Citadel To Close Bermuda Reinsurer

Nov 11 2008 | 4:40am ET

Citadel Investment Group is closing one of its two reinsurers, after it proved less profitable than the Chicago hedge fund giant had hoped.

Citadel founded CIG Reinsurance in 2004. The firm is pulling the plug because the Bermuda-based property-catastropher reinsurer has had difficulty competing with rivals due to its lack of a financial strength rating, and because its cost of capital is too high, Reuters reports.

Another Citadel reinsurance venture, New Castle Reinsurance, founded a year after CIG Re, will remain open.

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