From Fairfax's 2007 AGM Slides:
For those conservatively positioned, industry losses from MBS and Corporate bonds could be a blessing which forces stronger pricing/underwriting profits.
Recently, I ran across a small-cap California insurer. It was trading for 53 million with shareholder's equity of 70 million. It also generated 80 million in float, and its investment portfolio was almost completely invested in US treasuries. To top it off, their operations were generating an underwriting profit while also heavily re-insuring their business. That to me was a bargain which beats holding cash any day.