NEW YORK (Bloomberg) — Ace Ltd., the insurer added to the Standard & Poor's 500 Index this month, reported a fourth straight increase in quarterly profit as investment losses narrowed.

Second-quarter net income climbed 27 percent to $677 million, or $1.98 a share, from $535 million, or $1.58, in the year-earlier period, the Zurich-based company said yesterday in a statement. Operating income, which excludes some investment results, was $2.01 a share, beating the $1.84 average estimate of 19 analysts surveyed by Bloomberg. The insurer said it expects full-year operating profit per share at the upper end of the $6.25 to $6.75 forecast it gave in January.

An improvement in investment results is a "step in the right direction" after two years in which industrywide writedowns were larger, said Michael Paisan, a New York-based analyst at Stifel Nicolaus & Co., in an interview before earnings were released.

The insurer, which has substantial operations in Bermuda, posted an investment loss of $11 million compared with a $171 million loss in the year-earlier period. Ace, which operates in more than 50 countries, has posted profits during a global economic slump that crimped demand for coverage.

The insurer's share price has gained about 6.1 percent this year while the S&P Index is little changed.

Premium revenue slipped one percent to $3.2 billion. Excluding the effect of currency fluctuations, the figure declined three percent.

"Slow economic recovery in the major developed economies of the United States, Europe and Japan and competitive global insurance markets impacted total premium growth, and I expect these conditions will be with us for some time," said Evan Greenberg, chief executive officer of Ace, in the statement.

Ace is competing for customers as industry rates decline and insurers seek to attract business by cutting rates. Corporations have eliminated jobs and plants amid concerns the global economic recovery will stall, reducing the need for coverage. US commercial insurance rates fell 6.4 percent in the second quarter and have dropped every quarter since 2004, according to the Council of Insurance Agents and Brokers.

Ace earned 10.3 cents for every premium dollar in the second quarter, compared with 12.3 cents a year earlier, as catastrophe costs more than doubled to $81 million.

Book value, a measure of assets minus liabilities, rose to $63.20 a share from $60.94 on March 31. Securities rated AAA make up more than one half of Ace's fixed-income portfolio as of March 31, according to a statement on the company's website. Long-term AAA corporate debt returned 10.5 percent in the second quarter, a Bank of America Merrill Lynch index shows. That compares with a decline of 12 percent for the S&P 500.