Wall Street hedge funds gamble with Eaton Fire insurance claims

Wall Street hedge funds are swooping in to buy possible insurance claims tied to California’s Eaton fire, a move that has rattled state officials and raised ethical concerns about profiting from catastrophes.

The investors are targeting so-called subrogation claims, a process in which an insurance company, after paying a policyholder for a loss, assumes the legal right to seek repayment from the third party responsible for the damage.