ACE Limited Reports Year-End, Fourth Quarter Results.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)--Feb. 5, 2003 ACE Limited (NYSE NYSE See: New York Stock Exchange :ACE) today reported net 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 $511 million for the full year ended December December: see month. 31, 2002 compared with a loss of $69 million last year, (including a loss of $559 million after tax related to the September September: see month. 11, 2001 tragedy). Net operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per share for 2002 were $1.80 compared with a net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. per share of $0.40 per share for 2001. Net income including 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. for the year was $77 million compared with a net loss of $146 million for fiscal 2001. Earnings per share were $0.19 for the current year compared with a loss per share of $0.74 last year. The fully 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. book value per share of the Company at December 31, 2002 was $24.16 compared with $23.59 at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001. For the quarter ended December 31, 2002, ACE reported a net operating loss of $99 million (after a charge of $354 million related to prior year asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. and environmental reserves) compared with net operating income of $42 million for the same quarter in 2001. The operating loss per common share was $0.41 compared with net operating earnings of $0.14 per share for the same quarter last year. The net loss for the fourth quarter, including realized losses, was $168 million compared with net income of $46 million for the same quarter in 2001. On a per share basis, the loss was $0.67 per share for the current quarter compared with earnings per share of $0.15 for the Company a year ago. 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 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 charge for prior years' asbestos exposure overshadowed what was actually a very good year for ACE. Our core property and casualty business grew rapidly, generating significant cash flow and very satisfactory 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. profitability. As planned, Life 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. declined significantly and 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. , which we have always said is erratic er·rat·ic adj. 1. Having no fixed or regular course; wandering. 2. Lacking consistency, regularity, or uniformity: an erratic heartbeat. 3. , declined moderately." Net premiums written increased 7 percent over the prior quarter a year ago. Property and casualty net premiums written (exclusive of Life Reinsurance and Financial Services) increased by 54 percent compared with the fourth quarter of 2001. Life Reinsurance and the Financial Services segments declined 86 percent and 43 percent, respectively. Net premiums written for the year ended December 31, 2002, increased by 27 percent compared with 2001. Property and casualty net premiums written (excluding the Financial Services segment and the Life Reinsurance division) increased 43 percent over prior year levels. Net investment income rose to $202 million for the 2002 fourth quarter compared with $192 million in the prior year. For the full year, net investment income, excluding net realized losses, was $802 million compared with $785 million on the same basis for fiscal 2001. During the 2002 fourth quarter, ACE had net realized losses, net of tax, of $69 million, compared with 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. of $4 million for the same quarter in 2001. For the year ended December 31, 2002, net realized losses, after taxes, were $417 million compared with net realized losses of $50 million for fiscal 2001. Please refer to the ACE Financial Supplement, which is posted on the Company's website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverables, asbestos reserves, financial guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. , and invested assets. ACE's website reference (url) is http://media.corporate-r.net/media_files/NYS/ace/reports/fin_supp_December_31_2002.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 A predefined linkage between one object and another. See hypertext. hyperlink - anchor into your Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the browser's URL address field.) ACE Limited (NYSE:ACE) will host a live webcast of its fourth quarter, year-end earnings conference call on Thursday Thursday: see week. , February February: see month. 6, 2003, beginning at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The public may access both the webcast, available on a listen-only basis, and the financial supplement at http://www.acelimited.com. Please refer to our website under "Investor Information, Calendar of Events", one half hour before, for further webcast details. Individuals who access the webcast will be asked to identify themselves and their affiliation affiliation (  fil´ēā´sh . A replay of
the webcast will be available following the live webcast on Thursday,
February 6, 2003 until Thursday, February 20, 2003.
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 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 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: 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 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 growth and profitability 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, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative 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, the amount and timing of reinsurance recoverables, actual market developments, rating agency action, possible terrorism or the outbreak outbreak see epidemic. of war and economic, political, 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, 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.
ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)
----------------------------------------------------------------------
December 31 December 31
2002 2001
------------- -------------
(Unaudited)
Assets
Total investments and cash $ 18,278 $ 15,936
Reinsurance recoverable 13,991 11,398
Insurance and reinsurance balances
receivable 2,654 2,522
Other assets 8,482 7,331
------------ ------------
Total assets $ 43,405 $ 37,187
============ ============
Liabilities
Unpaid losses and loss expenses $ 24,315 $ 20,728
Unearned premiums 5,586 3,853
Other liabilities 6,804 6,188
------------ ------------
Total liabilities $ 36,705 $ 30,769
------------ ------------
Commitments and contingencies
Mezzanine equity $ 311 $ 311
------------ ------------
Shareholders' equity
Total shareholders' equity $ 6,389 $ 6,107
------------ ------------
Total liabilities, mezzanine equity and
shareholders' equity $ 43,405 $ 37,187
============ ============
Book value per share $ 24.16 $ 23.59
ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
----------------------------------------------------------------------
Three Months Years
Ended Ended
December 31 December 31
--------------- -------------------------
2002 2001 2002 2001 2000
------- ------- -------- -------- -------
Gross premiums written $3,244 $2,699 $12,819 $10,165 $7,586
Net premiums written 1,984 1,853 8,068 6,363 4,879
Net premiums earned 1,969 1,763 6,830 5,916 4,534
Losses and loss expenses 1,764 1,104 4,906 4,552 2,936
Life and annuity benefits 52 343 158 401 -
Policy acquisition costs 275 226 960 785 651
Administrative expenses 266 221 944 823 745
------- ------- -------- -------- -------
Underwriting income (loss) (388) (131) (138) (645) 202
Net investment income 202 192 802 785 771
Other income (expense) 1 - 5 1 3
Interest expense 47 46 193 199 221
Income tax expense (benefit) (133) (47) (35) (68) 94
Amortization of goodwill - 20 - 79 79
------- ------- -------- -------- -------
Net operating income (loss)
(a) $(99) $42 $511 $(69) $582
Net realized gains (losses) (69) 4 (417) (50) (39)
Debt prepayment expense - - (17) - -
Non-recurring expenses - - - (4) -
Cumulative effect of
adopting a new accounting
standard - - - (23) -
------- ------- -------- -------- -------
Net income (loss) $(168) $46 $77 $(146) $543
======= ======= ======== ======== =======
Earnings (loss) per share:
Net operating earnings
(loss) per share ($0.41) $0.14 $1.80 ($0.40) $2.48
Earnings (loss) per share ($0.67) $0.15 $0.19 ($0.74) $2.31
Weighted average shares
outstanding 260.9 258.7 269.9 233.8 227.4
Loss and loss expense ratio
(b) 91.8% 77.8% 73.5% 82.6% 64.7%
Expense ratio (b) 28.0% 31.1% 28.2% 29.0% 30.8%
Combined ratio (b) 119.8% 108.9% 101.7% 111.6% 95.5%
(a) Net operating income comprises income excluding net realized gains
(losses), debt prepayment expense, non-recurring expenses and the
cumulative effect of adopting a new accounting standard, net of
tax.
(b) Ratios exclude life reinsurance business
ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------
Three Months Years
Ended Ended
December 31 December 31
---------------- -------------------------
2002 2001 2002 2001 2000
-------- ------- -------- -------- -------
Gross Premiums Written
----------------------------
Insurance - North American $1,640 $1,097 $6,116 $4,521 $3,626
Insurance - Overseas General 1,203 928 4,114 3,289 2,822
Global Reinsurance (a) 163 384 1,052 874 337
Financial Services 238 290 1,537 1,481 801
------- ------- -------- -------- -------
Total $3,244 $2,699 $12,819 $10,165 $7,586
------- ------- -------- -------- -------
Net Premiums Written
----------------------------
Insurance - North American $819 $468 $2,919 $1,986 $1,891
Insurance - Overseas General 796 621 2,716 2,154 2,004
Global Reinsurance (a) 141 363 936 762 275
Financial Services 228 401 1,497 1,461 709
------- ------- -------- -------- -------
Total $1,984 $1,853 $8,068 $6,363 $4,879
------- ------- -------- -------- -------
Net Premiums Earned
----------------------------
Insurance - North American $742 $456 $2,475 $1,816 $1,734
Insurance - Overseas General 671 511 2,393 1,941 1,832
Global Reinsurance (a) 264 434 835 730 252
Financial Services 292 362 1,127 1,429 716
------- ------- -------- -------- -------
Total $1,969 $1,763 $6,830 $5,916 $4,534
------- ------- -------- -------- -------
Net Operating Income (Loss)
----------------------------
Insurance - North American $(236) $88 $97 $218 $441
Insurance - Overseas General 72 (104) 116 (115) 105
Global Reinsurance (a) 72 63 296 (9) 170
Financial Services 50 49 202 50 88
Corporate (57) (54) (200) (213) (222)
------- ------- -------- -------- -------
Total $(99) $42 $511 $(69) $582
------- ------- -------- -------- -------
(a) Includes both property and casualty reinsurance and life
reinsurance business
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