ACE Limited Reports Third Quarter Earnings.Business Editors HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda--(BUSINESS WIRE)--Oct. 30, 2001 ACE Limited (NYSE NYSE See: New York Stock Exchange :ACE) today reported a net 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) of $390.1 million for the quarter ended September September: see month. 30, 2001, or a loss, after deducting preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , of $1.72 per share, compared with income excluding net realized gains (losses) of $150.6 million for the quarter ended September 30, 2000, or earnings per share of $0.62. The net loss for the quarter ended September 30, 2001 was $442.6 million compared with net income of $140.8 million in 2000 and the loss per share, after deducting preferred dividends, was $1.95 for the current quarter compared with earnings per share of $0.58 for the same quarter last year. Earnings (loss) per share calculations above are based on the weighted average number of shares calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FAS 128 on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Under FAS 128, the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. shares from assumed conversions are not included in computing computing - computer diluted loss per share amounts. The fully diluted book value per share of the Company at September 30, 2001 was $22.10. Certain amounts noted above have been restated from the third quarter earnings highlights issued on October October: see month. 25, 2001. The Company's third quarter results were reduced by $558.8 million after tax ($636.9 million on a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta basis) as a result of the September 11, 2001 tragedy. Excluding the impact of this event, the Company's income excluding net realized gains (losses) for the quarter ended September 30, 2001 would have been $168.7 million and earnings per share excluding net realized gains (losses), after deducting preferred dividends, would have been $0.68 per share on a diluted basis. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Duperreault, chairman and chief executive officer of ACE Limited, commented: "The tragedy of September 11 has materially altered the business of insurance. It has created uncertainty and significantly increased insurance demand. With our global platform and increased capital, ACE is well positioned to meet this demand." Gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. during the quarter increased by 25 percent to $2.5 billion, compared with $2 billion for the comparable quarter last year. Net premiums written during the quarter increased by 9 percent to $1.3 billion compared with $1.2 billion for the same quarter last year. Net premiums earned during the quarter increased to $1.4 billion from $1.2 billion for the same quarter last year. For the first nine months of fiscal 2001, gross premiums written increased by 26 percent to $7.5 billion compared with the same period last year and net premiums written increased by 17 percent to $4.5 billion compared with the first nine months of fiscal 2000. Net premiums earned for the nine months ended September 30, 2001 were $4.2 billion compared with $3.4 billion for the same period last year. Net investment income, which excludes net realized gains (losses) on investments, was $192.9 million for the fiscal 2001 third quarter, compared with $197.6 million for the same quarter last year. For the first nine months of fiscal 2001, net investment income, was $593.6 million compared with $561.5 million for the same period last year. During the 2001 third quarter, ACE had net realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. , net of tax, of $52.5 million, compared with net realized losses of $9.8 million for the same quarter last year. For the nine months ended September 30, 2001, net realized losses, net of tax, were $54.7 million, compared with net realized gains of $11.5 million for the nine months ended September 30, 2000. On October 25, 2001, ACE announced that it agreed to sell in a public offering 28.6 million ordinary shares at a price per share of $35.00, resulting in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $980 million. ACE also granted the underwriters of the offering an option to purchase an additional 4.29 million ordinary shares at the same price to cover over-allotments. This option was exercised on Monday Monday: see week. , October 29, 2001 and will result in additional proceeds of $147 million. The ACE Group of Companies provides insurance and 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. for a diverse group of clients. The ACE Group conducts its business on a global 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 nearly 50 countries. Additional information can be found at: http://www.acelimited.com. Application of 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. of the Private Securities 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. Reform Act of 1995: Any 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. 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 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. Among other things, the impact of the recent tragedy on the Company's financial results will depend on the number of insureds and reinsureds affected by the disaster, the amount and timing of losses actually incurred and reported by insureds and reinsureds and governmental responses to the tragedy. Availability of capacity to clients will depend on opportunities presented and the application of underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . Also, competition in the industry, levels of new and renewal business achieved, market acceptance, the frequency of unpredictable catastrophic events, actual loss experience and economic, market, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , insurance and reinsurance business conditions and other factors identified in the Company's filings with the Securities and Exchange Commission could affect the forward-looking statements contained in this press release. 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. publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. -0-
