Rising property insurance costs are playing an increasinglyimportant role in quarterly financial reports, according to aninvestment bank analysis.

Morgan Stanley analyst William Wilt said a sampling of data fromsecond-quarter company conference calls indicates greatercatastrophe insurance costs are hurting policyholders more andmore.

“Realistically, insurance expenses may not be a major source ofearnings disruption, but companies near the edge of consensusexpectations may start to add rising insurance costs orweather-induced earnings volatility to their list of 'one-time'expense items in upcoming quarters,” he wrote.

Insureds that have retained more risk through less coverage orincreased deductibles face a greater threat of earnings volatilityin the coming quarters, Mr. Wilt wrote.

The following are samples from some second-quarter conferencecalls:

o AMB Property Corp. said expenses rose 3.7 percent dueprimarily to a rise of up to 40 percent in property-casualtyinsurance rates.

o Starwood Hotels reported that, at the hotels it owns outright,property premiums are up 100 percent on a year-over-year basis.

o Hilton Hotels Chief Financial Officer Robert LaForgia saidthat increased property costs will account for about 30 basispoints in profit margin.

o Wal-Mart reported that it is now 100 percent self-insured forany losses from named windstorms since the insurance it was offeredwas substantially more limited and higher priced than in previousyears.