TAKING THE PULSE: Commercial property/casualty insurers take on enough risk insuring their customers against losses from events such as hurricanes and employee injuries, so they don't take much risk in their investment portfolios. That means investment losses haven't been as much of an issue for them as it has been for life insurers.

Still, Moody's changed its outlook for the sector to negative earlier this month, citing "intensified stress on insurers' investment portfolios and financial flexibility arising from capital market turmoil, together with continued cyclical weakening of underwriting, reserve and capital adequacy levels."

A big first quarter question for insurers that sell businesses insurance is how badly the recession is affecting their customers. Lower employee counts will reduce premiums for workers' compensation coverage and shuttered factories could mean less property coverage.

Insurers want to increase rates to cover their costs, but it is uncertain that they can make price increases stick as customers cut costs.

COMPANIES TO WATCH:

Chubb Corp. (CB) - Reports April 23

Wall Street Expectations: Analysts surveyed by Thomson Reuters expect Chubb to report operating earnings of $1.38 per share on revenue of $2.89 billion. Last year, Chubb reported first-quarter operating earnings of $1.65 per share on revenue of $3.49 billion.

Pricing pressure amid the recession could lead to a 3% decline in first-quarter premiums for Chubb, a problem that will hit other insurers too, says Raymond James analyst David O. Lewis, while first quarter storms in parts of the country could put "modest" pressure on Chubb's property business.

Travelers Cos. Inc. (TRV) - Reports April 30

Wall Street Expectations: Analysts polled by Thomson Reuters expect first-quarter operating earnings of $1.31 per share on revenue of $6.125 billion. In 2008, Travelers reported first-quarter per-share operating income of $1.61 on $6.232 billion of revenue.

Key Issues: Travelers, one of the biggest commercial insurers, is in a good position to deal with a weaker economy, said Fox-Pitt, Kelton analyst Gary Ransom. He upgraded Travelers to outperform from in line last month, based on the company's low-risk asset portfolio, reserve redundancies and its continued stock buybacks.

Ace Limited (ACE) - Reports April 28

Wall Street Expectations: Analysts expect Ace to report first-quarter operating earnings of $1.96 per share on revenue of $3.61 billion. Last year, Ace reported first-quarter operating earnings of $2.16 per share on revenue of $3.076 billion.

Ace could pick up business from customers who are looking for an alternative to troubled insurance giant American International Group (AIG), which could help offset generally lower insurance prices overall. It could also benefit from positive reserve developments on lower prior year losses, analysts believe.

A potential hangup for Ace could come from its variable annuity reinsurance business, which backs losses on life insurers' variable annuities. William Blair analyst Mark Lane estimates that losses in this business could cut 10 to 12 cents a share off earnings.

(The Thomson/Reuters estimate and year-earlier net may not be comparable due to one-time items and other adjustments.)

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141; lavonne.kuykendall@dowjones.com