(Bloomberg) — Chubb Corp., the insurer of corporate boards andmega-yachts, said second-quarter profit fell 14% and lowered its2014 forecast after margins worsened on claims costs tied tofires.

Net income was $499 million, or $2.03 a share, compared with$579 million, or $2.21, a year earlier, the Warren, NewJersey-based company said today in a statement. Profit excludingsome investment results was $1.70 a share, missing the $1.90average estimate of 20 analysts surveyed by Bloomberg.

Results were hurt by “severe weather in the United States aswell as an unusually high level of homeowners' and commercial firelosses,” Chief Executive Officer John Finnegan, 65, said in thestatement.

The insurer spent 90 cents of every premium dollar on claims andexpenses in the second quarter, worse than the 88.8 cents of costsa year earlier. Finnegan has sought to boost prices for coverage asweather-related damage drove up costs in recent years.

Finnegan's company now expects full-year operating profit of$6.75 to $6.95 a share, Chubb said today. That compares with aprojection in January of $7.10 to $7.40.

Chubb declined 10 cents to $92.76 at 4 p.m. in New York. It hasfallen 3.9% this year, compared with the 0.6% gain by theseven-company Standard & Poor's 500 Property & CasualtyInsurance Index. Results were released after the close of regulartrading.

Share Repurchases

Book value, a measure of assets minus liabilities, rose to$68.60 a share from $66.36 as of March 31. The insurer spent $375million in the second quarter on buybacks, repurchasing about 4million shares at an average price of $92.95.

Travelers Cos., the only property-casualty insurer in the DowJones Industrial Average, said on July 22 that second- quarterprofit missed analysts' estimates on natural disaster claims.Allstate Corp., the largest publicly traded U.S. auto and homeinsurer, has said its costs tied to catastrophes such as hailstorms and tornadoes were $936 million before taxes in thequarter.

Chubb's policy sales rose 4 percent to $3.22 billion. Investmentgains narrowed to $125 million before tax from $179 million a yearearlier.

–With assistance from Noah Buhayar in New York.

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