Hedge fund reinsurer news

Another high-profile name from the insurance and reinsurance industry has joined Hamilton Insurance Group, the holding company for recently established Bermudian reinsurer Hamilton Re, which was formed after it acquired hedge fund backed SAC Re.

Swan Re Ltd. has launched in Bermuda as the latest reinsurance firm backed by an asset manager following a hedge fund reinsurer strategy of using its capital to underwrite while generating additional profits investing the premium or float within its investment strategies.

Hamilton Insurance Group, the holding company for the newly established Bermudian reinsurer Hamilton Re, which was formed after it acquired hedge fund backed SAC Re, has named ex-Citigroup chief Sanford I. “Sandy” Weill as Chairman of its Board.

The acquisition of SAC Re, the hedge fund style reinsurer which was launched by hedge fund manager Steven A. Cohen and his firm SAC Capital, has completed in time for the January renewals with a group of investors led by industry veteran Brian Duperreault no taking control.

Ratings agency A.M. Best said that it will keep the financial strength and issuer credit ratings of hedge fund backed reinsurer SAC Re under review with negative implications until the deal announced on Monday closes and the reinsurer becomes Hamilton Re.

SAC Re, the hedge fund style reinsurer which was launched by hedge fund manager Steven A. Cohen and his firm SAC Capital, is to be sold to a group of investors led by industry veteran Brian Duperreault and the reinsurer will be renamed Hamilton Re.

According to global assurance, tax, advisory and transactions firm EY (Ernst & Young) more asset managers are likely to launch their own reinsurance firms as they seek to emulate the successful hedge fund reinsurer strategy to leverage reinsurance premiums as a source of capital.

Bart Hedges, CEO of Greenlight Capital Re, the Cayman Islands reinsurance firm backed by hedge fund manager David Einhorn, said that there is room for catastrophe reinsurance pricing to drop further, as the floor on natural catastrophe pricing has not yet been reached.

Greenlight Re, the Cayman Islands domiciled reinsurer, backed by fund manager David Einhorn and his Greenlight Capital, Inc. hedge fund which acts as an investment manager for Greenlight Re, faces increasing competition from new reinsurance companies with similar investment strategies.

Two Sigma Investments, a technology and data driven hedge fund and investments firm, is reported to be the front running candidate to buy hedge fund manager Steven A. Cohen’s firm SAC Capital’s stake in its year old reinsurer SAC Re.