(Reuters) ? Many stock analysts see another year of gains for insurers, and expect companies like ACE Limited, a Bermuda-based insurance group, to profit from an expected hike in premium pricing because of heightened demand after record losses in 2005.

And Bermuda reinsurance companies like Arch Capital Group, PartnerRe Ltd. and EverestRe Group, should also do well from insuring the higher-valued policies sold by insurers, analysts said.

The prediction is good news for insurance stock which posted an overall gain of 15.9 percent in 2005, according to insurance credit rater A.M. Best Co., compared with a three percent rise in the S&P 500 stock index. Best performers were the life and health insurers, which were up 32 percent. Other areas of the industry gained at a slower pace; insurance brokers by 9.3 percent, property casualty insurers by seven percent and multiline insurers by 6.7 percent, according to John Williams, an A.M. Best business analyst.

Even within those subgroups there were big winners. Aon rose 51 percent to $35.95 during the year, while Progressive climbed 39.7 percent to $116.78. Aon?s gains came after a dismal 2004, when its shares underperformed amid a probe of bid-rigging in the insurance industry.

Aon paid $190 million to resolve allegations by regulators that it had steered clients to favoured insurers. Some analysts believe these stocks are poised for even more gains in 2006 after coming through a tough 2005 marked by three hurricanes that cost the industry more than $50 billion. US property and casualty insurers? earnings rose 4.4 percent in the first nine months despite those losses. ?I know it?s tough to recommend a stock that?s up as much as Aon, but we still feel it has further to go,? said Cliff Gallant, insurance analyst with Keefe, Bruyette & Woods.

Mr. Gallant said in an interview that Aon would rise to the ?mid-$40 range and earn $2.70 a share in 2006.?

Analysts polled by Reuters Estimates, on average, expect Aon, the world?s second-largest insurance broker, to earn $2.08 a share in 2005 and $2.37 in 2006. ?In our view, primary insurers (in property and casualty) are positioned to have an extraordinarily profitable year, perhaps the best year over the past 50,? said Mr. Gallant. He is also recommending The Hanover Insurance Group and American International Group Inc. Paul Newsome of A.G. Edwards Inc. is recommending Progressive, the third-largest auto insurer by premiums written.

?People are underestimating their earnings power,? Newsome said in an interview. Newsome carries an $8.05 a share estimate on Progressive for 2006, while the consensus is $7.15, according to Reuters estimates. While Progressive has a conservative strategy, ?they are likely to grow as fast as the market allows,? Mr. Newsome said.

Mr. Newsome is also recommending commercial carrier ACE Limited , which insures ships, docks and off-shore oil platforms that were hard-hit by Hurricane Katrina and where premiums are likely to rise sharply.