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ACE Reports Third Quarter Operating Income Of $688 Million, Combined Ratio Of 92.0% And Operating ROE Of 11.5%; Book Value Up 10.8% And Tangible Book Value Up 12.5% For The Year

(3) The book value amounts reflect the effects of new accounting guidance for deferred acquisition costs that is retroactively applied to periods prior to January 1, 2012. Refer to the Financial Supplement page 1 for further detail.

NM - not meaningful comparison

Cautionary Statement Regarding Forward-Looking Statements :

Forward-looking statements made in this press release, such as those related to company performance and guidance, insurance market conditions and acquisitions and strategic options, reflect our current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the following: competition, pricing and policy term trends, the levels of new and renewal business achieved, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and performance of acquired companies, failure of announced acquisitions to close, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war, and economic, political, regulatory, insurance and reinsurance business conditions, as well as management's response to these factors, and other factors identified in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

(tables to follow)

ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
 
     
September 30 December 31
2012 2011
 
Assets
Investments $ 59,817 $ 55,676
Cash 690 614
Insurance and reinsurance balances receivable 5,288 4,387
Reinsurance recoverable on losses and loss expenses 11,857 12,389
Other assets 15,856   14,255
Total assets $ 93,508   $ 87,321
 
Liabilities
Unpaid losses and loss expenses $ 38,200 $ 37,477
Unearned premiums 7,068 6,334
Other liabilities 21,277   19,178
Total liabilities 66,545   62,989
 
Shareholders' equity
Total shareholders' equity 26,963   24,332
Total liabilities and shareholders' equity $ 93,508   $ 87,321
 
Book value per common share (2) $ 79.36 $ 72.22
 
 
ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
                       
             
 
Three Months Ended Nine Months Ended
September 30 September 30
2012 2011 2012 2011
 
Gross premiums written $ 6,007 $ 5,900 $ 16,447 $ 15,967
Net premiums written 4,716 4,343 12,418 11,742
Net premiums earned 4,665 4,490 11,829 11,556
Losses and loss expenses 3,047 2,745 6,970 7,234
Policy benefits 130 83 379 282
Policy acquisition costs 609 669 1,810 1,840
Administrative expenses 519   520   1,543   1,537  
Underwriting income (2) 360 473 1,127 663
 
Net investment income 533 564 1,614 1,677
Net realized gains (losses) (60 ) (760 ) (194 ) (878 )
Interest expense 63 62 187 187
Other income (expense):
Gains (losses) from separate account assets (2) 14 (39 ) 18 (39 )
Other 3 (50 ) (32 ) (49 )
Income tax expense 147   165   405   382  
Net income (loss) $ 640   $ (39 ) $ 1,941   $ 805  
 
Diluted earnings per share:

Income excluding net realized gains (losses) (2)

$ 2.01 $ 2.20 $ 6.23 $ 4.94
Net income (loss) $ 1.86 $ (0.11 ) $ 5.67 $ 2.36
 
Weighted average diluted shares outstanding 342.9 340.9 342.4 340.9
 
Loss and loss expense ratio 68.9 % 64.9 % 62.6 % 66.8 %
Policy acquisition cost ratio 12.7 % 14.4 % 15.0 % 15.6 %
Administrative expense ratio 10.4 % 10.9 % 12.6 % 12.9 %
Combined ratio 92.0 % 90.2 % 90.2 % 95.3 %
 
 
ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
                       
             
Three Months Ended Nine Months Ended
September 30 September 30
2012 2011 2012 2011
 

Gross Premiums Written

 
Insurance - North American $ 3,345 $ 3,294 $ 8,213 $ 7,966
Insurance - Overseas General 1,841 1,843 5,777 5,649
Global Reinsurance 310 254 921 882
Life 511   509   1,536   1,470  
Total $ 6,007   $ 5,900   $ 16,447   $ 15,967  
 

Net Premiums Written

 
Insurance - North American $ 2,537 $ 2,207 $ 5,690 $ 5,227
Insurance - Overseas General 1,384 1,398 4,387 4,251
Global Reinsurance 307 250 879 847
Life 488   488   1,462   1,417  
Total $ 4,716   $ 4,343   $ 12,418   $ 11,742  
 

Net Premiums Earned

 
Insurance - North American $ 2,472 $ 2,299 $ 5,411 $ 5,249
Insurance - Overseas General 1,432 1,471 4,243 4,164
Global Reinsurance 281 240 748 754
Life 480   480   1,427   1,389  
Total $ 4,665   $ 4,490   $ 11,829   $ 11,556  
 

Income Excluding Net Realized Gains (Losses) (2)

 
Insurance - North American $ 223 $ 290 $ 892 $ 835
Insurance - Overseas General 302 292 748 522
Global Reinsurance 139 145 425 276
Life 87 80 250 236
Corporate (63 ) (56 ) (183 ) (186 )
Total $ 688   $ 751   $ 2,132   $ 1,683  




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