(Reuters) – Hedge fund heavyweight David Einhorn's reinsurance business, Greenlight Capital Re Ltd, on Tuesday warned that other insurers were making “irrational” deals in Florida in the face of heavy competition.
The Florida market is crucial for Bermuda- and Caymans-based reinsurers like Greenlight because of the heavy weather-related risks there. Reinsuring Florida homeowners' policies has been one of Greenlight's key categories in recent years.
But Greenlight's chief executive, Bart Hedges, said there was so much competition in Florida that some companies were writing deals he considered unsound.
“In some cases we witnessed what we consider irrational behavior,” Hedges said on a conference call with analysts. As an example, he cited reinsurers writing contracts without loss limits for sinkhole claims, traditionally a major problem in the state.
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