Why QBE Insurance Group Ltd is falling today

What:  QBE Insurance Group Ltd (ASX: QBE) has fallen 1.4% today despite a solid rally on the ASX which has pushed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) up over half of one percent.

So what: The cause of the fall would appear to be a note to clients by an analyst at broker Morgan Stanley which suggested that the new incoming QBE Chief Financial Officer Mr Pat Regan may take the opportunity to raise fresh capital.

Now what: News overnight that the European Central Bank (ECB) has dropped the rate on bank deposits to negative, coupled with an uninspiring general outlook for QBE leaves investors with little reason to get excited about the global insurer. The one saving grace (arguably) is the stock price, which in the long term could represent good buying.

For investors looking for exposure to the insurance industry they should probably consider Insurance Australia Group Limited (ASX: IAG) given its domestic focus and exposure to higher interest rates. IAG has also just received the “all clear” from the Reserve Bank of New Zealand, which brings it one-step closer to purchasing Wesfarmers Ltd’s (ASX: WES) underwriting business which will further boost its domestic market share.

An even better bet than insurers

Insurance companies can be difficult businesses to value and harbour high risks. These problems can be avoided by investing in the following stock. The Motley Fool has issued a firm "BUY" rating on this small but ultra promising ASX company... and you can get the name and code FREE right now. Click here for your free copy of "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Tim McArthur owns shares in QBE Insurance Group Ltd.

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