NEW YORK ( TheStreet) -- Many analysts have already raised their estimates for the insurance industry on the expectation for a slightly better than expected third quarter.

Life insurers are facing weak top line growth and a low interest rate environment that is cutting into their bond-heavy investment income, but these factors are not likely to impact third-quarter profits, says Sandler O'Neill associate director Edward Shields.

"Overall, spreads will be largely unaffected in the third quarter by the low interest rate environment," Shields said.

Investors should watch MetLife ( MET - Get Report) and Prudential ( PRU), which are both likely to give updates about their recent acquisitions from American International Group ( AIG - Get Report).

"For Prudential, it will be getting the details of the acquisition," Shields said. "MetLife is likely to announce the updated cost saving and integration costs of its ALICO acquisition."

MetLife management announced during the third quarter that integration costs for ALICO would run closer to $500 million instead of the originally estimated $350 million. Wells Fargo ( WFC) analysts says MetLife's third- quarter estimates will be at $1.05 per share, compared to the consensus of $1.06 per share due to equity market performance.

Wells Fargo also increased it estimates on Prudential Financial's third quarter earnings to $1.47 per share, compared to the consensus estimate of $1.44 a share. However, many analysts are likely to ask questions concerning the insurer's plans for AIG Star and AIG Edison in Japan and how shareholders are likely to benefit from the acquisition in the long run during the earnings conference call.

Due to sales of AIA, ALICO and American General, AIG is likely to do better this quarter than last. Wells Fargo analysts increased their estimates for the third quarter to $1.63 per share, compared to the consensus of 86 cents a share.

"These estimates reflect AIA as a continuing operation and remove results fromAmerican General Finance, which we had previously modeled to generate losses of approximately $700 million annually," Wells Fargo analyst John Hall wrote in a note.

Shields says that the biggest surprise earnings report in the life insurance business should be Ameriprise Financial's ( AMP - Get Report) results. Sandler O'Neill and Wells Fargo have a third quarter EPS estimate of $1.15 a share, compared to the consensus of $1.05 a share.

"Results will likely be better than what the street predicts because a recent acquisition. The street was surprised last quarter too, but now it is likely to make a more meaningful contribution," Shields said.

P/C insurers should also have a solid quarter because of a quite hurricane season, according to Paul Newsome, a managing director at Sandler O'Neill. This may spare Allstate ( ALL - Get Report) or Travelers ( TRV - Get Report), which usually stand out during third quarter earnings due to hurricane losses.

Travelers did have slightly more exposure to storms during the third quarter than competitors, says Woodbury. However, Travelers also increased product prices, which could help the insurer even up. Newsome adds that Travelers has also been aggressively repurchasing shares.

Sandler O'Neill estimates that Travelers will report a third quarter 2010 EPS estimate of $1.38 per share which is in line with the consensus of $1.39 per share.

Allstate's third quarter may suffer slightly due to weather-related losses, particularly in the U.S. Midwest. Sandler O'Neill's third quarter 2010 EPS estimate is 71 cents per share, below consensus third quarter estimates of 83 cents per share.

Other P/C insurers to watch this quarter are ACE ( ACE) and XL Group ( XL).

Sandler O'Neill estimates that other analysts may be overestimating catastrophe losses for ACE and predicts an EPS estimate of $1.84 a share, compared with the consensus of $1.72 a share. Meanwhile, XL Group may announce buybacks this quarter. Sandler O'Neill's EPS estimate is 54 cents a share compared with consensus of 53 cents a share.

" We believe XL (like Allstate) has been accumulating excess capital over the year and might consider resuming its share purchases now that the bulk of the hurricane season is past us," Shields wrote in a note.

Investors are also likely going to be watching the reports of two monoline insurers Ambac Financial Group ( ABK) and MBIA ( MBI - Get Report).

Jim Ryan Senior Analyst of Equity Research at Morningstar says the two insurers aren't likely to see much growth this quarter, but the two might benefit from lenders foreclosure suspensions in the short run. The hold on mortgage foreclosures means that Ambac and MBIA, which both insure mortgages, won't have to pay as many claims in the fourth quarter. That doesn't change Ryan's view that the future of the two companies is on the brink.

"We still have the same view that the future of Ambac and MBIA's business are shadowed by extreme uncertainty," Ryan said.

--Written by Maria Woehr in New York.

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