Reuters – Several well-known hedge fund managers have backed new reinsurance vehicles, with the aim of using stable premium flows in lower-risk underwriting business to support higher returns on the companies’ asset portfolios. The business model sounds simple, but achieving these goals may prove to be challenging.
Making money on the asset portfolio has always been a fundamental part of the (re)insurance business model, although the protracted low-yielding environment has significantly reduced this source of earnings for most players, making it harder to offset technical losses.
