NEW YORK (Bloomberg) - Among property and casualty insurers, the steadiest profits are coming from the customer minnows, not the whales, helping to put more than a dozen companies in play.

Since Liberty Mutual Group Inc. agreed on April 23 to buy Safeco Corp. for $6.2 billion, or a premium of 51 percent, the shares of some of the industry's smallest companies have outperformed those of their bigger competitors, signalling potential acquisitions.

Hanover Insurance Group Inc., HCC Insurance Holdings Inc. and Navigators Group Inc. have posted share gains since the Safeco deal was announced, compared with the 12 percent drop of the 91-stock Bloomberg US Insurance Index. Travelers Cos., the second-biggest US business insurer, and Hartford Financial Services Group Inc. both say they may seek acquisitions.

"They're looking at these small accounts and seeing how profitable they are, and they want a piece of the pie," said Robert Farnam, an analyst at KBW Inc. in Hartford, Connecticut. "Acquiring a small local carrier is probably one of the best ways to do it."

Insurers have announced 27 takeovers of US property and casualty companies so far this year for a combined value of $13.3 billion, the most in at least a decade, data compiled by Bloomberg show. In most cases, acquirers were hoping to insulate profits by adding insurers specialising in bars, bowling alleys and hunting lodges - all part of a small-business market worth $95 billion in annual premiums.

Travelers of St. Paul, Minnesota, got higher premiums during each of the past six quarters from existing small-business customers, a group including restaurants and condominiums with an average annual premium of $6,000. Revenue from mid-size commercial clients, like hotels and manufacturers, declined for the last five quarters.

The industry's biggest customers won rate reductions for at least 17 straight quarters, the Washington-based Council of Insurance Agents & Brokers reported. Rates on renewals of the biggest accounts were down 16 percent in the second quarter from the first three months of the year, the group said. By contrast, prices fell 9.7 percent for the smallest clients.

Recent takeovers include Philadelphia Consolidated Holding Corp., which Japan's Tokio Marine Holdings Inc. agreed to buy in July for about $4.7 billion, more than 2.5 times book value, to gain sales insuring apartments, auto fleets and zoos in North America. QBE Insurance Group Ltd., Australia's largest property and casualty carrier, bought North Pointe Holdings Corp. of Southfield, Michigan, in May to expand coverage of bowling alleys.

KBW analysts, including Farnam, say Hanover Insurance of Worcester, Massachusetts, Houston-based HCC and Navigators Group in New York are among at least a dozen potential targets. The research team correctly identified Philadelphia Consolidated as an acquisition candidate in a June 10 note and also predicted the takeover of Darwin Professional Underwriters Inc. of Farmington, Connecticut, which is being bought by Bermuda-based Allied World Assurance Co.