ACE Limited Summary Consolidated
Financial Data (in thousands of U.S. dollars, except share and per
share data)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
2001 2000 2001 2000
---- ---- ---- ----
Operations Data:
Gross premiums
written $2,502,371 $1,999,816 $7,466,670 $5,946,843
Net premiums written 1,305,067 1,196,804 4,510,830 3,867,711
Net premiums earned 1,399,429 1,174,782 4,153,732 3,447,424
Losses and loss
expenses 1,571,333 772,887 3,506,272 2,256,481
Policy acquisition
costs 204,666 168,258 558,996 482,628
Administrative expenses 207,389 177,912 601,415 554,784
---------- ---------- ---------- ----------
Underwriting income
(loss) (583,959) 55,725 (512,951) 153,531
Net investment income 192,909 197,584 593,606 561,548
Amortization of goodwill 19,912 19,919 59,664 58,889
Interest expense 49,130 55,408 153,094 166,544
Income tax expense
(benefit) (69,978) 27,429 (21,254) 71,981
---------- ---------- ---------- ----------
Income (loss)
excluding
net realized gains
(losses), non-recurring
expenses and cumulative
effect of adopting a new
accounting standard (390,114) 150,553 (110,849) 417,665
Non-recurring
expenses (1) - - (4,461) -
---------- ---------- ---------- ----------
Income (loss) excluding
net realized gains
(losses) and cumulative
effect (390,114) 150,553 (115,310) 417,665
Net realized gains
(losses) (1) (52,476) (9,800) (54,699) 11,529
---------- ---------- ---------- ----------
Income (loss) excluding
cumulative effect (442,590) 140,753 (170,009) 429,194
Cumulative effect of
adopting a new
accounting
standard (1) - - (22,670) -
---------- ---------- ---------- ----------
Net income (loss) $(442,590) $140,753 $(192,679) $429,194
========== ========== ========== ==========
Diluted earnings (loss) per share: (2)
Earnings (loss) per share
excluding net realized gains
(losses), non-recurring
expenses and cumulative
effect of adopting a new
accounting standard $(1.72) $0.62 $(0.56) $1.83
Earnings (loss) per share
excluding net realized gains
(losses) and cumulative
effect of adopting a
new accounting standard $(1.72) $0.62 $(0.58) $1.83
Earnings (loss) per share
excluding cumulative effect
of adopting a new
accounting standard $(1.95) $0.58 $(0.82) $1.88
Earnings (loss) per
share $(1.95) $0.58 $(0.92) $1.88
Weighted average shares
outstanding 230,610,425 231,385,699 231,390,682 222,047,554
Earnings (loss) per
share based on
weighted average
shares outstanding
and assumed conversions(2)
Earnings (loss) per
share excluding net
realized gains
(losses), non-recurring
expenses and cumulative
effect of adopting a new
accounting standard $(1.66) $0.62 $(0.54) $1.83
Earnings (loss) per share
excluding net realized
gains (losses) and
cumulative effect of
adopting a new accounting
standard $(1.66) $0.62 $(0.56) $1.83
Earnings (loss) per share
excluding cumulative effect
of adopting a new
accounting standard $(1.88) $0.58 $(0.79) $1.88
Earnings (loss) per share $(1.88) $0.58 $(0.88) $1.88
Weighted average shares
outstanding 238,980,848 231,385,699 240,898,738 222,047,554
(1) Shown net of income tax
(2)Detailed EPS information provided on page 15 of this release.
----------------------------------------------------------------------
ACE Limited
Consolidated Supplementary Segment Information
(in millions of U.S. dollars)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
2001 2000 2001 2000
---- ---- ---- ----
Gross Premiums Written
----------------------
ACE Bermuda $ 321 $ 200 $ 895 $ 511
ACE Global Markets 220 239 871 753
ACE Global Reinsurance 102 31 367 178
ACE USA 1,308 975 3,293 2,662
ACE International 514 497 1,726 1,554
ACE Financial Services 37 58 315 289
----- ----- ----- -----
Total $2,502 $2,000 $7,467 $5,947
----- ----- ----- -----
Net Premiums Written
--------------------
ACE Bermuda $ 180 $ 182 $ 720 $ 446
ACE Global Markets 86 177 517 551
ACE Global Reinsurance 76 13 327 146
ACE USA 586 450 1,506 1,370
ACE International 342 325 1,134 1,080
ACE Financial Services 35 50 307 274
----- ----- ----- -----
Total $1,305 $1,197 $4,511 $3,867
----- ----- ----- -----
Net Premiums Earned
-------------------
ACE Bermuda $ 281 $ 170 $ 782 $ 356
ACE Global Markets 112 174 459 455
ACE Global Reinsurance 103 38 248 96
ACE USA 515 411 1,335 1,256
ACE International 344 339 1,063 1,037
ACE Financial Services 44 43 267 247
----- ----- ----- -----
Total $1,399 $1,175 $4,154 $3,447
----- ----- ----- -----
----------------------------------------------------------------------
ACE Limited
Summary Consolidated Financial Data
(in thousands of U.S. dollars, except per share data)
----------------------------------------------------------------------
September 30, December 31,
2001 2000
------------- ------------
Balance Sheet Data:
Assets
Fixed maturities available for sale,
at fair value (amortized cost
$11,051,756 and $10,640,937) $11,375,713 $10,721,309
Equity securities, at fair value
(cost $525,325 and $495,049) 427,929 532,046
Short-term investments, at fair value
(amortized cost $1,439,235 and
$1,369,784) 1,439,235 1,369,784
Other investments, at fair value
(cost $568,745 and $518,130) 594,923 531,116
Cash 754,588 608,069
------------- ------------
Total investments and cash $14,592,388 $13,762,324
Insurance and reinsurance balances
receivable 2,456,780 2,095,573
Accounts and notes receivable 242,532 388,996
