ACE Limited Reports Record Third Quarter 2006 Net Income of $578 Million or $1.73 Per Share.Record Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $652 Million or $1.96 Per Share; P&C Combined Ratio of 85.7% HAMILTON, Bermuda -- ACE Limited (NYSE NYSE See: New York Stock Exchange :ACE) today reported net income for the third quarter ended September 30, 2006 of $578 million or $1.73 per common share after payment of preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , compared with a net loss of $112 million or $(0.43) per share for the same quarter last year. Income (loss) excluding net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. (losses) for the third quarter was $652 million, or $1.96 per share, compared with $(187) million or $(0.70) per share for the same quarter a year ago.(1) In the third quarter of 2006 after-tax catastrophe losses were $5 million or $0.01 per share. The losses from hurricanes Katrina, Rita and Dennis and other catastrophes resulted in an after-tax charge of $742 million for the third quarter of 2005 or $2.56 per share. The P&C combined ratio for the current quarter was 85.7%. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average equity for the quarter was 20.6% [TABLE OMITTED] Net income for the nine months ended September 30, 2006 was $1.6 billion or $4.92 per share, compared with $792 million or $2.63 per share for the nine months of 2005. For the nine months ended September 30, 2006, income excluding net realized gains and cumulative effect(2) was $1.7 billion or $5.13 per share, compared with $711 million or $2.34 per share for the same period of 2005.(1)After-tax net catastrophe losses for the nine months ended September 30, 2006 and 2005 were $10 million and $742 million or $0.03 and $2.57 per share, respectively. The P&C combined ratio for the nine months of 2006 was 87.8%; excluding catastrophe losses, the combined ratio for the nine months of 2005 was 88.4%. Annualized return on equity for the nine month period was 18.4 %.(3) [TABLE OMITTED] Evan Greenberg, President and Chief Executive Officer of ACE Limited, commented: "We had an excellent quarter, with all areas of the company performing well. The positive effect of the lack of catastrophe activity only added to what was already a very good quarter of operating performance. Our P&C combined ratio was 85.7% while return on equity was 20.6%. We had record growth in book value of more than $1 billion. Our organization is in great shape, and we expect to continue to produce excellent results into the future." Third quarter operating highlights were as follows: * P&C net premiums written increased 4% over the prior year quarter. * P&C net premiums earned increased 8% over the prior year quarter. * The P&C combined ratio was 85.7% for the quarter compared with 116.0% in 2005. Excluding catastrophe losses, the P&C combined ratio for the same period in 2005 was 86.5%. * P&C underwriting income Underwriting income For an insurance company, the difference between the premiums earned and the costs of settling claims. increased 198% over the prior year quarter. * Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. amounted to $1.3 billion for the quarter. * Invested assets increased by $1.2 billion from June 30, 2006. * Net losses and loss expenses increased $126 million to $20.4 billion from June 30, 2006. Excluding the impact of the reserves sold to Randall & Quilter quilt n. 1. A coverlet or blanket made of two layers of fabric with a layer of cotton, wool, feathers, or down in between, all stitched firmly together, usually in a decorative crisscross design. 2. Investment Holdings Limited, net losses and loss expenses increased approximately $614 million from June 30, 2006. * Net investment income increased 29% to $414 million over the prior year quarter. * Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased 8% or $1 billion to $13.5 billion from June 30, 2006 and 14% or $1.7 billion from December 31, 2005. * Tangible equity(1) rose to $10.8 billion, an increase of 11% from June 30, 2006. * Debt to total capital ratio decreased to 13.4% from 15.9% at June 30, 2006. * Annualized return on average equity for the quarter was 20.6%.(3) * Book value per share as of September 30, 2006 was $39.74.(4) Details of our financial results for our P&C business segments are available in the financial supplement. Key items include: * Insurance-North American: Net premiums written increased 11% over the prior year quarter. The combined ratio was 87.6%. * Insurance-Overseas General: Net premiums written increased 5% over the prior year quarter. The combined ratio was 82.2%. * Global Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. : Net premiums written decreased 25% over the prior year quarter. The combined ratio was 76.2%. * Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. : Income excluding net realized gains (losses) increased by $39 million to $36 million over the prior year quarter. * Life Insurance and Reinsurance: Net premiums written increased 13% over the prior year quarter. Income excluding net realized gains (losses) increased 38% to $36 million over the prior year quarter. Please refer to the ACE Financial Supplement September 30, 2006, which is posted on the Company's website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure. ACE's website reference (URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. ) is http://media.corporate-ir.net/media_files/irol/10/100907/repo rts/fin_supp_september_30_2006.xls. (Due to the length of this URL, it may be necessary to copy and paste To copy files from one location to another or to copy text and images from one document to another. All modern operating systems and applications have a copy and paste capability that is typically selected from an Edit menu. See cut and paste and Win Copy between windows. this hyperlink into your Internet browser's URL address field.) ACE will host its third quarter 2006, quarter-end earnings conference call and webcast on Wednesday, October 25, 2006 beginning at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 800-289-0572 (within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) or 913-981-5543 (international); passcode 1327941. Please refer to the ACE Limited website in the Investor Information section under Calendar of Events for details. A replay of the call will be available from approximately 11:30 a.m. EDT on Wednesday, October 25, 2006 until Friday, November 24, 2006. To listen to the replay, dial: 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 1327941 (#). The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, a component of the Standard & Poor's 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. in more than 50 countries. Additional information can be found at: www.acelimited.com. [TABLE OMITTED] Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, actual market developments, 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 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. [TABLE OMITTED] [TABLE OMITTED] Ratios exclude life insurance and reinsurance business [TABLE OMITTED] |
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