(Bloomberg) ? Chubb Corp., ACE Ltd. and XL Capital Ltd. will probably say this week that second-quarter profit rose at least 15 percent as premiums reached a three-year high and started to decline, according to analysts including Jay Gelb at Prudential Financial Inc.

The commercial insurers boosted sales and income from investments, said Gelb and Merrill Lynch & Co. analyst Jay Cohen. Loews Corp.?s CNA Financial Inc., probably had a profit after reporting a loss in the same period last year.

Property and casualty insurers? profits improved as they tripled premiums in the wake of the September 11 terrorist attacks and corporate scandals at Enron Corp. and WorldCom Inc.

The gains are ending as higher profits spur price competition, especially from insurance companies that started up since 2001. ?Pricing, policy terms and negotiating leverage with customers? have started to deteriorate, Gelb said in a research report this month titled ?The Party is Over.?

At Chubb, the second-biggest seller of insurance that covers losses from shareholder lawsuits, profit rose 26 percent to $299.6 million, or $1.58 a share, according to the average estimate of 11 analysts surveyed by Thomson Financial.

Bermuda-based ACE will report that profit rose 29 percent to $369 million, or $1.25 a share, a Thomson survey of 10 analysts predicts.

XL, also based in Bermuda, will have a 15 percent increase to $307.8 million, or $2.20, according to a Thomson survey of eight analysts. CNA may earn 60 cents a share after losing 87 cents last year, according to the average estimate of five analysts. The estimates exclude realised investment gains and losses and don?t represent net income.

Profit growth from premiums is coming to an end, industry executives say. Insurers cut rates for property and some liability policies, including directors and officers? coverage.

?You cannot expect that you?re going to see rates just go up and up indefinitely,? Maurice ?Hank? Greenberg, Chairman and Chief Executive of American International Group Inc., said on a conference call with analysts last week.

New York-bases American International, the world?s largest insurer, said its US commercial insurance sales in the second quarter expanded at the slowest pace since 2001 because of price cuts.

The company reduced property rates by 15 percent and liability policies for directors and officers by as much as 10 percent to meet price competition. American International?s second-quarter net income rose 26 percent to $2.86 billion, in part due to its expansion in Asia.

?The cycle is coming to a close,? said Ben Walker, a fund manager at Gartmore Global Investments, which oversees about $75 billion.

Walker said he sold most of its insurance stocks about six months ago because he expects premiums to erode and rising interest rates to hurt the value of insurers? bond investments.

Property rates will probably decline 9 percent in 2004, and all commercial rates will fall an average 3 percent, according to a survey of insurance buyers by Gelb.

MetLife Inc., the second-largest US life insurer, and Aflac Inc., the world?s largest seller of supplemental health insurance, also report this week.

MetLife, which trails American International in US life insurance sales, may say profit dropped 11 percent to $581 million, or 77 cents a share, according to the average estimate of seven analysts surveyed by Thomson.

The New York-based company had a $126 million gain last year from a legal settlement and one- time accounting and tax benefits in Mexico.

Aflac will probably say profit rose 18 percent to $284 million, or 56 cents, according to the average estimate of four analysts surveyed by Thomson. The company, which is based in Columbus, Georgia, and gets a majority of its profit from Japan, added agents and managers to its US business to revive sales growth after a slump last year.

Marsh & McLennan Cos., the biggest insurance brokerage, may report net income rose 5.4 percent to $384.6 million, or 72 cents a share, according to an estimate of six analysts.

St. Paul Travelers Cos., the second-largest commercial insurer, last week postponed its earnings release scheduled for Wednesday after disclosing a $1.63 billion shortfall in reserves to pay claims. The insurer is talking with the US Securities and Exchange Commission about how to account for the deficit, which may result in a quarterly loss of as much as $300 million. Its shares rose 62 cents to $36.28 at 9:39 a.m. in New York Stock Exchange composite, after losing 2.4 percent Friday.

ACE and other insurers said they are prepared to scale back sales if prices continue to fall. For now, most types of coverage remain profitable for insurers, they said.

?People who are growing today are doing the right thing, not the wrong thing,? ACE Chairman Brian Duperreault said during a presentation at a Sanford C. Bernstein & Co. conference last month.

?The industry is now charging, even with softer rates, much more for a lot less exposure,? said Legg Mason Wood Walker?s Michael Paisan, who recommends investors buy ACE, XL and Chubb shares. ?Underwriting margins should continue to be quite strong.?