) -- No industry provides as diverse a risk profile as insurance. On one side is the ailing

American International Group

(AIG) - Get Report

, and on the other is the belt-and-suspenders of


(TRV) - Get Report


There's plenty in the middle. Here are three insurers that stand a shot at rebounding strongly along with the economy without risking too much.

Employers Holdings

(EIG) - Get Report

is a property and casualty insurer with subsidiaries that are workers-compensation providers for low- to medium-hazard industries. In the third quarter, total assets of $3.8 billion were up from a year earlier. Equity of $524 million was up 33%. Total revenue was up 38%. And net income of $31 million fell only 2.4%.

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Employers Holdings' book value per share is $11.86. The company's price-to-book value of 120% is higher than the NYSE insurer average of 92%, justified by its low price-to-earnings ratio of 5.3. The stock price has dropped 11% in the past 12 months. A beta of 0.78 (1 is a perfect correlation with the stock market) indicates low risk. There's a small 1.69% dividend yield.

Mercury General

(MCY) - Get Report

is a California-based automobile insurer and broker. It has been putting away cash, holding $204 million in September, up from $33 million a year earlier. Total assets have held steady, as have policy reserves. Even as policy income has remained right around $653 million, investment income of $206 million has significantly pushed up revenue, to $861 million from $459 million, resulting in net income of $158 million versus a loss of $141 million.

Mercury General's book value per share has grown 4% to $32.29, and the price-to-book value is 116%. Perhaps held back by the small but continued reductions in premiums, the P/E ratio of 3.3 is low in an industry in which the average is just over 9. Short interest in the stock is on the increase at 6.95, but the share price is holding steady even as it fell 15% drop over the past year. Estimated income reductions for 2010 could be holding back the stock, though it's trading $1 above analysts' consensus price target. Mercury General pays a fat 6.3% dividend.

Universal American


is a health-care insurer focusing on the elderly and disabled. If health-care reform enlarges Medicare's role, Universal American could benefit. Meanwhile, membership has dropped, and investment income has fallen. Despite that, revenue has remained stable, and net income has risen 22%.

Universal American's book value per share has risen 14% to $17, and the price-to-book value of 64% is significantly less than the industry average of 92%. With a P/E ratio of 3.7, it's a tempting stock, but short sellers are lurking, with a short interest ratio of 6.6 on the rise. The stock price has declined 2.4% in the past year, belying the beta of 1.1. The company pays no dividend, and a slight income reduction is being projected for 2010.

-- Reported by Gavin Magor in Jupiter, Fla.

Gavin Magor is the senior analyst responsible for assigning financial-strength ratings to insurance companies. He conducts industry analysis and supports consumer products. Magor has more than 22 years of international experience in operations and credit-risk management, commercial lending and analysis. His experience includes international assignments in Sweden, Mexico, Brazil and the U.S. He holds a master's degree in business administration from The Open University in the U.K.