However, Ace raised its financial outlook for the full year, in part due to the lower-than-expected catastrophe losses.
The company, based in Zurich, said net income was $328 million, or 96 cents per share, for the three months ended June 30. That was down from $594 million, or $1.74 per share, for the same period a year ago.
The latest results included $415 million in net realized losses, primarily from variable annuity reinsurance derivatives. Stripping out the one-time losses, ACE earned $2.17 per share.
ACE's net premiums written grew 4.5 percent to $4.13 billion for the quarter, and underwriting income rose 46 percent to $429 million.
Total after-tax catastrophe losses including reinstatement premiums were $41 million, down from $101 million in the year-ago period.
ACE cited the lower catastrophe losses and expansion of its financial reserves as it raised its full-year expectations for $7.20 to $7.60 per share in after-tax operating income. In April, the company expected earnings of $7.03 to $7.43 per share.