Reinsurance is a form of coverage that an insurance company obtains as a hedge against catastrophic loss when claims exceed a specified amount. Insurers concerned about the unpredictability and potential for damage of hurricanes, particularly firms operating in states other than Florida that have no dedicated hurricane fund, buy private reinsurance coverage.

"The hurricanes have had a speculative effect on the insurance stocks, which ran up in price as they approached," said William Yankus, managing director with Fox-Pitt, Kelton in Hartford, Conn. "There was a belief that the companies had coverage for the first and second hurricane, but the third wouldn't be covered in the original contract and, as a result, the stocks of companies providing reinsurance would react favorably."

The average investor can't intelligently anticipate every possible disaster. Jumping in and out of insurance stocks would therefore be foolhardy.

"Insurance companies are a long-term investment because it is a cyclical industry by nature," explained Mark Dwelle, equity analyst with Ferris, Baker Watts Inc. in Richmond, Va. "Short-term it is affected by storms and the like, but over a longer period just about all the insurance stocks perform pretty well."

Keeping the uniqueness of this seesaw risk business firmly in mind, the stocks of some reinsurance companies and property and casualty insurance firms now appear attractive for long-term investors.

Here are the insurance and reinsurance stock recommendations from our team of experts:

• The St. Paul Travelers Companies Inc. (stock symbol STA), its stock selling below liquidation price because of hurricane and asbestos claims, is a Moazami selection. The company is the merger result of the St. Paul and Travelers insurers and the majority owner of Nuveen Investments.

• American International Group Inc. (AIG), offering general and life insurance, financial services, retirement services and asset management, is another Moazami choice.

• Ace Ltd. (ACE), a holding company whose subsidiaries provide reinsurance and insurance products to insurance companies in the United States and 50 other countries, is favored by Moazami and Paisan.

• Renaissance Re Holdings Ltd. (RNR), whose reinsurance coverage includes terrorism and aviation, is suggested by Dwelle.

• IPC Holdings Ltd. (IPCR), whose reinsurance includes earthquakes and riots, is a Dwelle choice.

• XL Capital Ltd. (XL), global provider of tailored products in reinsurance, insurance, financial products and professional services, is a Paisan pick.

• PartnerRe Ltd. (PRE), a reinsurance and insurance company with clients in 120 countries, is a Yankus choice.

• Everest Re Group (RE), a provider of reinsurance and insurance in the United States, Bermuda and international markets, is a Yankus pick.

• Max Re Capital Ltd. (MXRE), offering reinsurance, insurance and administrative services, is the final Yankus selection.

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Andrew Leckey answers questions only through the column. Address questions to Andrew Leckey, "Successful Investing," P.M.B. 184, 369-B Third St., San Rafael, Calif. 94901-3581, or by e-mail at andrewinv@aol.com.