NEW YORK (The Wall Street Jounral) ? Coastal homeowners will feel a lot safer if the next few weeks pass without a hurricane. A few bold investors could feel a lot richer.

A handful of reinsurance companies and hedge funds made substantial bets on the weather this year, collecting large premiums in exchange for covering potential disasters along the shore. With each calm day that passes, they are getting closer to securing hundreds of millions of dollars in gains.

Many insurers pared back their exposure after Hurricanes Katrina, Rita and Wilma last year, but this group waded into the market for reinsurance ? insurance that insurers buy for themselves to help pay large claims, thereby spreading some of the risk of their policies to others.

Among the big potential winners are two divisions of billionaire investor Warren Buffett?s Berkshire Hathaway Inc., which used its deep pockets to sell coverage others couldn?t or wouldn?t issue because of fears that last summer?s monster hurricanes were a taste of things to come.

Another company, Bermuda-based RenaissanceRe Holdings Ltd., even expanded in parts of the Gulf Coast that suffered dramatic losses last year.

?We often choose to grow in areas that have been hit hardest by recent losses, as that is where the pricing and terms are most attractive,? chief executive Neill Currie told analysts in August.

Investors, for now, are happy: As of 5 p.m. composite trading on Monday on the New York Stock Exchange, that company?s stock was at $55, up 50 percent or so from late October, 2005.

In the past year or so, several hedge funds and other investment managers have poured about $4 billion into a new generation of reinsurance-type vehicles known as sidecars. Among the investors were Highfields Capital Management LP, which oversees $8 billion, and Farallon Capital Management LLC, one of the nation?s biggest hedge-fund firms. Another firm, Third Avenue Management LLC, invested in a sidecar for a $2.3 billion mutual fund it runs, Third Avenue International Value. Farallon declined to comment; Highlands and Third Avenue each didn?t return a call.

There are now at least a dozen of these sidecars. These investment vehicles provide capital to back chunks of risk for a year or two ? an array of policies for wind damage in Florida, for instance.

Investors typically leave the underwriting ? how much to charge, policy details and the like ? to reinsurance company partners. The investors and their reinsurance partners typically share in the premiums and the losses.

Rob Bredahl, New York-based president of reinsurance brokerage firm Benfield Inc., predicts returns of 20 percent to 30 percent or more for some sidecar investors if there are no major catastrophe losses.

That could make bets on a light hurricane season one of the year?s best wagers in the financial markets.

?If we have a mild (catastrophe) season, they?re going to earn well in excess of what they?ve been able to get in the stock market,? says Sarah Hibler, a senior analyst at Moody?s Investors Service Inc.

By comparison, the Dow Jones Industrial Average is up nearly nine percent this year.

Of course, no one exposed to hurricane risk can be sure of profits just yet. Some of the sidecar deals last for more than a year, so some won?t know until late 2007. And there are still two months to go in the current hurricane season.

Wilma, one of the insurance industry?s three costliest US hurricanes ever, struck late last October.

?We?re not counting our chickens,? RenaissanceRe president William Riker said in an interview.

But September, historically the most dangerous month, passed without a hurricane striking the US coast. Only 16 hurricanes of Category 3 or above have hit in October since 1851, government data show. Many forecasters had predicted more hurricanes than usual this year.

So far, though, the season has been about average, the National Weather Service said. (Some scientists blame global warming for increased storm severity in recent years, a different measure than frequency.)

Barring big disaster losses, returns ?for the catastrophe-focused risk takers will be enormous,? says Benfield?s Mr. Bredahl.

That?s largely because catastrophe reinsurance premiums have climbed sharply in the wake of last year?s storms, with rates up 76 percent this year in the US, says Guy Carpenter & Co., a reinsurance brokerage unit of Marsh & McLennan Cos.

Berkshire Hathaway Reinsurance Group and General Re ? two Berkshire divisions that sell reinsurance for potential hurricane damage ? booked underwriting losses of $2.02 billion in last year?s third quarter, when Katrina and Rita hit.

With no major storm losses this summer, the divisions will report underwriting gains of about $400 million in the third quarter of this year, predicts Glenn Tongue, partner at hedge-fund T2Partners LLC, which owns Berkshire stock.

?It?s just going to be mind-blowing how well they do,? Mr. Tongue says. Mr. Buffett declined to comment.

RenaissanceRe took in $886.5 million for policies covering US hurricane losses last year, or just under half of its total gross premiums, according to its data. For all of 2005, the company had a net loss of $246.8 million, according to researcher Capital IQ.

This year, it has said it expects catastrophe premiums to grow by over 40 percent. The company?s overall risk, meanwhile, is ?basically flat? compared with last year, RenaissanceRe?s Mr. Riker told analysts earlier this year, calling its return relative to risk ?the best that it?s ever been.?

Alain Karaoglan, an analyst at Deutsche Bank Securities Inc., estimates RenaissanceRe will post after-tax operating income of $612 million this year.

(RenaissanceRe is an investment banking client of Deutsche Bank Securities, and a Deutsche Bank official sits on its board; Mr. Karaoglan doesn?t own shares.)

This year?s potential profits follow the departure last year of RenaissanceRe?s former chief executive, who stepped down amid investigations of its restatement of earnings from 2001 to 2003. RenaissanceRe says that it has proposed a $15 million settlement to the Securities and Exchange Commission.