A Bermuda reinsurance executive has quit the Island to join the first major reinsurer to set up operations in the Cayman Islands.

Greenlight Reinsurance, Ltd., a licensed Cayman reinsurance company that was recently formed by hedge fund Greenlight Capital, said yesterday it had recruited Barton Hedges away from Platinum Underwriters Bermuda, Ltd., to become its president and chief underwriting officer.

Greenlight is one of a wave of new reinsurance start-ups forming to take advantage of an expected rise in insurance and reinsurance rates after large losses from the record 2005 hurricane season. All of the new start-ups, save Greenlight, are forming in Bermuda.

The flurry of insurance incorporations has put a high price on the heads of insurance and reinsurance executives, and numerous staff at established Bermuda companies have been lured away to join some of the new companies.

Indeed, a shortage of people to fill key operational positions has caused some concern from rating agencies that track the financial stability of insurance companies, including A.M. Best, which is currently rolling out new ratings for most of the Bermuda reinsurers now forming.

Mr. Hedges was previously Platinum?s president and chief operating officer. He is expected to relocate to the Cayman Islands by January, subject to work permit approvals, Greenlight said.

While the Cayman Islands is the second largest captive insurance domicile, after Bermuda, it has never developed a mainstream insurance and reinsurance market. Greenlight has said in previous reports it wanted to set up a Cayman-based reinsurer to sell policies openly across global markets, and picked the jurisdiction over Bermuda because it did not want to join an already busy market.

?I?m excited about the challenge to help build Greenlight Re and the opportunity to be at the forefront of establishing the Cayman Islands as a new and vital reinsurance market,? said Mr. Hedges, who joined Platinum during its formation more than two years ago.

Some critics have said Cayman will have a hard time establishing a market when so many customers and brokers are now accustomed to ?one-stop? reinsurance shopping in Bermuda.

While not having the stature Bermuda does as an insurance market, the Cayman Islands does incorporate more hedge funds than any other jurisdiction.

Hedge funds are currently one of the most active investors in reinsurance companies and products. The Caymans did attract a small reinsurer earlier this year, established by Bermuda reinsurer Montpelier Re and Bermuda hedge fund management company West End Capital.

The company, named Rockridge Re, was set up to offer retrocessional coverage solely to Montpelier Re, giving the reinsurer the capacity to write attractive high-layer, excess-of-loss contracts in peak catastrophe zones, such as Florida, California and Japan. West End is currently forming another larger reinsurer, Flagstone Reinsurance, in Bermuda.

A Platinimum spokesperson said yesterday that the company has yet to recruit a replacement for Mr. Hedges.