Hedge fund reinsurer news

A new reinsurance company is set to launch in Guernsey, named Kelvin Re Limited (Guernsey), underwriting short-tail property and specialty lines while investing 50% of its assets with hedge funds, backed by ILS investment manager Credit Suisse Asset Management.

Bermuda-based hedge fund strategy reinsurer Third Point Re has reported mixed results, with growing income from its ILS & catastrophe fund, continued combined ratio improvement in its reinsurance business, offset by a reduction in investment return.

Bermuda headquartered, global reinsurance company Everest Re may consider looking at adding additional alternative and third-party capital units, such as hedge fund backed strategies, as these structures evolve and become suitable, according to its CEO.

The latest quarterly results from Bermuda-based insurance and reinsurance group Arch Capital show that its new venture Watford Re, the sidecar-style, third-party financed, hedge fund style reinsurer, has improved its performance in the last quarter.

Global multi-line property casualty insurance and reinsurance firm ACE Limited wants to be at the forefront, taking a leadership role, as the use of capital evolves in the changing reinsurance marketplace, Chairman and CEO Evan Greenberg said yesterday.

Bermuda headquartered reinsurance group Platinum Underwriters Holdings is ready to embrace a higher risk, higher return, hedge fund style investment strategy this year according to the firms CEO, as had been suggested earlier this year.

Bermuda domiciled hedge fund style reinsurance and hybrid investment platform Till Capital Ltd., has now signed a definitive agreement to acquire Toronto-based insurance provider Omega Insurance Holdings, Inc.

One of the criticisms of the hedge fund or asset manager backed reinsurance business model is that some firms horde their capital, rather than deploying it to underwrite risk, but in Hamilton Re’s case that’s not true, said CEO Kathleen Reardon.

Start-up hedge fund backed reinsurance companies are very unlikely to get an ‘A’ rating due to the constraints applied to new companies and the additional unique asset-side risk and potential for pricing risk, said Fitch Ratings.

Bloomberg has reported that once again the U.S. Treasury department is actively considering targeting the hedge fund backed reinsurance sector, as it seeks to close what it considers a “tax loophole”.