American International Group Inc. (AIG) posted the largest gain among big insurers as Sanford C. Bernstein & Co. said the stock presents a “once in a generation” opportunity after the firm repaid a U.S. rescue.

“With the Treasury out, and AIG a public company once again, this will be the year that the company begins to make progress on driving earnings, returns to buying back stock, and likely institutes a dividend,” Josh Stirling, an analyst at Bernstein, said in a note to investors today.

AIG rallied 1.6 percent to $37.30 at 4:01 p.m. in New York, the top increase in the 22-company Standard & Poor’s 500 Insurance Index. The advance brought this year’s gain to 5.7 percent, after a 52 percent surge (AIG) in 2012. New York-based AIG repaid the last of its $182.3 bailout in December, more than four years after the company’s near collapse and a U.S. rescue wiped out most of the equity value.

The insurer still trades at about half of its book value while rivals Ace Ltd. (ACE) and Travelers Cos. change hands today at more than the measure of assets minus liabilities.

“We see a once in a generation low-risk chance to buy a recovering franchise at a substantial discount,” wrote Stirling, who reiterated his outperform rating (AIG) on the company. “Investors will rotate from bidding for the now expensive quality names to scouring for value among the turnaround stories.”

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net