Allied World Assurance Co., the seller of aviation and environmental insurance, fell the most since February as second-quarter profit missed analysts’ estimates amid a decline in sales.

Allied plunged 4.3 percent to $37.04 at 11:06 a.m. in New York. The stock has dropped 1.5 percent this year, compared with the 7.5 percent increase of the Russell 1000 Index.

Operating income was 76 cents a share, missing by 8 cents the average estimate of 9 analysts surveyed by Bloomberg. Net policy sales fell 4.7 percent to $553.9 million as a decline at the reinsurance unit overwhelmed gains from the U.S. and international insurance segments, the Zug, Switzerland-based company said in a statement late yesterday.

“In reinsurance they’ve been shrinking their exposure to catastrophes,” Matt Carletti, an analyst with JMP Securities LLC said in a phone interview. “That segment drove the miss.”

Reinsurers have been forced to lower prices or settle for lower sales amid competition from catastrophe bond investors willing to shoulder weather-related risks. Everest Re Group Ltd. also reported results late yesterday that missed analysts’ estimates, and the Bermuda-based company dropped 2.2 percent.

Allied World’s second-quarter net income was $151.9 million, compared with a loss of $1.9 million a year earlier that was driven by investment results.