With hurricane season under way, many observers are tracking an event that originated in Bermuda and reached New York earlier this week. Bermuda property and casualty ("P&C") insurer Allied World Assurance Company Holdings
Allied World Assurance was formed in November 2001 by a group of investors including AIG
Insurers such as Inside Value pick Endurance Specialty Holdings
Est. 5-Yr. Earnings Growth |
P/ BV |
Forward P/ E |
|
---|---|---|---|
Endurance Specialty |
12% |
1.1 |
5.9 |
Peer Group Average* |
11.75 |
1.45 |
9.51 |
At $34.80 per share (Tuesday's closing price), Allied World is valued at 1.2 times book value. If we assume that Allied World earns $5 per share this year (which certainly seems achievable), the implied forward P/ E would be 7. Evaluated on this limited basis, Allied World looks cheap relative to its peer group.
Insured catastrophe losses exceeded $60 billion in 2005, which has ushered in a "hard" pricing environment. According to reports, Berkshire Hathaway
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Fool contributor Alex Dumortier has a beneficial interest in Endurance Specialty Holdings, but no financial interest in any of the other companies mentioned in this article. He welcomes your (constructive) feedback. The Motley Fool has a strict disclosure policy.