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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (34451)	6/3/2009 6:44:16 PM
From: Logain Ablar	Read Replies (2) of 78748

Hi Paul: I have a comment on ACE or any PC insurer this year. Typically this is the time of year they languish from a stock price perspective due to the CAT season. If the CAT's really blow there can be a big hit to surplus. Now ever since Andrew in 1991 the reinsurers have been able to go out and raise new capital after a CAT and the stocks have done realitively well all things considered as the industry has also been able to raise premium rates. This year will be more difficult to raise fresh capital, investment returns will be lower (on a relative basis ignoring companies hits last year in the hedge funds) and AIG is a wild card as it trys to retain market share so rate increases in the recession have so far been difficult (not for CAT reinsurance, propery reinsurance rates appear to be up pretty good). Now TRV, CHUBB, ACE are probably the top 3 public so you did pick a good company. ACE has the old CIGNA P&C business (INA ??). BV for an insurer is typically a good entry point but ACE should have a lot of goodwill due to its acquisitions (I'm sure TRV has its share as well).

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