Barron’s Likes Two Reinsurance Companies

September 9, 2019 James Heinsman Hedge Fund News

According to financial journal Barron’s, two reinsurance companies, which are backed by major hedge funds, are good bets for investors. The recommendation is based on the fact that the companies’ share prices have not yet benefited from the reinsurance sector’s better pricing outlook.

Barron’s stated that the two firms “trade well below book value and look appealing.”

Greenlight Capital Re is linked to David Einhorn’s Greenlight Capital hedge fund, and Third Point Reinsurance is linked to Dan Loeb’s Third Point alternative investment company.

The reinsurance sector has had a difficult past few years because of falling prices caused by lots of money flowing into the sector along with an uptick in insurance payouts as a result of natural disasters.

But Barron’s added that there has been improved rates and terms for reinsurers along with better returns from investments, helping these companies.

However, the journal added a note of caution to its analysis, saying that more natural disasters could nullify the recommendation, especially Third Point Re which enlarged its catastrophe reinsurance business this year, especially with additional exposure to Florida. Luckily, for now, Hurricane Dorian, said to be the second most severe Atlantic storm in history, did not overly effect Florida.

Dan Loeb, Greenlight Capital Re, Third Point Reinsurance,

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