Between $10bn and $15bn of cash will be pumped into the reinsurance and retrocession market in the wake of Hurricane Katrina.
Sir Laurie Magnus, chairman of Lexicon Partners, revealed the figure, quoting Bank of America research, claiming this was an opportune time for the insurance sector "to raise some easy money".
Magnus was speaking at the first Insurance Times Capital Conference this week on the capitalisation of the market.
The dominant players seeking capital were reinsurers, he said, but he added there was also plenty of scope for brokers and others within the insurance industry to raise cash.
"Hedge funds are actively targeting the insurance sector because they like its volatility," he said, adding that "even retail guru Philip Green has £1bn to invest".
But Magnus warned that regulation was exerting a heavy toll in terms of cost pressures. And, he said that many insurance shares were poor performers, even being outperformed by cash held on deposit.
"There are problems in the UK with increasing regulation - regulators mean well but it comes at a price. Defined benefit pension schemes are failing and the industry is being hit with new rules, such as not being able to go to AIM without a prospectus."