Reinsurance recoverable 10,701,733 8,994,940
Deferred policy acquisition costs 680,642 572,757
Goodwill 2,790,986 2,846,709
Deferred tax assets 1,178,418 1,144,261
Other assets 2,265,796 1,883,966
------------- ------------
Total assets $34,909,275 $31,689,526
============= ============
Liabilities
Unpaid losses and loss expenses $19,883,757 $17,388,394
Unearned premiums 3,777,915 3,035,288
Insurance and reinsurance balances
payable 1,563,766 1,319,091
Contract holder deposit funds 106,460 139,056
Accounts payable, accrued expenses and
other liabilities 1,497,648 1,412,699
Short-term debt 451,470 364,509
Long-term debt 1,424,429 1,424,228
Trust preferred securities 875,000 875,000
------------- ------------
Total liabilities $29,580,445 $25,958,265
============= ============
Commitments and contingencies
Mezzanine equity $ 311,050 $ 311,050
------------- ------------
Shareholders' equity
Ordinary shares ($0.041666667 par
value, 300,000,000 shares
authorized; 226,390,282 and
232,346,579 shares issued
and outstanding) $ 9,433 $ 9,681
Additional paid-in capital 2,575,080 2,637,085
Unearned stock grant compensation (40,129) (29,642)
Retained earnings 2,320,704 2,733,633
Accumulated other comprehensive income 152,692 69,454
------------- ------------
Total shareholders' equity $ 5,017,780 $ 5,420,211
Total liabilities, mezzanine
equity and shareholders' equity $34,909,275 $31,689,526
============= ============
----------------------------------------------------------------------
ACE Limited
Supplemental Information by Segment
Three months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE (1) ACE (2) ACE
ACE Global Global ACE Inter-
Bermuda Markets Reinsurance USA national
--------- -------- ----------- ---------- --------
Operations Data:
Gross premiums
written $ 321,162 $219,474 $70,185 $1,308,049 $514,071
Net premiums
written 180,289 86,098 43,645 585,967 341,953
Net premiums
earned 281,334 112,412 70,293 515,233 344,091
Losses and loss
expenses 478,996 256,787 130,612 426,518 230,926
Policy
acquisition
costs 5,026 55,470 12,795 55,146 66,296
Administrative
expenses 11,798 18,158 10,467 66,625 68,445
--------- -------- ----------- ---------- --------
Underwriting
income (214,486) (218,003) (83,581) (33,056) (21,576)
Net investment
income 35,882 8,288 15,728 84,541 20,545
Amortization of
goodwill (225) 958 3,503 135 -
Interest expense 859 653 - 8,508 -
Income tax
expense
(benefit) 697 (74,819) - 14,523 3,102
--------- -------- ----------- ---------- --------
Income (loss)
excluding net
realized gains
(losses) (179,935) (136,507) (71,356) 28,319 (4,133)
Net realized
gains
(losses)(4) (2,602) 2,808 (5,003) (3,944) 2,214
--------- -------- ----------- ---------- --------
Net income
(loss) $(182,537) $(133,699) $( 76,359) $ 24,375 $( 1,919)
========= ======== =========== ========== ========
Losses and loss
expense ratio 170.2% 228.4% 185.8% 82.8% 67.1%
Policy
acquisition
cost ratio 1.8% 49.3% 18.2% 10.7% 19.3%
Administrative
expense ratio 4.2% 16.2% 14.9% 12.9% 19.9%
Combined ratio 176.2% 293.9% 218.9% 106.4% 106.3%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Three months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE
ACE Consol- Global ACE
Financial idated Life Re- Consol-
Services Other(3) P&C insurance idated
--------- -------- ---------- ---------- ----------
Operations Data:
Gross premiums
written $ 37,254 $ - $2,470,195 $32,176 $2,502,371
Net premiums
written 34,939 - 1,272,891 32,176 1,305,067
Net premiums
earned 43,890 - 1,367,253 32,176 1,399,429
Losses and loss
expenses 17,788 - 1,541,627 29,706 1,571,333
Policy
acquisition
costs 9,374 - 204,107 559 204,666
Administrative
expenses 8,265 22,181 205,939 1,450 207,389
--------- -------- ---------- ---------- ----------
Underwriting
income 8,463 (22,181) (584,420) 461 (583,959)
Net investment
income 25,845 1,961 192,790 119 192,909
Amortization of
goodwill 1,051 14,490 19,912 - 19,912
Interest expense 3,840 35,270 49,130 - 49,130
Income tax
expense
(benefit) 5,516 (18,997) (69,978) - (69,978)
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses) 23,901 (50,983) (390,694) 580 (390,114)
Net realized
gains
(losses)(4) (20,884) (25,065) (52,476) - (52,476)
-------- -------- ---------- ---------- ----------
Net income
(loss) $ 3,017 $(76,048) $(443,170)$ 580 $(442,590)
========= ======== ========== ========== ==========
Losses and loss
expense ratio 40.5% 112.7%
Policy
acquisition
cost ratio 21.4% 14.9%
Administrative
expense ratio 18.8% 15.1%
Combined ratio 80.7% 142.7%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Impact of September 11, 2001 tragedy (a)
Three months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE ACE
ACE ACE Global Global ACE Inter- ACE
Bermuda Markets Reinsurance USA national Consolidated
------- ------- ----------- --- -------- ------------
Operations Data:
Gross premiums
written $142,426 $(20,691) $ - $ - $ - $121,735
Net premiums
written 138,676 (66,292) 1,768 (18,124) (4,500) 51,528
Net premiums
earned 100,092 (66,292) 2,892 (18,124) (4,500) 14,068
Losses and
loss
expenses 341,785 140,212 122,017 28,178 18,300 650,492
Policy
acquisition
costs - - 502 - - 502
Administrative
expenses - - - - - -
------- ------- ------- ------ ------ -------
Underwriting
income (241,693) (206,504) (119,627) (46,302) (22,800) (636,926)
Net investment
income - - - - - -
Amortization of
goodwill - - - - - -
Interest expense - - - - - -
Income tax
expense
(benefit) - (61,951) - (16,206) - (78,157)
------- ------- ------- ------ ------ -------
-
Net income
(loss) $(241,693) $(144,553) $(119,627) $(30,096)$(22,800) $(558,769)
======= ======= ======= ====== ====== =======
(a) The analysis of the impact of the September 11, 2001 tragedy
includes the effects of the intercompany reinsurance transactions.
