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Here we go again (see part I and part II):

Financial Guaranty

MBIA (NYSE:MBI) pulls out a positive surprise and ends the day up. I suspect that in the current environment where there is a lot of skepticism over structured finance, that it doesn’t take much of a positive surprise to give MBIA a lift. Too many shorts.

Title

Stewart (NYSE:STC) misses badly, and doesn’t fall much. Part of it is due to a charge for title claims that is likely to be nonrecurring. STC has a good track record, little debt, and is trading below book already. How much can it get hurt?

Primary Casualty

Travelers (NYSE:TRV) beats and raises guidance and the price falls. Huh? They showed decent top line growth as well. Could that be a worry in a softer pricing environment? It could, but so far that’s not the way other stocks have responded. Philadelphia Consolidated misses and the stock falls, though the company maintains their earnings guidance. When you have a high multiple, investors expect more I guess.

Mortgage

After lackluster results from RDN and MTG, Triad Guaranty (OTC:TGIC) beats earnings and the stock jumps 5%. Amazing what good earnings will do when peers have missed. That said, I would be skeptical of future quarters in 2007.

The Bermudans

Transatlantic (NYSE:TRH) beat by a decent amount and the stock went nowhere. Perhaps the recent market moves after the reports of the earnings of peers have silently moved the bar above where the sell side left it. Arch Capital (NASDAQ:ACGL) beats as well; we’ll have to see how it does tomorrow. I wouldn’t expect much of a move. The valuation on a book basis is significantly higher than that of peers. It takes more of a beat to significantly move the needle. Anybody done a good reserve analysis on ACGL?

Diversified

Old Republic (NYSE:ORI) (that venerable and stodgy firm; I like stodgy.) missed estimates. General insurance did well, while mortgage and title both lagged. Hartford beats and raises guidance. Good quarter all around, particularly in variable annuities. Makes me think that when the life companies start reporting next week, that asset- and mortality-sensitive ones should do well. We’ll see how HIG does tomorrow. I’ll be listening to the call. Who knows, maybe I’ll lob in a question.

Full disclosure: long HIG

Source: 1Q07 Insurance Earnings: What's Working, What's Not (Part III)