LONDON (Reuters) – Reinsurance hedge fund Tangency Capital has raised $200 million from investors, bringing its total assets under management to “north of $600 million,” one of its co-founders told Reuters, as the market anticipates sharp rises in premium rates.

Tangency Capital launched in 2018 and invests in the property reinsurance market.

Reinsurers, who reinsure insurers, have suffered losses in recent years as a result of large natural catastrophes such as Hurricane Ian, which hit in September and may lead to claims of up to $60 billion.

But the losses, and reinsurers’ reluctance to increase their exposure, will likely drive a sharp rise in reinsurance rates, benefiting reinsurance investors, Tangency co-founder Dominik Hagedorn told Reuters.

“Hurricane Ian affected the entire industry,” Hagedorn said, adding that reinsurers were estimating global property reinsurance rate rises of 15%-40% next year.

“The industry has not delivered on risk-adjusted return targets. We finally have a much better chance of doing that.”

Many property reinsurance contracts renew on Jan 1. Hagedorn said rate increases could be similar to 2006, in the aftermath of U.S. hurricanes Katrina, Rita and Wilma.

Rates rose 36.6% in 2006, the Guy Carpenter U.S. Property Catastrophe Rate-on-Line index showed.

Reinsurance rates in Florida, which was hard-hit by Hurricane Ian, could double, Hagedorn added.

Tangency’s other co-founders are Michael Jedraszak and Kai Morgenstern.

(Reporting by Carolyn Cohn; editing by Barbara Lewis)