The austere economic environment continues to dictate the fortunes of global insurers who returned generally modest profits in the second quarter.

Ace recorded a 28% fall in net profit of $US535 million ($647 million), as net written premium declined 5% to $US3.4 billion ($4.1 billion).

The combined ratio for the insurer was 87.7%, compared to 87.8% a year earlier.

US-based Liberty Mutual recorded a 9% fall in second-quarter net profit of $US274 million ($331 million), despite a 10% rise in net written premium of $US6.9 billion ($8.3 billion).

The combined ratio worsened slightly in moving to 98.8% from 98% at the same point last year.

XL Capital blamed a stronger US dollar for a 66% slump in second-quarter net profit of $US79.9 million ($96.6 million), while the Bermudian insurer’s combined ratio deteriorated to 93% from 91.6%.

Property and casualty net written premium fell 21% to $US1.08 billion ($1.3 billion) in the quarter compared to the same period last year.

US insurer WR Berkley managed to buck the trend, reporting a 21% increase in net profit of $US97.4 million ($117.8 million). An increase in the value of the investment portfolio helped offset an 8% fall in net written premium.

The combined ratio reflected lower margins, moving to 95.3% from 93.3%.