ACE's Earnings Get Clubbed

Investment write-downs and losses cause ACE's profit to dwindle.
Author:
Publish date:

Once these most recent quarterly results are finalized, they will be run through TheStreet.com Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit TheStreet.com Ratings Screener.

On Feb. 3, 2009,

ACE

(ACE)

reported that its Q4 FY08 earnings plunged 96.4%, hurt by investment write-downs and other-than-temporary impairment losses. Net income available to shareholders declined to $20.00 million or $0.06 per share from $560.00 million or $1.69 per share in Q4 FY07. Excluding one-time items, the company earned $624.00 million or $1.87 per share, which beat the most recent consensus estimate of $1.80 per share.

Gross premiums written rose 4.2% to $4.32 billion from $4.14 billion a year ago. Furthermore, net premiums written grew 8.0% to $3.05 billion, while net premiums earned edged up 5.5% to $3.23 billion. Net investment income advanced 3.4% year over year to $521.00 million from $504.00 million. On the flip side, net realized investment losses widened to $644.00 million from $66.00 million, hurt by mark-to-market pricing due to continued widening of credit spreads and the decline in global equity markets.

Net premiums written from the Insurance-North American segment fell 5.0% to $1.30 billion, while its net premium earned inched down 2.9% to $1.38 billion. However, Insurance-Overseas General net premiums written spiked 7.0% to $1.25 billion, while the segment's net premium earned ascended 1.7% to $1.25 billion. Moreover, Global Reinsurance's net premiums written plunged 27.6% to $126.00 million, whereas its net premium earned shrunk 23.1% to $240.00 million. Net premiums written from the Life segment more than tripled to $371.00 million, while its net premium earned swelled more the three-fold to $359.00 million.

The combined ratio for the property and casualty business was down to 86.90% from 88.10%, while total invested assets plunged 4.9% to $39.72 billion as of Dec. 31, 2008.

For FY08, ACE's net income declined 53.7% to $1.17 billion or $3.53 per share from $2.53 billion or $7.66 per share, while net premium earned augmented 7.4% to $13.20 billion from $12.30 billion in FY07.

A detailed report covering this quarterly release is now available. To purchase the report, click here.