Prospects Are Improving for Insurers

I am allocating more of my portfolio into insurance stocks. This certainly is not a sexy move like buying an up-and-coming tech stock or adding another Bakken play to my investments, but one that makes a lot of sense right now. 

The insurance sector is one of few areas where most of the stocks still look pretty cheap even after the rally of the last few months. Several major carriers are still selling significantly under book value and the industry has several tailwinds picking up.  First, the insurance stocks will benefit as interest rates rise and boost the performance of their investment portfolios. Second, the pricing environment for property insurers after Sandy is much improved.  In addition, book value is growing nicely again after taking significant hits during the financial crisis. Finally, many of the bigger insurance stocks are picking up buybacks and/or boosting their dividends....311 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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