ACE Limited
Supplemental Information by Segment
Excluding Impact of September 11, 2001 tragedy
Three months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE (1) ACE (2) ACE
ACE Global Global ACE Inter-
Bermuda Markets Reinsurance USA national
--------- -------- ----------- ---------- --------
Operations Data
by Segment:
Gross premiums
written $178,736 $240,165 $70,185 $1,308,049 $514,071
Net premiums
written 41,613 152,390 41,877 604,091 346,453
Net premiums
earned 181,242 178,704 67,401 533,357 348,591
Losses and loss
expenses 137,211 116,575 8,595 398,340 212,626
Policy
acquisition
costs 5,026 55,470 12,293 55,146 66,296
Administrative
expenses 11,798 18,158 10,467 66,625 68,445
--------- -------- ----------- ---------- --------
Underwriting
income (loss) 27,207 (11,499) 36,046 13,246 1,224
Net investment
income 35,882 8,288 15,728 84,541 20,545
Amortization of
goodwill (225) 958 3,503 135 -
Interest expense 859 653 - 8,508 -
Income tax
expense
(benefit) 697 (12,868) - 30,729 3,102
--------- -------- ----------- ---------- --------
Income (loss)
excluding net
realized gains
(losses) 61,758 8,046 48,271 58,415 18,667
Net realized
gains
(losses)(4) (2,602) 2,808 (5,003) (3,944) 2,214
--------- -------- ----------- ---------- --------
Net income
(loss) $ 59,156 $ 10,854 $ 43,268 $ 54,471 $ 20,881
========= ======== =========== ========== ========
Losses and loss
expense ratio 75.7% 65.2% 12.8% 74.7% 61.0%
Policy
acquisition
cost ratio 2.8% 31.0% 18.2% 10.3% 19.0%
Administrative
expense ratio 6.5% 10.2% 15.5% 12.5% 19.6%
Combined ratio 85.0% 106.4% 46.5% 97.5% 99.6%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Excluding Impact of September 11, 2001 tragedy
Three months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE
ACE Consol- Global ACE
Financial idated Life Re- Consol-
Services Other(3) P&C insurance idated
--------- -------- ---------- ---------- ----------
Operations Data
by Segment:
Gross premiums
written $ 37,254 $ - $2,348,460 $ 32,176 $2,380,636
Net premiums
written 34,939 - 1,221,363 32,176 1,253,539
Net premiums
earned 43,890 - 1,353,185 32,176 1,385,361
Losses and loss
expenses 17,788 - 891,135 29,706 920,841
Policy
acquisition
costs 9,374 - 203,605 559 204,164
Administrative
expenses 8,265 22,181 205,939 1,450 207,389
--------- -------- ---------- ---------- ----------
Underwriting
income (loss) 8,463 (22,181) 52,506 461 52,967
Net investment
income 25,845 1,961 192,790 119 192,909
Amortization of
goodwill 1,051 14,490 19,912 - 19,912
Interest expense 3,840 35,270 49,130 - 49,130
Income tax
expense
(benefit) 5,516 (18,997) 8,179 - 8,179
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses) 23,901 (50,983) 168,075 580 168,655
Net realized
gains
(losses)(4) (20,884) (25,065) (52,476) - (52,476)
--------- -------- ---------- ---------- ----------
Net income
(loss) $ 3,017 $(76,048) $ 115,599 $ 580 $ 116,179
========= ======== ========== ========== ==========
Losses and loss
expense ratio 40.5% 65.9%
Policy
acquisition
cost ratio 21.4% 15.0%
Administrative
expense ratio 18.8% 15.2%
Combined ratio 80.7% 96.1%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Three months ended September 30, 2000
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE
ACE ACE Global Global ACE
Bermuda Markets Reinsurance USA
------- ------- ----------- ---
Operations Data
by Segment:
Gross premiums
written $199,741 $239,484 $30,750 $974,862
Net premiums
written 181,573 176,672 12,811 450,518
Net premiums earned 170,292 174,266 37,707 410,472
Losses and loss
expenses 132,701 102,503 5,813 307,692
Policy acquisition
costs 7,565 44,844 6,180 40,430
Administrative expenses 7,494 18,499 2,957 58,631
------ ------ ------ ------
Underwriting income
(loss) 22,532 8,420 22,757 3,719
Net investment income 38,906 7,932 15,056 89,599
Amortization of goodwill (225) 965 3,503 135
Interest expense 908 1,897 - 11,404
Income tax expense
(benefit) 655 5,623 - 26,238
------ ------ ------ ------
Income (loss)
excluding net
realized gains
(losses) 60,100 7,867 34,310 55,541
Net realized gains
(losses)(2) 7,135 (1,245) (12,433) (5,989)
------ ------ ------ ------
Net income (loss) $67,235 $6,622 $21,877 $49,552
====== ====== ====== ======
Losses and loss
expense ratio 77.9% 58.8% 15.4% 75.0%
Policy acquisition
cost ratio 4.5% 25.7% 16.4% 9.8%
Administrative expense
ratio 4.4% 10.6% 7.9% 14.3%
Combined ratio 86.8% 95.1% 39.7% 99.1%
ACE ACE
Inter- Financial ACE
national Services Other(1) Consolidated
