RenaissanceRe Holdings Ltd. agreed to buy Platinum Underwriters Holdings Ltd. for about $1.9 billion, combining Bermuda-based reinsurers to gain scale as established firms fend off competition from hedge fund investors.

The deal values Platinum at $76 a share, 24 percent more than its closing price on Nov. 21,RenaissanceRe said in a statement today. The buyer will pay 7.5 million of its shares and about $1.16 billion in cash, according to the statement.

The purchase “will benefit our combined companies’ clients through an expanded product offering and broker relationships,” RenaissanceRe Chief Executive Officer Kevin O’Donnell said in the statement. “It will also accelerate the growth of our U.S. specialty and casualty reinsurance platform.”

Reinsurers have been seeking to combine to diversify risk and appeal to customers and intermediaries who are increasingly turning to hedge funds that are betting on the industry. Evan Greenberg, the CEO of Ace Ltd., said last month that he expects more deals as competition squeezes profit margins.

Potential buyers “will see no way of getting their growth or actually keeping themselves from shrinking, or margins deteriorating, and they see this as their only option,” Greenberg said on an Oct. 22 conference call. “I expect you’ll see more of a feeding frenzy for what comes to market.”

Hedge funds investors including Dan Loeb and David Einhorn have pushed into reinsurance in recent years to help gain access to premiums that they can use to buy securities.

Hamilton Insurance Group Ltd., the reinsurer backed by hedge fund firm Two Sigma Investments LLC, struck a deal last month to buy units from Fairfax Financial Holdings Ltd. as part of a push into primary coverage. Reinsurers provide backstop coverage to primary carriers.

RenaissanceRe’s senior management team will remain in place, and the combined company will keep the buyer’s name and headquarters, according to the statement. The deal is scheduled to close in the first half of 2015, subject to the approval of Platinum shareholders.

Morgan Stanley is the banker for RenaissanceRe, which got legal advice from Willkie Farr & Gallagher LLP. Platinum used Goldman Sachs Group Inc. and Sullivan & Cromwell LLP.

The $76-a-share figure includes a $10 dividend that Platinum will pay to its shareholders before the deal is complete. Investors in the target company will have the option of receiving an additional $66 in cash. Or they could either take stock or the combination of 0.2960 RenaissanceRe common share and $35.96 in cash for each Platinum share.

The insurance industry has been consolidating for years. In another recent reinsurance deal, Aquiline Capital Partners bought a majority stake in reinsurance broker Beach & Associates.

--With assistance from Jon Menon in London and Zachary Tracer in New York.