CHARLOTTE, N.C._A Barclays Capital analyst recommended investors sell insurer Chubb Corp. and buy Travelers Cos., based on potential future losses at Chubb.

Analyst Jay Gelb said in a research note that Chubb shows no immediate problems with its directors and officer liability insurance, but "given the potential for more D&O losses that could emerge in 2010, Chubb does not appear adequately reserved."

Travelers, on the other hand, could benefit from an estimated $7 billion of excess capital by 2010 as well as redundant loss reserves, Gelb wrote.

D&O insurance is a form of liability insurance payable to the directors and officers of a company, or to the corporation itself, to cover damages or defense costs in the event the individuals are sued for wrongful acts while they were with that company.

Chubb shares are up more than 12 percent after reporting on July 23 that its second-quarter profit rose 17 percent. The increase was partly due to higher rates for commercial and specialty insurance, the company said.

Commercial and personal property insurer Travelers reported that lower investment income and underwriting profit drove its second-quarter earnings down 21 percent. Even so, the company continues to benefit from its size and scale, and has been winning business in recent quarters from weakened rivals such as American International Group Inc.

Shares of Chubb lost 7 cents to $47.75 in afternoon trading Tuesday, while Travelers shares rose 78 cents, or 1.7 percent, to $47.39.