-------- -------- ----- ------------
Operations Data by Segment:
Gross premiums written $496,953 $58,026 $ - $1,999,816
Net premiums written 324,779 50,451 - 1,196,804
Net premiums earned 339,101 42,944 - 1,174,782
Losses and loss expenses 205,976 18,202 - 772,887
Policy acquisition costs 59,339 9,900 - 168,258
Administrative expenses 68,552 7,665 14,114 177,912
-------- -------- -------- --------
Underwriting income (loss) 5,234 7,177 (14,114) 55,725
Net investment income 24,612 24,168 (2,689) 197,584
Amortization of goodwill - 1,051 14,490 19,919
Interest expense - 3,378 37,821 55,408
Income tax expense (benefit) 4,400 6,403 (15,890) 27,429
-------- -------- -------- --------
Income (loss) excluding net
realized gains (losses) 25,446 20,513 (53,224) 150,553
Net realized gains
(losses)(2) 492 2,030 210 (9,800)
-------- -------- -------- --------
Net income (loss) $25,938 $22,543 $(53,014) $140,753
======== ======== ======== ========
Losses and loss expense ratio 60.7% 42.4% 65.8%
Policy acquisition cost ratio 17.5% 23.1% 14.3%
Administrative expense ratio 20.3% 17.8% 15.1%
Combined ratio 98.5% 83.3% 95.2%
----------------------------------------------------------------------
(1) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations.
(2) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Nine months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE (1) ACE (2) ACE
ACE Global Global Re- ACE Inter-
Bermuda Markets insurance USA national
--------- -------- ---------- ---------- ----------
Operations Data:
Gross premiums
written $894,631 $870,847 $304,195 $3,293,341 $1,725,948
Net premiums
written 720,109 516,781 264,341 1,505,970 1,133,864
Net premiums
earned 782,206 458,615 184,894 1,334,846 1,063,467
Losses and loss
expenses 933,967 455,113 186,884 1,011,216 674,048
Policy
acquisition
costs 14,872 158,157 32,822 134,464 186,455
Administrative
expenses 28,568 52,716 18,943 209,702 197,126
--------- -------- ---------- ---------- ----------
Underwriting
income (195,201) (207,371) (53,755) (20,536) 5,838
Net investment
income 113,728 28,575 47,478 256,265 64,291
Amortization of
goodwill (675) 2,803 10,508 405 -
Interest expense 888 2,078 - 25,856 -
Income tax
expense
(benefit) 2,046 (65,384) - 66,856 15,733
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses),
non-recurring
expenses and
cumulative
effect (83,732) (118,293) (16,785) 142,612 54,396
Non-recurring
expenses (4) - (4,461) - - -
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized
gains (losses)
and cumulative
effect (83,732) (122,754) (16,785) 142,612 54,396
Net realized
gains
(losses)(4) 10,773 5,838 (23,572) (21,422) 977
--------- -------- ---------- ---------- ----------
Income (loss)
excluding
cumulative
effect of
adopting a new
accounting
standard (72,959) (116,916) (40,357) 121,190 55,373
Cumulative
effect of
adopting a new
accounting
standard (4) - 510 470 (50) -
--------- -------- ---------- ---------- ----------
Net income
(loss) $ (72,959)$(116,406) $ (39,887) $ 121,140 $ 55,373
========= ======== ========== ========== ==========
Losses and loss
expense ratio 119.4% 99.2% 101.1% 75.7% 63.4%
Policy
acquisition
cost ratio 1.9% 34.5% 17.8% 10.1% 17.5%
Administrative
expense ratio 3.7% 11.5% 10.2% 15.7% 18.5%
Combined ratio 125.0% 145.2% 129.1% 101.5% 99.4%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Nine months ended September 30, 2001
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE
ACE Consol- Global ACE
Financial idated Life Re- Consol-
Services Other(3) P&C insurance idated
--------- -------- ---------- ---------- ----------
Operations Data:
Gross premiums
written $314,553 $ - $7,403,515 $ 63,155 $7,466,670
Net premiums
written 306,610 - 4,447,675 63,155 4,510,830
Net premiums
earned 266,549 - 4,090,577 63,155 4,153,732
Losses and loss
expenses 186,533 - 3,447,761 58,511 3,506,272
Policy
acquisition
costs 30,492 - 557,262 1,734 558,996
Administrative
expenses 27,079 64,682 598,816 2,599 601,415
--------- -------- ---------- ---------- ----------
Underwriting
income 22,445 (64,682) (513,262) 311 (512,951)
Net investment
income 75,657 7,158 593,152 454 593,606
Amortization of
goodwill 3,153 43,470 59,664 - 59,664
Interest expense 10,486 113,786 153,094 - 153,094
Income tax
expense
(benefit) 15,199 ( 55,704) (21,254) - ( 21,254)
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses),
non-recurring
expenses and
cumulative
effect 69,264 (159,076) (111,614) 765 (110,849)
Non-recurring
expenses (4) - - (4,461) - (4,461)
