The long-predicted string of reinsurer mergers and acquisitions will do nothing to slow falling premium rates, according to Standard & Poor’s (S&P).

The ratings agency maintains its negative outlook on the sector, with capital expected to remain at record levels and pricing predicted to drop this year by 5-10% across most lines.

“S&P believes competitive pressures will remain heightened in reinsurance, and we don’t expect the recent spate of consolidation will alleviate that burden.

“In fact, we believe this trend towards greater scale highlights how hard it will be for management teams to defend their market positions.”

S&P expects an “arms race” for the remaining small and mid-size reinsurers to find consolidation partners.

“When the dust settles from the consolidation land grab, fewer traditional players will be fighting for a seat at the table.

“Nevertheless, competition will remain fierce as the new entrants in the top 10 look to grow into their enlarged capital bases, third-party capital continues to expand and the members of the old guard keep trying to defend their long-standing positions.”