Bart Hedges, the CEO of Greenlight Capital Reinsurance, has lived in the Cayman Islands since the hedge fund-affiliated reinsurance company brought him on board in 2006, so he has learned to live with the strong risk of hurricanes. His family keeps a kitchen cupboard filled with hurricane supplies: flashlights, battery-operated radios, blankets, candles, even candy and liquor for diversion. For six months of the year they check a hurricane disaster website every morning.
But when the late-season Hurricane Sandy sideswept his Caribbean island and instead headed for the northeastern United States, Hedges wasn’t so much relieved as vindicated. He knew his firm, the reinsurance arm of David Einhorn’s Greenlight Capital, had been wise in choosing not to underwrite homeowner or catastrophe insurance policies in the region, although they have not yet determined whether they have some exposure to claims related to the vast damage that Sandy wrought.
“It’s early but...