NEW YORK (Bloomberg) - Ace Ltd has reported second quarter profit dropped 10 percent on losses tied to natural disasters.Net income for the quarter ended June 30 fell to $607 million, or $1.77 a share, from $677 million, or $1.98, a year earlier, the global insurer said in a statement.Ace boosted its forecast for 2011 operating profit as premium revenue climbed.Operating profit, which excludes some investment results, was $2.01 a share, beating the $1.65 average estimate of 19 analysts surveyed by Bloomberg.“This was another difficult quarter for natural catastrophes, while the challenges of a competitive insurance market globally and sluggish economic conditions in developed markets continue to weigh on growth,” Ace CEO Evan Greenberg said in the statement.“In contrast, our strategy of investing for growth, both organically and through acquisition, while resolutely maintaining underwriting discipline, continues to distinguish our company in terms of revenue growth, earnings and risk management. Our P&C net premiums grew 15 percent in the quarter while our combined ratio was 92.6 percent, which included net catastrophe losses of just over $100 million.“Looking ahead to the second half of the year, we are confident we will achieve double-digit revenue growth and meet or exceed our updated earnings projections. We are well positioned to capitalise on a modestly improving commercial P&C pricing environment.“In light of what we now “In light of what we nowknow, we are raising full-year guidance to $6.00 to $6.20 per share of after tax operating income from $5.40 to $5.70 per share projected at the end of last quarter.”Mr Greenberg has been expanding through the acquisition of a US crop guarantor and life insurers in Asia.Premium revenue climbed 16 percent from last year's second quarter to about $3.76 billion. Excluding the effect of currency fluctuations, the figure increased 12 percent.Book value, a measure of assets minus liabilities, rose to $71.36 a share, compared with $69.33 on March 31.The insurer raised its forecast on operating profit for the year to a range of $6.00 to $6.20 a share from its projection of $5.40 to $5.70 a share at the end of the first quarter.Ace climbed 39 cents to $65.88 in New York Stock Exchange composite trading before results were released.The stock gained 5.8 percent this year, compared with a 7.4 percent drop in the 24-company KBW Insurance Index.Ace earned 7.4 cents for every dollar it collected in premiums for the quarter, compared with 10.3 cents a year earlier. Second-quarter natural disasters cost Ace $134 million, compared with $81 million last year.US property-casualty insurers including Travelers Cos and Chubb Corp suffered increased claims costs from a US tornado season that killed more than 150 people in Joplin,Missouri, and leveled parts of Tuscaloosa, Alabama. Travelers last week reported its first unprofitable quarter in seven years because of the storms.Storms in the second quarter affected Ace less than rivals because it has a smaller presence in the homeowners market, Dan Theriault, an analyst at New York-based Portales Partners LLC who rates Ace “buy”, said in a telephone interview before results were announced.