make now will have long-lasting implications.

"As growth prospects have dimmed and competitive conditions intensified, reinsurers have become locked in a struggle with primary insurers, with brokers, and with new competitors over nearly every aspect of the risk management function, " Moody's said.

On hastily prepared slides explaining the effects of recent activity, reinsurers seek to convince brokers to bring them business, while brokers attempt to make better deals on behalf of their clients, the insurance companies.

"The pressure is especially tough on the smaller reinsurers,'' said one reinsurance executive.

"The big guys have got sophisticated tools, large underwriting limits, truly global capability and excellent product design. The smaller players are having to prove that their local or specialty knowledge is still worth something,'' he said.

Big or small, they have in common an environment where shareholders are becoming restive for higher returns, but where both prices and demand for reinsurance is falling.

"1998 will have reasonable profitability, but it won't be as good as last year, and the future outlook is even more negative,'' said rating agency Standard & Poor's (S&P) director Don Watson.

"We can expect rates to fall between five and ten percent, and that's going to put some pressure on the industry,'' said Watson.

"As premiums fall, the expense ratios of reinsurance companies will come under upward pressure as they seek new business,'' Watson said.

The reinsurance industry is far from the verge of collapse, but its practitioners are increasingly aware that the rules of this historic industry are being rewritten.

One senior Bermudian underwriter captured the sentiment.

"Everything is changing, relationships with customers, the way we design products, the view we take towards shareholders, and the way we distribute our services,'' he said.

"Those who don't change in time will have change forced upon them from above,'' he said.