(Bloomberg) <\m> Shares of Hartford Financial Services Group Inc. and Chubb Corp. led US insurance stocks down after analysts predicted competition would accelerate, lowering prices on property and casualty coverage.Hartford’s stock fell $3.96, or 4.3 percent, to $87.25 in New York Stock Exchange composite trading, contributing to the biggest drop in the Standard & Poor’s 500 Insurance Index since June. Chubb’s slumped $2.21, or 4 percent, to $52.44, its largest decrease in two years.

Chubb and Hartford reported jumps in third-quarter profit yesterday after passing the peak of the Atlantic Ocean hurricane unscathed a year after Hurricane Katrina. Prices have been falling, and the flush of capital may encourage insurers to become more aggressive to gain market share, said Jay Cohen, an analyst at Merrill Lynch & Co. in New York.

“The results are simply unsustainably good, and we would expect to see some deterioration,” Cohen said. “A lot of these companies would like to write more business, and that is when you start to see pricing come down.”

Commercial insurance rates fell an average of 5.3 percent in the third quarter, the 10th straight drop, even as prices to cover hurricane-prone coastal properties reached historic highs, a survey by the Council of Insurance Agents & Brokers showed.

“Pricing pressures are likely to build into 2007,” Hartford Chief Executive Officer Ramani Ayer said in a conference call with analysts today. “Underwriting margins are just not sustainable at the current levels.”

Net income at Warren, New Jersey-based Chubb increased to $604 million, or $1.43 a share, from $246 million, or 60 cents, a year earlier. Profit at Hartford, based in the Connecticut city of the same name, rose to $758 million, or $2.39 a share, from $539 million, or $1.76 a share.

A decline in Genworth Financial Inc., the insurer divested by General Electric Co., also contributed to the 1.5 percent drop in the S&P insurance index.

Shares of Genworth dropped 7 percent, their biggest-ever decline, after third-quarter earnings from mortgage insurance unexpectedly fell on higher claims.

The Richmond, Virginia-based company said third-quarter net income fell to $304 million, or 65 cents a share, from $307 million, or 64 cents, a year earlier.