ACE Limited (NYSE: ACE) today reported net operating income of $158 million for the quarter ended September 30, 2002 compared with a net operating loss of $390 million for the same quarter in 2001. Net operating earnings per share, after deducting preferred dividends, was $0.57 for the current quarter compared with a net operating loss per share of $1.72 for the same quarter last year. Including after tax net realized losses of $205 million, ACE reported a net loss for the quarter of $57 million compared with a net loss of $442 million for the comparable period a year ago. The loss per share, after deducting preferred dividends, was $0.24 for the quarter compared with a loss of $1.95 for the same quarter last year. The book value per share of the company at September 30, 2002 was $24.37 compared with $23.59 at December 31, 2001.
"This quarter and our year to date have been characterized by exceptional premium growth. This has helped produce positive cash flow in excess of $1 billion for the quarter," said Brian Duperreault, Chairman and Chief Executive Officer of ACE Limited. "Operating earnings and unrealized gains from our fixed income portfolio more than offset realized losses this quarter, resulting in an increase in book value per share."
Gross premiums written during the September 30, 2002 quarter increased by 41 percent to $3.5 billion, compared with $2.5 billion for the comparable quarter in 2001. Net premiums written increased by 70 percent to $2.2 billion and net premiums earned increased by 37 percent to $1.9 billion.
Underwriting results improved in the current quarter with a consolidated combined ratio of 97.7 percent compared with 142.5 percent in the prior year quarter. The current quarter includes $90 million after tax losses related to the European floods as previously announced.
Net investment income was $199 million for fiscal 2002 third quarter compared with $192 million for fiscal 2001 third quarter. The average market yield on ACE's portfolio declined to 4.7 percent as compared with 5.2 percent at year-end. Volatile securities markets produced realized losses in our equity and derivatives portfolios but produced offsetting unrealized gains in our fixed income portfolio. Total shareholders' equity rose to $6.4 billion, an increase of 5.5 percent over December 31, 2001.
The financial supplement this quarter includes additional information on the Company's financial guaranty business, reinsurance recoverables, asbestos, and invested assets. This supplement has been posted
here.
ACE Limited (NYSE: ACE) will host a live webcast of its third quarter earnings conference call on Wednesday, October 30, 2002, beginning at 8:30 a.m. EST. The public may access the webcast, available on a listen-only basis, and the new financial supplement at www.acelimited.com. Please refer to our website under "Investor Info, Notices & Events", one half hour before, for further log-in details. Individuals who access the webcast will be asked to identify themselves and their affiliation. A replay of the webcast will be available following the live webcast on Wednesday, October 30, 2002 until Wednesday, November 13, 2002, 11:30 p.m. EST.
The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients. The ACE Group conducts its business on a global basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: www.acelimited.com.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
Any forward-looking statements made in this press release reflect the Company's 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 which may cause actual results to differ materially from those set forth in these statements. For example, the Company's forward-looking statements concerning market fundamentals could be affected by changes in demand, pricing and policy term trends and competition. The Company's forward-looking statements could also be affected by the levels of new and renewal business achieved, market acceptance, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving and settlement processes, the amount and timing of reinsurance recoverables, investment market developments and economic, political, legislative, judicial, regulatory, insurance and reinsurance business conditions, as well as management's response to these factors, and other factors identified in the Company's 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
