) -- With financial stocks like


(C) - Get Report


Bank of America

(BAC) - Get Report

looking pricey these days, largely ignored property and casualty insurers seem like relative bargains.

Citigroup and Bank of America are trading at 60 and 20 times estimated 2010 earnings, respectively. Meanwhile, as the accompanying chart shows, many property and casualty insurer stocks trade below book value. The eight I've selected all trade below their historic price to book ratios of the last five years.

They look good on a price-to-earnings basis as well, with all except


(CB) - Get Report


Cincinnati Financial


, trading below their average price-to-earnings multiples of the last five years.


(ALL) - Get Report


ACE Ltd.




(TRV) - Get Report

look particularly good vs. their historical multiples.

Despite the attractive valuations, not to mention some healthy dividends, investors couldn't be less interested. Chicago-based Sandler O'Neill analyst Paul Newsome was in New York Monday to talk to investors about the sector, but many wouldn't even meet with him.

"People are focused on virtually anything else but this sector," he said.

The weak economy has taken its toll on insurers like virtually everything else, but Newsome says insurance for individuals, which makes up about half the industry, has been relatively stable.

"Most people, even in a recession, are not going to give up their car, and the same is true for their home," Newsome says. By contrast, a decline in construction activity has caused commercial insurance underwriting business to take a big hit.

Newsome wrote in a report published Monday that investors he spoke with believe the sector lacks a catalyst to take it higher. Newsome believes there could be a catalyst for Allstate, however, in the form of stock buybacks. While he argues the stock looks attractive even if it doesn't buy back stock until 2011, he thinks buybacks could begin as soon as the second half of next year.

Mark Dwelle, an analyst at RBC Capital Markets, believes investors are reluctant to look at the sector now because, having had a good 2009, they don't want to take many risks before year end. A natural catastrophe of some kind anywhere in the world could cause stocks to take a short term hit.

"Things can only go wrong for an insurer between now and the end of the year," Dwelle says.

Dwelle recommends investors looking to get into the sector before institutional money managers repositioning their portfolios for 2010 should look at ACE, Chubb and

WR Berkley

(WRB) - Get Report

. He says those companies have a strong record of delivering underwriting profits regardless of how the economy is performing, but will do exceptionally well if the economy gets back to full health.

Whether or not there is an immediate catalyst to lift property and casualty insurers, history suggests investors would do well to take a close look at these names.

"This is as cheap as the sector gets," Dwelle says.


Written by Dan Freed in New York