NEW YORK (Bloomberg) — Chubb Corp, the insurer that agreed this month to be bought by Ace Ltd, said second-quarter profit slipped 1 per cent on weaker investment results and costs tied to the transaction.

Net income decreased to $494 million, or $2.14 a share, from $499 million, or $2.03, a year earlier, the New Jersey-based company said in a statement yesterday. Operating profit, which excludes some investment results, was $2.08 a share, beating the $1.86 estimate of 19 analysts surveyed by Bloomberg.

Chief executive officer John Finnegan agreed on July 1 to sell his company to Ace. While Chubb was a “very attractive franchise” to target because of its strength in niches such as property insurance for the wealthy, the merger makes risk-management more difficult, said Brett Horn, an analyst at Morningstar.

“The industry in general is not particularly attractive, so the more diversified you get, the more you start to resemble the industry as a whole,” Horn said.

Ace agreed to pay about $124.13 in cash and stock for each share of Chubb, based on the buyer’s June 30 closing price. That was a 30 per cent premium for Chubb, which climbed 7.1 per cent in 2014 and 28 per cent the year before.

Book value, a measure of assets minus liabilities, slipped to $70.12 a share from $70.33 as of March 31. Results for Chubb’s second quarter included $20 million in pretax expenses tied to the Ace deal.

Premium revenue in the second quarter increased 2.3 per cent from a year earlier to $3.13 billion. Chubb posted a combined ratio of 85.5, meaning it retained 14.5 cents on each premium dollar after claims and expenses. That improved from a ratio of 90 per cent a year earlier. The insurer’s commercial unit raised rates for renewing clients by 1 per cent, down from 4 per cent in the second quarter of 2014.

Investment gains narrowed to $20 million before tax from $125 million a year earlier. Property-casualty investment income fell to $263 million from $275 million. In the second quarter, Chubb repurchased 2.8 million shares at a cost of $278 million.

Ace said on Tuesday that second-quarter net income rose 21 per cent to $942 million as policy sales climbed. Travelers Cos, the only property insurer in the Dow Jones Industrial Average, announced a 19 per cent increase the same day.