--------- -------- ---------- ---------- ----------
Income (loss)
excluding net
realized
gains (losses)
and cumulative
effect 69,264 (159,076) (116,075) 765 (115,310)
Net realized
gains
(losses)(4) (2,228) (25,065) (54,699) - (54,699)
--------- -------- ---------- ---------- ----------
Income (loss)
excluding
cumulative
effect of
adopting a new
accounting
standard 67,036 (184,141) (170,774) 765 (170,009)
Cumulative
effect of
adopting a new
accounting
standard (4) (23,600) - (22,670) - (22,670)
--------- -------- ---------- ---------- ----------
Net income
(loss) $ 43,436 $(184,141) $(193,444) $ 765 $ (192,679)
========= ======== ========== ========== ==========
Losses and loss
expense ratio 70.0% 84.3%
Policy
acquisition
cost ratio 11.4% 13.6%
Administrative
expense ratio 10.2% 14.6%
Combined ratio 91.6% 112.5%
(1) Losses and loss expenses in ACE Global Market includes $17
million of incurred losses in respect of the RGB syndicate that is in
run-off.
(2) ACE Global Reinsurance segment includes both property &
casualty reinsurance business and life reinsurance business. These two
distinct areas have been shown separately in this analysis.
(3) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(4) Shown net of income tax.
ACE Limited
Supplemental Information by Segment
Nine months ended September 30, 2000
(in thousands of U.S. dollars)
----------------------------------------------------------------------
ACE
ACE ACE Global Global ACE
Bermuda Markets Reinsurance USA
------- ------- ----------- ---
Operations Data by
Segment:
Gross premiums written $510,788 $752,791 $178,223 $2,662,542
Net premiums written 446,297 551,140 146,265 1,369,785
Net premiums earned 356,164 454,599 96,062 1,256,042
Losses and loss expenses 265,002 258,271 17,474 938,783
Policy acquisition costs 14,648 119,577 17,877 118,498
Administrative expenses 22,278 54,069 7,806 188,552
-------- -------- -------- --------
Underwriting income (loss) 54,236 22,682 52,905 10,209
Net investment income 111,240 23,420 44,839 251,542
Amortization of goodwill (658) 2,990 10,508 405
Income tax expense
(benefit) 1,920 11,069 (173) 72,991
-------- -------- -------- --------
Income (loss) excluding
net realized gains
(losses) 162,616 27,963 87,409 160,346
Net realized gains
(losses)(2) 31,432 (2,193) (20,378) (16,836)
-------- -------- -------- --------
Net income (loss) $194,048 $25,770 $67,031 $143,510
======== ======== ======== ========
Losses and loss expense
ratio 74.4% 56.8% 18.2% 74.8%
Policy acquisition cost
ratio 4.1% 26.3% 18.6% 9.4%
Administrative expense
ratio 6.3% 11.9% 8.2% 15.0%
Combined ratio 84.8% 95.0% 45.0% 99.2%
(1) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(2) Shown net of income tax
ACE ACE
Inter- Financial ACE
national Services Other(1) Consolidated
-------- -------- ----- ------------
Operations Data by
Segment:
Gross premiums written $1,553,853 $288,646 $ - $5,946,843
Net premiums written 1,080,317 273,907 - 3,867,711
Net premiums earned 1,037,411 247,146 - 3,447,424
Losses and loss expenses 613,942 163,009 - 2,256,481
Policy acquisition costs 173,462 38,566 - 482,628
Administrative expenses 211,589 23,705 46,785 554,784
---------- --------- -------- ----------
Underwriting income (loss) 38,418 21,866 (46,785) 153,531
Net investment income 69,498 71,002 (9,993) 561,548
Amortization of goodwill - 3,154 42,490 58,889
Interest expense - 10,016 122,841 166,544
Income tax expense
(benefit) 19,235 15,664 (48,725) 71,981
---------- --------- -------- ----------
Income (loss) excluding net
realized gains (losses) 88,681 64,034 (173,384) 417,665
Net realized gains
(losses) (2) 19,779 1,566 (1,841) 11,529
---------- --------- -------- ----------
Net income (loss) $108,460 $65,600 $(175,225) $429,194
========== ========= ======== ==========
Losses and loss expense
ratio 59.2% 66.0% 65.5%
Policy acquisition cost
ratio 16.7% 15.6% 14.0%
Administrative expense
ratio 20.4% 9.6% 16.1%
Combined ratio 96.3% 91.2% 95.6%
----------------------------------------------------------------------
(1) Includes ACE Limited, ACE INA Holdings and intercompany
eliminations
(2) Shown net of income tax
ACE Limited
Supplementary Information
September 30, 2001
(in millions of U.S. dollars)
Interest expense
including fees
Amount Three Months
Outstanding at Ended
Sept. 30, 2001 Coupon Rate Sept. 30, 2001
-------------- ----------- --------------
Short-term Debt
ACE INA commercial paper $ 268 Floating $ 3.7
ACE INA bank borrowings 158 Floating 0.3
