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MONTE CARLO, Monaco -- Financial crises in emerging markets in the Far East and Russia will likely dampen the expansion efforts of international reinsurers in the those countries, reinsurance executives predict.

Downturns in economic activity will reduce the demand for insurance coverage, and the need to retain foreign currency will likely reduce the demand for reinsurance.

However, there could be a silver lining for reinsurers in the economic problems, some executives say. As insurers in the economically troubled countries see their assets and capital shrink, they may seek to purchase more reinsurance protection.

"Ceding companies will be a lot less wealthy, and they will not be able to retain as much risk," said Jacques Blondeau, chairman and chief executive officer of SCOR S.A. in Paris.

Reinsurers wanting to expand in the Asian region will be able to offer increased capacity to those cedents, he said.

There may be some degree of increased demand for reinsurance in the Asia, agreed Herve Cachin, chairman and general manager of Societe Anonyme Francaise de Reassurance, a Paris-based unit of Partner Re Ltd.

However, increases in demand for capacity at some insurers may be outweighed by a reduction in demand for reinsurance as an increasing number of insurers in the Asian region become insolvent due to economic turmoil, he said.

"A lot of insurance companies will disappear," Mr. Cachin said.

"We will see a lot of consolidation in Asia," agreed Dirk Lohmann, CEO of Zurich Insurance Co.'s reinsurance division in Zurich, Switzerland. "Many Asian companies, excluding Japan, were little more than glorified agencies. There was little retention of risk and impaired capital," he said.

Even so, Mr. Lohmann added, Asian markets still offer opportunity to reinsurers, as long as efforts are focused, rather than overly broad.

A lot of the construction and engineering projects that were previously covered by insurers and then reinsured have been halted, said Benito Pagnanelli, deputy general manager at Assicurazioni Generali S.p.A. of Trieste, Italy.

"This obviously has an effect on premiums," he said.

The turmoil will likely lead to a reduction in demand for reinsurance from international reinsurers, said Herbert Haag, president and chief executive officer of Partner Re Ltd. in Bermuda.

"There will be more retention within the local markets because they will not want to spend their foreign currency," he said.

Although the individual insurers may need more reinsurance protection that will likely be provided by local reinsurers and pooling facilities, Mr. Haag said.

Political and economic turmoil in Russia could have an even larger effect on reinsurers' growth plans, said Mr. Pagnanelli of Generali.

"If the Cold War started again, it would have an immediate effect on our economies," he said.

Although Western insurers and reinsurers only derive a small amount of premium from Russia, Western economies have significant links with Russia, so political disruption could end those links and expansion in the country, Mr. Pagnanelli said.