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Analysts have expressed doubt over hedge funds that are forcing their way into the reinsurance sector, questioning whether these funds would remain in the market ahead of the next big catastrophe, Reuters reported.
The questions come at a time when some alternative fund managers are forming their own reinsurance firms to invest the premiums in high-yield plans while awaiting the next big disaster. These new entities have said they have an advantage over traditional reinsurers, given their ability to invest in higher-risk assets, among other things.