Reinsurers that are seeking growth are casting their nets wider than in the past.

Demands for more competitive pricing and the fallout from the capital and stock markets is hurting reinsurers' profitability in many industrialized countries, sources say.

So large global companies are looking at less developed locations as a source of underwriting profits and future long-term growth—including China; Southeast Asia; India; and Dubai, United Arab Emirates.

"Reinsurers are just not having a good year," said Howard Mills, director and chief advisor-insurance industry group of Deloitte & Touche USA L.L.P. in New York. "There is an excess of capital chasing diminishing returns."

Two years of mild Atlantic hurricanes in 2006 and 2007 have spurred ceding insurers to ask for lower rates for risks subject to such exposures.

"Pricing is dropping off globally," except in markets that have been stressed by loss-causing events such as flooding in Australia or wildfires in the United States, he said.

Rating agency Standard & Poor's Corp. reported a "neutral" outlook for the reinsurance industry in June. "We view as a positive factor the relative modest valuations (on a price/earnings basis) of a number of reinsurers. Partly offsetting this is the ongoing competitive pricing environment, coupled with downward pressure that turmoil in the equity and fixed income markets may exert on this group."

"At the moment, everyone wants to go into the emerging markets," and many reinsurers are willing to sacrifice their bottom lines to establish operations there, said Ulrich Trumpp, Munich Re's chief executive for greater China and Southeast Asia.

China offers significant opportunities because consumer demand is growing, he said. It also provides significant challenges because of its "tremendous" need for natural catastrophe coverage, inadequate building code enforcement and general lack of data for analysis needed to understand exposures and determine appropriate pricing, Mr. Trumpp said.

Mr. Mills, however, recommended that reinsurers that look to China should remember that markets there are subject to greater regulatory control than in many industrialized nations and are very price-conscious, he said. Also, companies there "are not yet buyers of loss control," which can increase claims, he said.

Munich Re also is targeting the large Muslim populations of Indonesia, Malaysia and Thailand with Shariah-compliant life and nonlife products that reflect the beliefs of Islam, he said. The company also plans to offer microinsurance to individuals in emerging nations.

Other reinsurers are taking steps to expand their operations into these additional markets: