NEW YORK (Bloomberg) — Chubb Corp., the 11th-largest US property insurer, said first-quarter profit fell 6.5 percent amid claims losses were related to windstorms and tornadoes and a decline in underwriting income.

Net income fell to $664 million, or $1.77 a share, from $710 million, or $1.71, in the same period a year ago, the Warren, New Jersey-based company said in a statement yesterday. Underwriting income fell 4.7 percent to $502 million.

"It's a tough market," chief executive officer John Finnegan said on the company's conference call. "But it isn't falling off a cliff."

Disaster claims shaved nine cents a share from profit in the most recent quarter, Chubb said. Hurricane-force winds battered the US west coast in January, causing as much as $600 million in insured losses industry-wide. The number of reported tornadoes in the quarter rose 50 percent in the US from a year earlier, the National Oceanic and Atmospheric Administration said.

Profit excluding investment gains was $620 million or $1.65 a share, beating the $1.55 average estimate of 19 analysts surveyed by Bloomberg.

Chubb repurchased 11.3 million shares during the period, chief financial officer Mike O'Reilly said. It had 365.5 million shares outstanding by the end of the quarter, down from 393.6 million at the close of December 2007.

Chubb rose $1.77, or 3.5 percent, to $53.03 in New York Stock Exchange composite trading. The company has declined 2.8 percent this year, compared with an 8.2 percent drop for the KBW Insurance Index.

Chubb, the second-largest insurer of corporate boards and executives after American International Group Inc., may be vulnerable to a declining stock market and "turmoil" in the fixed income market, Sandler O'Neill & Partners LP analyst Paul Newsome said in a note to investors April 9.

"There has obviously been an uptick in the number of claims, but they remain in aggregate, unsurprising to us," chief administrative officer John Degnan said in the company's conference call. He said the company "consciously avoided" writing directors and officers insurance for sub-prime companies.

The number of sub-prime-related lawsuits is accelerating "dramatically," with 170 cases filed in federal courts during the first three months of 2008, a report issued by Chicago-based Navigant Consulting said.

It "suggests that the sub-prime mortgage and related filings — now totalling 448 cases over the 15 months ended March 31 — will soon surpass the 559 savings-and-loan cases of the early 1990s," the report said.