Most of Bermuda's property and casualty (re)insurers are trading well below their book values after a year in which they have recovered strongly from the tumult of 2008.

A lack of expensive catastrophes and rebounding financial markets have helped the group of 18 US-listed companies included in the table (shown right) to recover well this year after the devastation of 2008.

Most of them lost money in the third quarter of 2008, at a time when the financial markets were in free-fall following the collapse of investment bank Lehman Brothers and claims that poured in from the September hurricanes, Gustav and Ike. But this year's third quarter has seen all but two of the group swing back to profit.

Even more notable has been the remarkable rise in the book value - an accounting measure of assets minus liabilities - of the group through the first nine months of 2009.

The best performer on the net income measure was PartnerRe, which made a profit of $566.7 million during the July through September period. The second best was achieved by Class of 2005 reinsurer Validus Holdings Ltd. , which posted third-quarter net income of $499.2 million.

Both PartnerRe, one of the few commercial reinsurers in Bermuda that has not branched out into insurance, and Validus have increased their size this year - Validus through its takeover of IPC Holdings Ltd. and PartnerRe through the acquisition of Paris Re, which makes the company the fourth largest reinsurer in the world.

The third biggest profit, of $494 million, came from Ace Ltd., which is included in the table because of its large presence on the Island and its roots here, even though it is now domiciled in Switzerland.

On the measure of book value Montpelier Reinsurance Holdings Ltd. has achieved the most remarkable climb among the group through the first nine months of the year, with a 36.7 percent increase in its book value per share to $20.21.

Not far behind was XL Capital Ltd., with a 35.3 percent rise, and Arch Capital Holdings Ltd., whose book value soared 35.2 percent to September 30.

Twelve of the 18 have achieved a book value rise of more than 20 percent this year, a remarkable bounce back after they lost billions of dollars in value last year amid crashing financial markets and the third highest insured losses from hurricanes in history.

As of yesterday, most of the group of 18 were trading at a large discount to book value, suggesting there may be opportunities for value investors who can stomach the earnings voliatility that is inevitable in the P&C insurance business.

Wilbur Ross, a New York investor who has a remarkable track record of finding value in distressed companies, told The Royal Gazette in late August that he believes Bermuda (re)insurers are "severely undervalued".

For example, yesterday afternoon, XL was trading at just over three-quarters of its September 30 book value, even after its shares have already risen almost 400 percent this year.