There’s been a recent influx of banks, hedge funds and private equity firms injecting capital into the reinsurance market — adding a reported $6 billion and $8 billion of new capacity since 2011 and slowing the return of a hard reinsurance market. And, the Bermuda reinsurance market just got another $500 million of capital this week that could temper rates.Billionaire Steve Cohen’s SAC Capital Advisors LP has launched SAC Re, a new Bermuda-based reinsurance company. Its assets will be managed by the hedge fund firm, joining a list of some big-name funds that have recently entered the insurance industry.SAC Capital, which recently reported about $13 billion in assets under management, has looked at setting up an insurer for some time. The Royal Gazette first reported in December 2011 that the company was planning to launch SAC Re and that former Lancashire Holdings boss, Simon Burton, would head up the new reinsurer. At that time, SAC Capital Advisors had purchased a 5.2 percent stake in Bermuda-based Validus.The new company, SAC Re Ltd., officially began operations on Monday after raising $500 million in capital from Mr Cohen, who is SAC Capital’s founder and CEO, private-equity firm Capital Z Partners and other investors, including wealthy individuals. Cap Z is a major investor in the Bermuda reinsurance market, having been a founding investor in Endurance Specialty Holdings Ltd. and Lancashire Holdings Limited.As a class 4 Bermudian reinsurer, SAC Re plans to underwrite high margin property catastrophe and low severity casualty reinsurance business — its customers being other insurance companies that want to offset some of their risks.CEO Simon Burton, will lead the senior management team, which includes chief financial officer, Jonathan Reiss, chief underwriting officer casualty, Claude Lefebvre, general counsel, Victoria Guest, and head of risk and analytics, Peter Skerlj.Subject to Bermuda Department of Immigration approval, Kathleen Reardon will be joining the team later this year as chief underwriting officer property, Kenneth J. LeStrange will serve as chairman of the board of directors for SAC Re Holdings.“We are delighted to commence operations in Bermuda with a unique business plan that leverages the combined strength of our reinsurance executive team and SAC Capital’s asset management capabilities,” said SAC Re CEO, Simon Burton.The property/casualty insurance sector has long been a draw for hedge funds and their investors in part because returns from insurance aren't correlated with financial-market returns. They’ve entered into the market through both traditional start-ups and non-traditional instruments like catastrophe bonds, insurance-linked securities, sidecars and collateralised reinsurance vehicles.Mr Cohen is just the latest hedge fund manager to break into the reinsurance market. Over the last year, other well-known hedge fund managers, including Daniel Loeb of Third Point LLC and John Paulson of Paulson & Co., have backed Bermuda-based start-up reinsurers Third Point Re and PaCRe Ltd. They follow in the footsteps of David Einhorn of Greenlight Capital who launched Greenlight Re in the Cayman Island and Warren Buffett’s Berkshire Hathaway Inc. whose insurance businesses have amassed roughly $70 billion in long-term funds that Mr Buffett invests for the benefit of Berkshire investors.Reinsurers have formed in the past to take advantage of rising rates after losses from natural disasters. In the wake of Hurricanes Katrina, Rita and Wilma, a deluge of new companies set up in Bermuda. The so-called Class of 2005 reinsurers includes companies like Amlin, Ariel, Flagstone, Hiscox and Validus.Record catastrophe losses last year from the two earthquakes in New Zealand, the earthquake and tsunami in Japan and the flooding in Thailand have helped boost reinsurance rates. According to a Guy Carpenter & Co. statement released this week, property reinsurance prices in the US have risen 6.5 percent since 2011.