Bullish on Insurance stocks

I believe all the major American insurance companies are due for a major positive correction. Why? Their P/Es are at all time lows (The Chubb Corp is at 7.5), and at the same time their profits are staying strong, and the companies are paying out reliable dividends. Since the start of the current market turmoil, the fundamentals of these companies haven’t changed substantially. In the next few months, all finance stocks, particularly the insurance ones, are likely to continue on their rebound.

Insurance companies are some of the most conservatively managed companies and consequently are least likely to suffer under sub-prime bond strains. They must manage their reserves conservatively and among a variety of sectors in order to keep their abilities to pay dividends. I believe the investing community does not currently understand these facts fully, and these stocks are majorly undervalued. Also, in the long term, the insurance industry is unlikely to get hurt through Global Warming induced climate change, as the industry covers a diversified range of risks - motor, life, salary protection, injury insurance etc.

Here is a selection of insurance companies with their crucial details:

Symbol P/E Yield (%) Market Cap

CB 7.5 2.2 20.26BN

LTR 11.7 0.5 30.17BN

CGI 10.4 3.3 2.18BN

MET 6.7 1.2 44.6BN

OB 8.2 4.0 2.1BN

So what do you think? Would you risk your hard earned cash on one of these companies? Let me know what you think by leaving a comment. Thanks - Shane H.