Chubb Corp CB's $28.3 billion hook-up with ACE Limited ACE unveiled Wednesday might pique investors' interest in a sector that a former New York Stock Exchange official calls undervalued.
"People don't pay enough attention to it," Georges Ugeux told Benzinga Tuesday.
"It might be the right time for the investors really to understand better the risk and business model of insurance," according to Ugeux, who currently runs the New York investment advisory firm Galileo Global Advisors.
Chubb rose more than 30 percent Wednesday after it agreed to be acquired by Ace for cash and shares equal to $124.13 a share.
"Chubb is an amazing company," Ugeux said prior to the merger announcement. "They do extremely well, but nobody talks about it."
Ugeux didn't discuss merger potential, but said the insurance industry is broadly poised to obtain improved performance from its investment portfolios as interest rates rise.
Among North American insurers, Ugeux also recommended Metlife Inc MET and Canada-based Manulife Financial Corporation MFC.
In Europe, Ugeux singled out Axa SA AXAHY and Allianz SE AZSEY.
In addition to the Chubb deal with Ace, other noteworthy merger agreements in the sector so far this year have included Axis Capital Holdings Limited AXS's merger agreement with Partnerre Ltd PRE, Endurance Specialty Holdings Ltd. ENH's hookup with Montpelier Re Holdings Ltd. MRH and XL Group plc XL's acquisition of CATLIN GROUP LTD CLNGF.
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