Hedge fund-backed reinsurance (HFR) isn’t a brand new business model, but with only a couple of previous examples to point to (neither very promising) and the current crop having only been open for a couple of years it’s not completely obvious how to gauge their potential. “Does combining a reinsurer strategy with a hedge fund strategy create higher risk-adjusted returns than they could achieve separately?” asks Taoufik Gharib for Standard & Poor’s Ratings Services in an August 11 white paper. “This will depend on the extent of risk diversification between a reinsurance underwriting portfolio and a hedge fund asset portfolio…