Who is Insuring the Insurers?

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With operations in both insurance and reinsurance, Axis Capital Holdings Ltd. (NYSE:AXS) saw the smallest year-over-year quarterly revenue growth, possibly in part due to their exposure to both sectors. Earnings came in at huge surprise last quarter, with a beat of over 60%, but current estimates for the last period due out February 4th point to negative earnings. Billionaire Ken Griffin of Citadel fame cut his position in more than half leading up to his last 13F filing in September of 2012.

RenaissanceRe Holdings Ltd. (NYSE:RNR) writes primarily property catastrophe reinsurance, which means a higher susceptibility to nature-related events. Their price-to-book is the highest of our five spotlighted reinsurers, trading at 1.22. RNR stands as the weakest growth opportunity, and while bias on the Street has a positive slant, more analysts are recommending to hold versus buy.

The $4.1bn Reinsurance Group of America (NYSE:RGA) finishes out our list, with the smallest price-to-book and price relative to projected earnings. RGA’s stock made new yearly lows after Sandy but has been on the mend since. Despite that drop, RGA stands out as our most attractive undervalued reinsurer play, potentially racking up double-digit returns on its way to achieving analysts’ mean price target of $64.59 a year out. It could mean holding through a rocky ride however — RGA missed earnings two times out of four last year (including a 27% miss in October).

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