Individual investors often overlook the insurance industry due to its complex financial reporting and the many different flavors of insurers. But this is one industry you don't want to ignore. If you were to compile a list of some of the best-performing stocks over any long-term investment horizon, you'd find insurers throughout the list because of their ability to create wealth for shareholders by taking risks one policy at a time.

Below, three Motley Fool contributors make the case for three different insurers with very different business models: Markel (MKL 0.64%), Chubb (NYSE: CB), and First American Financial (FAF 0.44%).

Check out the latest First American, Chubb, and Markel earnings call transcripts.

Not your average insurance operation

Matt Frankel, CFP (Markel): One insurance stock that's already one of my largest holdings, and that I'm thinking about buying more of, is Markel.

The company's core business is specialty insurance. In a nutshell, Markel provides insurance in situations that few other companies will -- such as coverage for classic cars, ATVs, and snowmobiles -- as well as insurance products for things like weddings and liability insurance for high-risk businesses, just to name a few. Specialty insurance generally translates to higher profit margins, and Markel has a strong history of just that.

In addition, it aims to achieve superior returns on its float by investing in stocks as well as private companies through its Markel Ventures segment. In fact, Markel Ventures' revenue climbed 18% year over year during the fourth quarter of 2018. Because it has a more adventurous investment strategy than most insurers use, Markel is often compared to an early stage Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), and it's not tough to see why.

Markel has underperformed the market recently due to an announced investigation into its reinsurance business' reserves, but this isn't likely to cause a permanent strain on the company. Furthermore, the company's recently released quarterly results didn't look too great overall, although as my colleague Steve Symington wrote, all of the issues that caused the lousy performance are short-term headwinds.

The bottom line is that Markel is an excellent long-term business at a temporary discount, so now could be a great time to pick up some shares.

Hand placing a coin in a glass jar.

Image source: Getty Images.

Own the best

Jordan Wathen (Chubb): If you measure an insurer's quality by its long-term underwriting results -- and you should -- Chubb is arguably the best in the business. A conservative underwriting culture, loyal customers, and scale give it an edge over even its most capable competitors.

Think of any large business, and there's a good chance it's a Chubb customer. As one of the world's largest commercial insurers, Chubb has sold at least one insurance product to more than 90% of Fortune 1,000 companies. It's also active in writing policies for smaller, middle-market businesses -- companies that are privately held, but typically generate $100 million or more in annual revenue.

Chubb's scale and breadth give it an inherent edge over smaller insurers. Its size enables it to hold down its operating costs as a percentage of premiums and take some of the largest risks on its balance sheet. Its breadth in the number of insurance lines gives Chubb the option to cut back in corners of the industry that are overrun by competition and divert capital to lines where it can earn higher returns.

Chubb is an insurer so good, that recommending it almost feels like cheating. But the market doesn't reward you for difficulty, and there isn't another insurer I'd put ahead of it for offering the prospect of market-beating returns from a business model that will still allow you to sleep well at night.

A bet on a housing recovery

Dan Caplinger (First American Financial): When most people think about insurance, they think about protection against things like car accidents or damage to their homes in the event of a natural disaster. But there are many different types of insurance, and sometimes it's the companies that offer specialty lines that fare the best over the long run.

One type of insurance that many people don't pay much attention to is title insurance. But First American Financial has made it its business to provide homeowners with the title insurance coverage they need in order to obtain mortgages and purchase the homes of their dreams.

First American's business is cyclical, and that creates buying opportunities when conditions aren't ideal in the industry. Recently, mortgage activity has fallen because of rising interest rates, and First American has seen the impact as sales fell 4% during the fourth quarter of 2018 compared with year-earlier levels. Yet even though a plunge in refinancing activity drove the residential segment down, strength in the commercial area helped to minimize the damage.

Moreover, when housing bounces back, it should give First American the opportunity to reassert its dominance in the space. Buying quality stocks when they're down and out is often a smart strategy, and First American could look like a smart buy right now if you think that the long-term prospects for a housing recovery are good.