NEW YORK (Bloomberg) - Chubb Corp., the insurer of businesses and high-end homes, halted its securities-lending programme and said third-quarter earnings fell by more than half on costs from hurricanes and investment losses.

Net income was 70 cents to 74 cents per share, the Warren, New Jersey-based company said yesterday in a statement, compared with $1.87 a year earlier. Operating income, which excludes declines in the value of some holdings, was 90 cents to 94 cents, missing by at least 31 cents the average estimate of 17 analysts surveyed by Bloomberg.

Chubb joins insurers including Travelers Corp. and MetLife Inc. in releasing preliminary results as shareholders demand information about portfolio declines. Chubb said investment losses reduced quarterly earnings by about $115 million. The company expects clients to return the $150 million in securities it has on loan by December, Chubb said.

Chubb's after-tax investment losses were about $80 million, which "in this environment is a pretty good showing", said Alan Devlin, an analyst at Atlantic Equities LLP in London.

The insurer declined $1.15, or 2.8 percent, to $39.28 at 11.21am in New York Stock Exchange composite trading. That's better than the 9.5-percent drop in the 24-stock KBW Insurance Index.

Ike, the costliest US storm since Katrina in 2005, contributed to about $400 million in catastrophe losses for the insurer in the quarter. Bermuda-based business carrier and reinsurer XL Capital Ltd. estimated that total industry losses from the hurricane, which hit Texas last month, could exceed $15 billion.

By halting securities lending, Chubb "offset any potential fears," the company could mishandle the programme, Mr. Devlin said. American International Group Inc. (AIG), once the world's largest insurer, announced this month it had access to $37.8 billion in Federal Reserve funds needed to return collateral to borrowers. AIG had invested some of the collateral in securities tied to sub-prime loans. AIG agreed last month to turn over majority control to the US in exchange for an $85 billion loan.

Insurers, which hold stocks and bonds to back policies, lend out securities to get an added return. Carriers get cash collateral, which they then reinvest. If the value of their investments goes down, insurers have to make up a shortfall when borrowers return the securities, according to CreditSights Inc. analyst Robert Haines.

MetLife Inc., the biggest US life insurer, said on October 8 that the balances and margins at its securities-lending business will probably shrink. Chief financial officer William Wheeler said in a conference call that the collateral from the $41 billion in securities it had out on loan was invested in "high- quality assets".

Chubb plans to release complete third-quarter results on October 22.