There are a number of blue-chip insurance shares on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). With so much choice it can be hard to decide which to have in your portfolio.

In order to maintain a diverse portfolio I have always felt it is wise to limit your portfolio to just one insurance share. But should you have Insurance Australia Group Ltd (ASX: IAG), QBE Insurance Group Ltd (ASX: QBE), or Suncorp Group Ltd (ASX: SUN) in your portfolio today?

Of these three insurance shares it is QBE Insurance which I believe represents the best value for money for investors at the moment.

The insurer has been very busy with its transformational program and things are looking very positive. It has achieved cost savings amounting to almost US$400 million, which should prove to be a great boost to its margins moving forward and help increase profitability.

Additionally, its recently revamped website aims to tailor content to meet the needs of its customers and create engagement. I have high hopes that the new design will help improve its online sales conversion. Online sales are incredibly important and if the company can perform strongly through this medium the effects should be felt on the bottom line.

So far in 2016 the share price has dropped just over 15%. I feel this could be a great buying opportunity for long-term buy and hold investors. Especially when you take into account the full year estimated fully franked dividend of 67 cents that is equal to a 6.2% yield.

According to CommSec, analysts are predicting the dividend to grow by a massive 20% per annum for the next two years. This market-beating dividend will be supported by earnings growth of around 13%.

At present the shares are priced at 12 times estimated FY2016 earnings. This is a discount to Suncorp and Insurance Group Australia which are priced at 13 and 14 times estimated FY2016 earnings.

Whilst all three are worthy of having in a portfolio, the combination of potential share price gains and a market-beating dividend means QBE Insurance is the better investment at the moment in my opinion.

Foolish takeaway

Insurance shares will have many ups and downs. But thanks to the strong dividends that they pay, they can become a key part of a portfolio. I believe an investment in QBE Insurance, with a long-term view will prove to be a great one and expect to see strong total returns over the next few years.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.