NEW YORK (AP) — Insurer Travelers Cos. said yesterday its second-quarter profit dipped nine percent because of a jump in claims paid to cover weather-related losses.

The St. Paul, Minnesota, company, which is a component of the Dow Jones industrial average, also cut the upper end of its full-year earnings outlook because of the weak economy.

Flooding and several severe wind and hail storms during the quarter led to the increase in claims. Catastrophe losses jumped by $239 million before taxes in the second quarter.

Higher claims payments offset a one percent increase in net written premiums, which topped analysts' forecasts.

Travelers' profit fell to $670 million, or $1.35 per share, in the second quarter, from $740 million, or $1.27 per share, during the same quarter last year. Earnings per share rose even though overall profit fell because the company had fewer shares outstanding during the most recent quarter.

Operating income, which excludes investment gains and losses, fell to $690 million, or $1.39 per share. Travelers' operating income was $732 million, or $1.25 per share, during the second quarter last year.

Analysts polled by Thomson Reuters forecast a profit of $1.49 per share for the quarter. Analysts estimates often exclude investment gains and losses for insurance companies because they are not considered a core part of the business.

Net premiums written rose one percent to $5.69 billion from $5.61 billion during the same quarter last year. Analysts were expecting new business to generate $5.57 billion in revenue during the quarter.

Travelers' combined ratio, which measures how much money an insurer pays out in claims and expenses compared to how much it generates from writing new premiums, rose to 95.2 in the quarter, from 93.2 during the year-ago period. The higher ratio means claims and expenses jumped at a faster pace than new insurance premiums written.

Because of ongoing weakness in the economy, Travelers also decided to cut the upper end of its full-year earnings forecast by 10 cents. The insurer said the rate of renewal from commercial customers is not meeting original expectations, which led to the drop in the forecast.