Tuesday, December 17, 2013

The Motley Fool: A Long-Proven Winner Is Being Underestimated

Strong sector performance has led to a lack of quality insurance companies trading at any meaningful discount to fair value. Property catastrophe reinsurance maven RenaissanceRe (NYSE: RNR  ) , or RenRe, looks like a bit of an exception. Of course, exceptions elicit the question, "What's different here?" In the case of RenRe, it looks like investors are concerned about the acknowledged weakness in catastrophe premiums next year, as well as the possibility that the favorable reserve development well has started running dry.

Next year will almost certainly be a down year for catastrophe reinsurance premiums, but I think investors may be acting a little hastily in assuming that RenRe's growth in specialty and Lloyd's can't cushion the blow. Moreover, I think RenRe, along with Arch Capital (NASDAQ: ACGL  ) and Axis Capital (NYSE: AXS  ) , is in on the very highest level in terms of management quality and underwriting skill. Perhaps it's smarter to wait for the insurance sector as a whole to pull back, but RenRe's relative underperformance makes it more interesting to me these days.

Read the full article here:
A Long-Proven Winner Is Being Underestimated

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