ACE Reports Record Quarterly Operating Income Of $790 Million, Net Income Of $891 Million And P&C Combined Ratio Of 87.9%; Operating Return On Equity Is 12.3%

ACE Limited (NYSE: ACE) today reported net income for the quarter ended June 30, 2013, of $2.59 per share, compared with $0.96 per share for the same quarter last year. (1) Operating income was $2.29 per share, compared with $2.17 per share for the same quarter last year. Book value per share declined 2.3% from March 31, 2013, to $80.26 due to rising interest rates. Tangible book value per share decreased 4.9% to $64.40, primarily due to rising interest rates and the impact of goodwill and intangibles relating to acquisitions closed during the quarter. Operating return on equity for the quarter was 12.3%. The property and casualty (P&C) combined ratio for the quarter was 87.9%.
Second Quarter Summary
(in millions, except per share amounts)
(Unaudited)
             
(Per Share - Diluted)
2013   2012   Change 2013 2012   Change
 
Net income $ 891 $ 328 171.2 % $ 2.59 $ 0.96 169.8 %
Net realized gains (losses), net of tax 101     (415 )   NM   0.30   (1.21 )   NM  
Operating income, net of tax $ 790     $ 743     6.3 % $ 2.29   $ 2.17     5.5 %
 
 

For the six months ended June 30, 2013, net income was $5.36 per share, compared with $3.80 per share for 2012. Operating income was $4.46 per share, compared with $4.22 per share for 2012. Book value decreased $236 million, down 0.9% from December 31, 2012, and tangible book value decreased $656 million, down 2.9%. The P&C combined ratio for the six months ended June 30, 2013, was 88.1%.
Six Months Ended Summary
(in millions, except per share amounts)
(Unaudited)
             

(Per Share – Diluted)
2013   2012   Change 2013   2012   Change
 
Net income $ 1,844   $ 1,301 41.7 %   $ 5.36 $ 3.80   41.1 %
Net realized gains (losses), net of tax 308     (143 )   NM   0.90    

(0.42

)
NM  
Operating income, net of tax $ 1,536       $ 1,444     6.4 %   $ 4.46     $ 4.22     5.7 %
 

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had record earnings in the quarter that were driven, in particular, by excellent current accident year underwriting results and strong investment income. We produced $790 million in after-tax operating income and our operating ROE was 12.3%. Book value declined 2.3% due to the rise in interest rates, which reduced unrealized gains in our investment portfolio. However, future investment income will benefit over time from the rise in interest rates.

If you liked this article you might like

Hartford Financial Remains Source of Takeover Chatter

Jim Cramer Says Kraft Heinz Can Go Much Higher, Likes Chubb

3 Financial Stocks Pushing The Sector Higher

3 Stocks Dragging The Financial Sector Downward

3 Stocks Moving the Financial Sector Upward