ACE Financial Services Note 25 Floating 0.3
-- ---
$ 451 $ 4.3
----- -----
Long-term Debt
ACE Financial Services
Debentures due 2002 $ 75 7.75% $ 1.5
ACE INA Notes due 2004 400 8.20% 8.2
ACE INA Notes due 2006 299 8.30% 6.2
ACE INA Debentures due 2029 100 8.875% 2.2
ACE US Senior Notes due 2008 250 6.47% 4.0
ACE INA Subordinated Notes
due 2009 300 8.41% 6.3
--- ---
$1,424 $ 28.4
----- -----
Trust Preferred Securities
ACE INA Rhino Preferred
Securities due 2002 $ 400 Floating $ 4.8
Capital Re LLC Monthly Income
Preferred Securities due 2044 75 7.65% 1.4
ACE INA Trust Preferred
Securities due 2029 100 8.875% 2.2
ACE INA Capital Securities
due 2030 300 9.70% 7.3
--- ---
$ 875 $ 15.7
----- -----
Other 0.7
---
$ 49.1
=====
Dividend
Amount Three Months
Outstanding at Ended
Sept. 30, 2001 Dividend Rate Sept. 30, 2001
-------------- ------------- --------------
Mezzanine equity $311 8.25% $ 6.4
=== ==== ====
ACE Limited
Consolidated Supplemental Information
(in millions of U.S. dollars)
----------------------------------------------------------------------
September 30, 2001 December 31, 2000
------------------ -----------------
Reinsurance Recoverable
Reinsurance recoverable on paid
losses and loss expenses $ 1,037 $ 937
Reinsurance recoverable on
unpaid losses and loss expenses 10,401 8,767
Provision for uncollectible balances (736) (709)
------ -----
$10,702 $8,995
====== =====
----------------------------------------------------------------------
Property & Life & Financial
Casualty Health Products Total
---------- ------ --------- -----
Net Premiums Written by
Type of Premium
Three months ended
September 30, 2001
ACE Bermuda $ 38 $ - $142 $ 180
ACE Global Markets 86 - - 86
ACE Global Reinsurance 44 32 - 76
ACE USA 440 - 146 586
ACE International 224 117 1 342
ACE Financial Services - - 35 35
--- --- --- -----
Total $832 $149 $324 $1,305
--- --- --- -----
----------------------------------------------------------------------
Three months ended
September 30, 2000
ACE Bermuda $ 113 $ - $ 69 $ 182
ACE Global Markets 171 6 - 177
ACE Global Reinsurance 13 - - 13
ACE USA 417 - 33 450
ACE International 294 31 - 325
ACE Financial Services - - 50 50
----- ---- ---- -----
Total $1,008 $ 37 $ 152 $1,197
----- ---- ---- -----
----------------------------------------------------------------------
Nine months ended
September 30, 2001
ACE Bermuda $ 131 $ - $ 589 $ 720
ACE Global Markets 515 2 - 517
ACE Global Reinsurance 264 63 - 327
ACE USA 1,282 - 224 1,506
ACE International 748 381 5 1,134
ACE Financial Services - - 307 307
----- ----- ----- -----
Total $2,940 $ 446 $1,125 $4,511
------ ------ ------ ------
----------------------------------------------------------------------
Nine months ended
September 30, 2000
ACE Bermuda $ 228 $ - $ 218 $ 446
ACE Global Markets 509 42 - 551
ACE Global Reinsurance 146 - - 146
ACE USA 1,150 - 220 1,370
ACE International 801 279 - 1,080
ACE Financial Services - - 274 274
----- --- --- -----
Total $2,834 $ 321 $ 712 $3,867
----- --- --- -----
----------------------------------------------------------------------
ACE Limited
Consolidated Supplementary Information
Computation of Basic and Diluted Earnings per Share
(in thousands of U.S. dollars, except share and per share data)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
2001 2000 2001 2000
---- ---- ---- ----
Numerator:
Income (loss) excluding
net realized gains
(losses), non-recurring
expenses and cumulative
effect of adopting a
new accounting standard $(390,114) $150,553 $(110,849) $417,665
Feline PRIDES dividend (6,416) (6,537) (19,179) (11,862)
Income (loss) available --------- -------- --------- --------
to the holders of
ordinary shares,
excluding net realized
gains (losses), non-
recurring expenses
and cumulative effect
of adopting a new
accounting standard (396,530) 144,016 (130,028) 405,803
Non-recurring expenses (a) - - (4,461) -
Net income (loss) --------- -------- --------- --------
available to the
holders of ordinary
shares, excluding net
realized gains (losses)
and cumulative effect (396,530) 144,016 (134,489) 405,803
Net realized gains
(losses) (a) (52,476) (9,800) (54,699) 11,529
Net income (loss) --------- -------- --------- --------
available to the
holders of ordinary
shares, excluding
cumulative effect (449,006) 134,216 (189,188) 417,332
Cumulative effect of
adopting a new
accounting standard (a) - - (22,670) -
Net income (loss) --------- -------- --------- --------
available to the
holders of
