NU Online News Service, July 27, 2:07 p.m.EDT

Zurich, Switzerland-based insurer ACE Ltd. says second quarternet income decreased 10 percent primarily on catastrophelosses.

The company says pretax catastrophe losses, includingreinstatement premiums, were $134 million for the quarter, comparedto $81 million during the same time last year.

ACE reports net income for the second quarter dropped $70million to $607 million. Net premiums written jumped 16 percent, or$533 million, to $3.9 billion in the quarter. The carrier'scombined ratio increased 2.9 points to 92.6, compared to 89.7 lastyear during the second quarter.

Given the size of the catastrophes, ACE “had an excellentquarter,” says Evan G. Greenberg, ACE's chairman and chiefexecutive officer, during a conference call.

In the benefits area Greenberg says payrolls are showing growth,but the growth is “anemic.”

Insurance rates are increasing, he notes, by single- anddouble-digits in some lines. However, the increases are notbroad-based. Greenberg says that casualty rates are “bouncing alongthe bottom.”

Property and casualty net premiums written increased 15 percentcompared to the 2010 second quarter.

ACE increased its earnings guidance for the full year for 2011with after-tax operating income now expected to be in the rangebetween $6 and $6.20 per share.

“We are quite bullish about the second half of the year,” saysGreenberg. “We are well-positioned to capitalize on a modestlyimproving commercial p & c environment,” he says in astatement.

The guidance includes $544 million in after-tax catastrophelosses for the first half of the year and an additional $200million in catastrophe losses for the balance of the year.

For the first six months of the year, net income has dropped 40percent, or $566 million, to $866 million. Net premiums writtenrose 6 percent to $7.4 billion. The combined ratio for the firsthalf of the year is 98.4, up 7.2 points.