Investment returns are likely to be better in the second quarter than in the first, and weather-related catastrophe losses are "just a bit above the typical second-quarter's result," estimated Edward Shields of Sandler O'Neill & Partners. He expects "a fairly positive" second quarter except possibly in one area - the amount of favorable reserve releases insurers report, which Shields expects to diminish throughout the rest of the year. Reserve releases are triggered when insurers set aside money for claims above what is needed.

After years of steadily falling prices for commercial property/casualty insurance, large commercial insurance customers reported prices were up by a fraction of a percentage point in the first quarter, according to a survey conducted by Towers Perrin. If the trend continues, "it could take some of the pressure off insurer loss ratios," said Thomas McIntyre, a principal with Tower Perrins' insurance group, in an interview.

Still, insurance ratings agency A.M. Best expects the industry to perform below earnings expectations for the rest of 2009, as weak investment returns combine with lackluster underwriting results. Commercial property/casualty insurers will turn an underwriting profit for the year, barring major catastrophe losses, but expect "a challenging year," according to A.M. Best.

Wall Street Expectations: Analysts expect Chubb to report operating profit of $1.30 a share on revenue of $2.96 billion, according to a poll by Thomson Reuters. Last year, Chubb reported operating earnings of $1.40 a share in the second quarter of 2008, on revenue of $3.35 billion.

Key Issues: Chubb provides directors and officers coverage to corporations. Shareholder lawsuits have proliferated in recent quarters, which could hurt. Chubb is a top pick for Keefe Bruyette & Woods, which expects the insurer to pick up market share from weaker competitors. 

Wall Street Expectations: Analysts polled by Thomson Reuters expect ACE to report operating profits of $1.94 a share on revenue of $3.7 billion. Last year, Ace reported second-quarter operating earnings of $2.18 a share on revenue of $3.83 billion.

Key Issues: Ace and other property/casualty insurers have said they expect to see pricing improve sometime this year. Sandler O'Neill's Shields says he doesn't expect that improvement to be "particularly great."

Investors will be listening for any guidance Ace offers on reinsurance it wrote covering life insurance companies' variable annuity guarantees.

Wall Street Expectations: Analysts expect Travelers to report operating profit of $1.28 a share on revenue of $6.17 billion. Last year, Travelers reported second-quarter operating profit of $1.50 a share on revenue of $6.3 billion.

Key Issues: Travelers could be a beneficiary of a so-called flight to quality as customers seek out insurers that have maintained a good rating, said Jay Gelb of Barclays Capital in a recent research note.

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