Sanford “Sandy” Weill, the former head of Citigroup Inc., was named chairman of the board at Hamilton Insurance Group Ltd., which runs the reinsurer that hedge fund manager Steven A. Cohen exited.

“Sandy Weill is an icon in the financial services sector,” Hamilton Chief Executive Officer Brian Duperreault said yesterday in a statement. “I have no doubt that our goal of establishing a leading insurance and reinsurance business will be realized.”

Weill, 80, helped engineer the 1998 merger of insurer Travelers Group Inc. and Citicorp, ushering in the era of U.S. banking conglomerates.

Cohen, the billionaire founder of SAC Capital Advisors LP, sold the reinsurer last month after his hedge fund reached a $1.8 billion deal to end a criminal investigation into insider trading. Duperreault, the former CEO of insurance broker Marsh & McLennan Cos., is partnering with quantitative hedge fund firm Two Sigma Investments LLC at the Bermuda-based reinsurer.

“Brian’s teaming up with Two Sigma marries insurance expertise with an outstanding record of investment expertise, a combination that I believe will work well,” Weill said in the statement.

Weill stepped down in 2006 as chairman of New York-based Citigroup. He said in 2012 that large U.S. lenders should be broken up to protect taxpayers.

Travelers’ Fishman

“Sandy brings a tremendous amount of insurance experience,” Jay Fishman, the CEO of property insurer Travelers Cos. who worked with Weill at Citigroup, said in an e-mail. “With his industry and broad financial-services knowledge, he’ll provide great leadership to the Board. Given all the changes occurring in the reinsurance environment, it’ll be interesting to watch Hamilton’s strategy.”

Weill will be able to help Duperreault if Hamilton decides to buy other reinsurers, said Meyer Shields, an analyst at KBW. The industry is becoming more concentrated because companies prefer to do business with fewer reinsurers, Shields said.

“He’s seen as a very shrewd acquirer,” Shields said by phone. “What it means is that deals are in the offing.”

Hamilton had about $800 million in capitalization as of Dec. 31, according to the statement. The reinsurer formerly known as SAC Re Ltd. raised $500 million in a private placement from founding investors including Cohen and private-equity fund Capital Z Partners, according to a statement in 2012.

Reinsurers shoulder risks for primary insurers. Duperreault said last month that Hamilton will focus on catastrophe protection and will seek opportunities in other types of coverage.

Big Names

The industry has drawn some of Wall Street’s biggest names seeking access to capital for investing and tax advantages in locations like Bermuda or the Cayman Islands. Bermuda-based Third Point Reinsurance Ltd., with billionaire hedge-fund manager Daniel Loeb as a founding shareholder, raised more than $300 million in an initial public offering last year.

Weill will bring financial acumen and relationships to Hamilton, said Michael White, president of Michael White Associates LLC, a Radnor, Pennsylvania-based financial-services consulting firm.

“He is a builder, he is an acquirer, he makes things bigger,” White said. “He’s a big name in financial services and he knows a ton of people. He can get things done.”

Reinsurers may have to count more on investment returns after a decline in what the companies charge for protection. Rates for property-catastrophe reinsurance fell 11 percent on policies up for renewal on Jan. 1, according to a unit of Marsh & McLennan, the world’s largest insurance broker. Lower-than- average losses from natural disasters and an influx of cash from third-party investors contributed to the drop, according to the broker’s reinsurance unit.

“Our general outlook for 2014 remains pessimistic,” Amit Kumar, an analyst at Macquarie Group Ltd. wrote this week in a research note on reinsurers. “Third party capital still continues to enter the prop-cat space.”

–With assistance from Dakin Campbell and Noah Buhayar in New York. Editors: Dan Reichl, Dan Kraut