(Bloomberg) -- Chubb Corp., the insurer of high-end homes andmega-yachts, said fourth-quarter profit fell 1.9% as investmentincome declined.

Net income dropped to $558 million, or $2.35 a share, from $569million, or $2.24, a year earlier when there was more stockoutstanding, the Warren, New Jersey-based company said in astatement Thursday. Operating profit, which excludes someinvestment results, was $2.29 a share, beating the $2.17 estimateof 20 analysts surveyed by Bloomberg.

Property-casualty insurers have been struggling with low bondyields that pressure investment returns and increased competitionas hedge funds seek to bet on weather-related risks. Chubb alsofaces the prospect of an intensifying rivalry with Ace Ltd. afterthe Zurich-based company agreed to buy the Fireman’s Fund unitserving wealthy clients, according to Paul Newsome, an analyst withSandler O’Neill & Partners LP.

“The low-interest-rate environment isn’t favorable for Chubb,”Newsome said in an interview before the results. “They’re seeingtheir investment portfolio returns decline.”

Chubb said that 2015 operating profit will probably be in therange of $7.35 to $7.65 a share, compared with the average estimateof $7.82 in a Bloomberg survey of 21 analysts. The forecast assumesthat investment income will fall 6% to 8%. Fourth-quarterinvestment income slipped 6.9% to $325 million before tax.

Book value, a measure of assets minus liabilities, rose to$70.12 a share on Dec. 31 from $70 three months earlier. In thefourth quarter, Chubb repurchased 3.4 million shares at a cost of$346 million.

The insurer on Thursday approved a new buyback program for asmuch as $1.3 billion of the company’s stock. That compares with a$1.5 billion authorization last January.

Chubb has slipped 0.9% this year to $102.52 as of 4:03 p.m. inNew York, after climbing 7.1% in 2014. Results were released afterthe close of regular trading.

Travelers Cos., the only property-and-casualty insurer in theDow Jones Industrial Average, said on Jan. 22 that fourth-quarterprofit rose 5.1% to $1.04 billion. Ace said Tuesday that net incomefell 44% to $555 million as the company had an investment loss tiedto variable-annuity reinsurance.

Chubb’s premium revenue in the fourth quarter rose 2.5% from ayear earlier to $3.12 billion. The insurer posted a combined ratioof 84.3, meaning it retained 15.7 cents on each premium dollarafter claims and expenses. That improved from a ratio of 85.5% ayear earlier.

For the full year, net income fell to $2.1 billion or $8.62 pershare, from $2.3 billion, or $9.04.

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