I agree that punishment is NOT the way to go. In addition to the tips others have given, I would consider asking family members about this. It may very well be that someone else in the family has a nervous habit of some kind (though they may not realize it.) The best thing to do, aside from getting professional help, is find out the things that are causing her stress, and to try to control her stress level, or to teach her ways to cope better with stress. Ultimately though, there may be little that can be done to eliminate this completely - but she CAN learn to mange it. It is possible, if the damage/bleeding is bad enough, that some type of behavior modification meds might help, but I would not say that this should be a first course of action to consider.
Things that help:
1. Healthy nutrition and enough rest are very important. If your daughter isn't getting enough vitamins and/or enough rest, these can be factors. Your daughter may need a little extra rest, and be certain that she gets enough calcium in her diet. I have chewed my nails and cuticles for all of my life. Improving my diet really helped. I'm not just talking about taking vitamins, but actually eating fresh veggies, drinking milk, and eating more protein (eggs are an inexpensive, quality source of protein). This is something no doctor ever told me!
2. Physical contact with another person helps! Hug your daughter frequently. Isolation tends to make nervous conditions worse.
3. Your daughter should be able, over time, to learn ways to mentally help herself. Keeping busy with positive hobbies can help - like sports, acting, writing, crafts, etc. Exercise definitely helps!!!!!!
4. The time of year also matters, for me. For some reason, the condition is worse for me in the winter, when my nails are dryer. Getting a manicure helps. Having the fake nails also helped me too, but i also gave them up after a while.
On the downside, it is likely that this is a condition which will plague her for all of her life. It is likely that she will have good times, and bad times. Don't be surpirsd if she has other symptoms over time as well.
5. Give her unconditional love, and don't ever put her down for her condition. Encourage her to share her feelings with you - without you bringing up her condition. Let her be the one to bring it into the discussion. People with nervous conditions tend to hide them for fear of being called weird. As you can see from the number of posts though, these conditions are actually quite common!
6. Last, I hate to say it, but do look to yourself. This is very hard to do. As her mother, you are a BIG influence in her life. I'm not saying her condition is anyone's fault, but If there is a lot of stress in your life, some of that could be rubbing off on your daughter. If you have recently gone through a divorce, or if you frequently yell or use punishment with your daughter, these could be factors. Many parents put things onto their kids with out realizing it. It is much better to praise the things your daughter does well than to criticise the things she does wrong.
I really do hope that your daughter gets better!