(Bloomberg) -- Hartford Financial Services Group Inc., theinsurer that sold life units to focus on property-casualtycoverage, increased its share buyback by $1.6 billion and raisedthe dividend 17 percent as second-quarter profit beat analysts’estimates.

The insurer posted net income of $413 million, or 96 cents ashare, compared with a loss of $467 million, or $1, a year earlierthat was driven by costs tied to the sale of a Japan annuitybusiness, according to a statement Monday from Hartford. Operatingprofit, which excludes some investment results, was 91 cents ashare, while analysts had predicted 77 cents according to theaverage estimate in a Bloomberg survey.

The insurer’s shares gained 9.8 percent this month in New Yorktrading amid speculation that it could become a takeover targetafter Ace Ltd. agreed to buy Chubb Corp. for more than $28 billion,accelerating the push for mergers and acquisitions in the industry.Chief Executive Officer Chris Swift and his top deputies arescheduled to discuss results on a conference call Tuesday and willprobably face questions about possible deals.

“This is going to be a quarter where nuances in operatingearnings take a back seat to commentary on M&A,” RobertGlasspiegel, an analyst with Janney Montgomery Scott, said in aphone interview before results were announced. “I think there willbe lots of questions on M&A, and certainly Hartford is acompany where that will be front and center.”

Travelers Cos., the lone property insurer in the Dow JonesIndustrial Average, would probably see value in Hartford’soperation selling insurance to small commercial businesses, CreditSuisse Group AG analysts led by Ryan Tunis said in a note on July13. Travelers, led by CEO Jay Fishman, is less likely to beinterested in a U.S. annuity business that Hartford is winding downafter getting rid of similar operations in the U.K. and Japan,Tunis wrote.

Fishman’s view

Fishman, who built Travelers through mergers and acquisitions,said July 21 that he’s still interested in takeovers.

“We do keep looking at M&A opportunities, and when webelieve there is a transaction that contributes to creatingshareholder value, we’ll make every effort to complete it,” Fishmansaid in a conference call. Earlier that day, the company said thatsecond-quarter profit increased 19 percent.

Ace net income for the period advanced 21 percent, while Chubbposted a 1 percent decline.

Hartford has bolstered its staff after Swift took over as CEO inJuly 2014. The company announced July 20 that it hired formerGeneral Re President Morris Tooker as chief underwriting officerfor P&C operations, a week after appointing Mary Boyd and CaseyCampbell to help oversee its personal lines division.

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