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NEW YORK ( TheStreet) -- The U.S. government released its two-year retrospective on the Troubled Asset Relief Program this week, and in making the case that there is reason to celebrate, a notable part was played at the TARP two-year anniversary party by AIG ( AIG).

Political cynics argue that the government is putting out its rosy TARP scenario for political purposes, ahead of the congressional elections in November. The investment case is of more interest.

The government is saying that the final TARP price tag may only be $50 billion, and possibly as low as $30 billion, based on the price it gets for its TARP-sanctioned ownership of AIG, when preferred shares are converted into AIG common shares over a period of years.

It's a delicate dance for the government in attempting to minimize the negative TARP baggage by saying it's investment is going to pay off, or at least end up as a wash. The government stresses that it doesn't speak in terms of investments -- until it does -- and that TARP was never enacted for investment purposes -- until it's convenient to talk about AIG as an investment that didn't end up being so bad after all the fuss made on Main Street.


Is the U.S. government set to become the next stock guru, advising investors on wise undervalued companies to buy, using as its brokerage sales pitch its TARP portfolio of companies? Will Treasury Secretary Tim Geithner become author of an insurance stock newsletter? Maybe the United States of America will ultimately pursue an initial public offering with AIG serving as dealbook runner, only to ultimately be taken private by Berkshire Hathaway ( BRK.B).

Even if TARP is not the taxpayer burden the government once estimated that it would be -- as much as $341 billion -- it's probably safe to say that the government won't be going for its series 7 license. One doesn't need to make the philosophical case that the government has no place managing public stock investments to come to this conclusion. Just look at all the insurance stocks that over the past two years actually posted some decent performance. Geithner & Co. couldn't even put together a decent basket of underperforming insurance stocks set to rally, but had to pick from the bottom of the barrel.

The KBW Insurance Index (pictured above) is up just under 50% since the beginning of November 2008. November 2008 was the month when the government announced its restructured TARP bailout package for AIG.

Of course, it's important to remember that AIG's five year performance is much worse than its two-year story. AIG shares had already been tanking by the time November rolled around, and Lehman was already history. Yet for TARP historical purposes, and as TARP and the restructured AIG bailout hit the two-year anniversary, what follows is a look at the insurance stocks that didn't just manage to survive, but outperformed their sector, and all without the helping hand of brokerage firm Uncle Sam LLC.

There are eight insurance stocks in the KBW Insurance Index that outperformed the median return of 48.6% over the past two years, since AIG and its toxic debt cohorts took down the entire financial sector. Read on to read about the real insurance outperformers, ranked from the least outperformance to the best of the non-TARP-backed bunch.

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8. Assurant ( AIZ)

Two-year return through Sept. 30: 59.7%

Stock price on Oct. 31, 2008: $25.48

Stock price on Sept. 30, 2010 $40.70

Current distribution of analyst rankings: 4 buys, 7 holds, 1 sell

Current price target range: $39-$48

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Assurant five-year performance: 44%

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7. Fidelity National Financial ( FNF)

Two-year return through Sept. 30: 74.4%

Stock price on Oct. 31, 2008: $9.01

Stock price on Sept. 30, 2010 $15.71

Current distribution of analyst rankings: 4 buys, 3 holds

Current price target range: $15-$18

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Fidelity National five-year performance: -44%

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6. Prudential Financial ( PRU)

Two-year return through Sept. 30: 80.6%

Stock price on Oct. 31, 2008: $30

Stock price on Sept. 30, 2010 $54.18

Current distribution of analyst rankings: 15 buys, 3 holds, 1 sell

Current price target range: $60-$81

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Prudential five-year performance: 16.9%

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5. Ameriprise Financial ( AMP)

Two-year return through Sept. 30: 119.1%

Stock price on Oct. 31, 2008: $21.60

Stock price on Sept. 30, 2010 $47.33

Current distribution of analyst rankings: 8 buys, 4 holds

Current price target range: $50-$65

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Ameriprise five-year performance: 47.56%

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4. Hartford Insurance ( HIG)

Two-year return through Sept. 30: 122.4%

Stock price on Oct. 31, 2008: $10.32

Stock price on Sept. 30, 2010 $22.95

Current distribution of analyst rankings: 6 buys, 11 holds,2 sells

Current price target range: $20-$42

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Hartford five-year performance: -69%

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3. XL Group ( XL)

Two-year return through Sept. 30: 123.3%

Stock price on Oct. 31, 2008: $9.70

Stock price on Sept. 30, 2010 $21.66

Current distribution of analyst rankings: 11 buys, 6 holds

Current price target range: $18-$27

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

XL Group five-year performance: -67%

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2. MGIC Investment Corp. ( MTG)

Two-year return through Sept. 30: 137.9%

Stock price on Oct. 31, 2008: $3.88

Stock price on Sept. 30, 2010 $9.23

Current distribution of analyst rankings: 7 buys, 1 hold, 1 sell

Current price target range: $9-$15

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

MGIC five-year performance: -84.4%

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1. Genworth Financial ( GNW)

Two-year return through Sept. 30: 152.5%

Stock price on Oct. 31, 2008: $4.84

Stock price on Sept. 30, 2010 $12.22

Current distribution of analyst rankings: 8 buys, 8 holds, 1 sell

Current price target range: $13-$22

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Genworth five-year performance: -60%


Meanwhile, just because these eight insurance stocks may have made more quick money as undervalued insurance plays for TARP over the past two years, and the trio of Assurant, Ameriprise and Prudential even managed positive gains over the 5-year time horizon, there are a few KBW Insurance Index members that managed to do even worse than AIG since the historic events of the Fall 2008.

Read on for the real dogs of insurance sector who didn't see a dime from Uncle Sam....

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MBIA ( MBI)

Two-year return through Sept. 30: 2.2%

Stock price on Oct. 31, 2008: $9.83

Stock price on Sept. 30, 2010 $10.05

Current distribution of analyst rankings: 1 buys, 3 holds

Current price target range: $8-$15

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

MBIA five-year performance: -81%

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AON ( AON)

Two-year return through Sept. 30:-7.5%%

Stock price on Oct. 31, 2008: $42.30

Stock price on Sept. 30, 2010 $39.11

Current distribution of analyst rankings: 7 buys, 9 holds

Current price target range: $38-$54

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

AON five-year performance: -3%

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Marsh & McLennan Companies ( MMC)

Two-year return through Sept. 30: -17.6%

Stock price on Oct. 31, 2008: $29.28

Stock price on Sept. 30, 2010 $24.12

Current distribution of analyst rankings: 9 buys, 6 holds, 1 sell

Current price target range: $20-$32

AIG stock price on Oct. 31, 2008: $38.20

AIG stock price on Sept. 30, 2010: $39.10

AIG two-year return through Sept. 30: 2.4%

AIG five-year performance: -96.7%

Marsh & McLennan five-year performance: -20%

--Written by Eric Rosenbaum in New York.

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