Oh, how I love quarterly disappointments. OK, I don't really love them when I own a full position in a stock and find myself screaming "What the *bleep* do you mean, down 5%?!" But when I'm on the outside looking in, a drop of a few percentage points can be downright inviting.

So, with that in mind, I'm not particularly worried about AIG's (NYSE:AIG) quarter. And you shouldn't be either.

Premium growth in the general insurance business was a little pokey, but investment income was strong and the loss ratio looked pretty good -- particularly since I think this management team has a conservative streak at present. Over rates are shaping up in a way that should be good for the company -- property rates keep going up (particularly in the energy business), though casualty rates are a little more subdued.

The life insurance business was also a bit mixed. The domestic life business seemed all right, but overseas premium growth wasn't great, and the Japanese and Taiwanese businesses were weak. In the case of Japan, at least, the cause isn't a huge surprise -- folks there are showing less interest in foreign currency-denominated annuity products. AIG's other businesses (financial services and asset management) were weaker, as the company saw higher borrowing costs and portfolio runoffs, among other things.

Here's the thing about insurance stocks like AIG that intrigues me. There's this perception that it's almost a commodity business and that anybody with capital can compete. Take a look at lines like reinsurance (companies such as XL Capital (NYSE:XL) or Montpelier Re (NYSE:MRH)), medical malpractice (ProAssurance (NYSE:PRA)), or even auto and home insurance (Allstate (NYSE:ALL) and Progressive (NYSE:PGR)) and you see that the good underwriters tend to outperform over time.

After all, insurance really isn't a uniform business -- whom you choose to insure and how much you charge them really matters. As does your modeling of catastrophe risk and the concentration of your risk exposure.

That's a roundabout way of saying that AIG has durable competitive advantage. And though I'm still somewhat more drawn to the reinsurers right now, AIG looks like a pretty compelling bargain -- even with this "bad" quarter in the books.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).