ordinary shares $(449,006) $134,216 $(211,858) $417,332
Denominator: --------- -------- --------- --------
Weighted average
shares outstanding 230,610,425 222,042,432 231,390,682 217,615,849
Dilutive effect of
Feline PRIDES 2,462,861 2,663,691 3,067,185 -
Effect of other
dilutive securities 5,907,562 6,679,576 6,440,916 4,431,705
----------- ----------- ----------- -----------
Adjusted weighted
average shares
outstanding and
assumed conversions 238,980,848 231,385,699 240,898,783 222,047,554
----------- ----------- ----------- -----------
(a) Shown net of income tax
ACE Corporate Announcements - Third Quarter, 2001
September 28, 2001 - Sovereign Announces Its Election to the Berne
Union
Sovereign Risk Insurance Ltd. announced its election to the
International Union of Credit and Investment Insurers (the Berne
Union). Sovereign's application for membership was approved at the
Berne Union's annual meeting in Biarritz, France on September 19. The
Berne Union has a total of fifty-one members from forty-two countries
and locations. Sovereign is one of only three private sector political
risk insurers to become eligible for, and be approved as, a member of
the Berne Union.
September 25, 2001 - ACE USA Diversified Products Enters Strategic
Alliance with RelMark Program Managers
The Diversified Products division of ACE USA announced it has
selected RelMark Program Managers to manage a program for fire
sprinkler contractors. ACE USA Diversified Products writes customized
commercial lines programs through program agents who are experts in
particular niche markets. RelMark Program Managers of Exton, PA. will
have authority for underwriting, marketing and administration on
behalf of ACE USA Diversified Products.
September 17, 2001 - ACE Establishes Fund for Victims' Families
ACE Limited announced that it has established a fund to aid the
families of the victims of the September 11 attacks in the United
States. The fund will be administered by charitable trusts operated by
ACE Foundations in Bermuda and Philadelphia and will provide one
million dollars a year for a period of five years to families affected
by the disasters in New York, Washington and Pennsylvania.
September 7, 2001 - Sovereign Risk Announces Completion of
Samurai/US Dollar Capital Markets Transaction in Brazil
Sovereign Risk Insurance Ltd. has announced the issuance of two
political risk insurance policies in connection with a capital markets
transaction covering a two-tranche Yen and US Dollar-denominated notes
issue by Banco Itau. The policies were issued in support of an
aggregate amount of US$350 million of notes, US$250 million equivalent
of which was denominated in Japanese yen. The issue represents two
"firsts" for Brazil -- it is both the first wrapped A-rated deal and
the first subordinated bond offering in Brazil.
August 23, 2001 - INAMAR Introduces ORCA, Online Real-Time
Communications Access
INAMAR, the marine insurance products and services arm of the ACE
Group of Companies, announced the initial release of a new system -
ORCA, Online Real-Time Communications Access. This Internet-based
system will be available to appointed recreational marine specialist
insurance agents and will provide automated boat and insurance quoting
on a 24/7 basis using innovative underwriting tools.
August 9, 2001 - ACE Opens Global Headquarters in Bermuda
ACE Limited, the holding company for the ACE Group of Companies,
opened its new global headquarters in Hamilton, Bermuda. An official
opening ceremony attended by the Premier of Bermuda, the Honorable
Jennifer Smith DHumL, JP, MP, Members of Parliament, Chairman & Chief
Executive Officer of ACE, Brian Duperreault, members of ACE's Board of
Directors as well as other invited dignitaries and guests was held at
5.00 p.m., Thursday, August 9, 2001 at the new global headquarters on
Woodbourne Avenue.
July 31, 2001 - Sovereign Announces Financial Results for Fourth Year
of Operations
Sovereign Risk Insurance Ltd. announced financial results for its
fourth year of operations. For the fiscal year July 1, 2000 - June 30,
2001, Sovereign underwrote 52 new political risk insurance policies.
Sovereign's gross premium revenue was $52.5 million, with net revenue
of $40.7 million. This compares with $31.3 million in gross premium
revenue and $23.5 million in net revenue in FY 1999/2000. Sovereign's
combined ratio for the year was 40% and expense ratio was 11%.
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