ACE Limited reports fourth quarter, year end earnings.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)--Nov. 7, 1996--ACE Limited (NYSE NYSE See: New York Stock Exchange :ACL See access control list. 1. ACL - Access Control List. 2. ACL - Association for Computational Linguistics. 3. ACL - A Coroutine Language. A Pascal-based implementation of coroutines. ["Coroutines", C.D. ) Thursday Thursday: see week. reported income 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. of $79.9 million, or $1.35 per share, for the fiscal 1996 fourth quarter ended Sept. 30, 1996, compared with $46.3 million, or $1.00 per share, reported for the same quarter in fiscal 1995. Net income for the quarter was $86.9 million, or $1.46 per share, compared with $86.8 million, or $1.87 per share, for the same quarter last year. 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. net asset value per share at Sept. 30, 1996 was $38.31 and total 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. was in excess of $2.2 billion. For the fiscal year ended Sept. 30, 1996, income excluding net realized gains was $234.5 million, or $4.71 per share, compared with $186.8 million, or $3.97 per share, for fiscal 1995. Net income for the year was $289.7 million, or $5.82 per share, versus net income of $237.6 million, or $5.05 per share, for the same period last year. 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, president and chief executive officer of ACE commented: "The success of our strategic diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. over the past two years is clearly evident today. Through development of new product lines and the recent acquisitions of Methuen Methuen (mĭth  `ən), town (1990 pop. 39,990), Essex co., NE Mass., a suburb of Boston; settled c.1642, set off from Haverhill 1725. Group Limited (Methuen) and Tempest 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. Company Limited
(Tempest), ACE has constructed a solid foundation upon which to
grow.""This quarter, our balance sheet and financial results reflect the positive contribution of Tempest," continued Duperreault. "We are pleased to advise that Tempest recently received an A. M. Best Company rating of A (Excellent) as a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." subsidiary, which matches the A (Excellent) rating for the other insurance subsidiaries of ACE Limited, namely A.C a.c., adv the abbreviation for ante cibum, a Latin phrase meaning “before eating.” .E. Insurance Company, Ltd. and Corporate Officers & Directors Assurance Ltd." "The large increase in our premium volume in 1996 versus 1995 is due to our new lines of business, particularly satellite and financial lines, and the inclusion of Tempest," Duperreault commented. "The decrease in premiums in our excess liability and directors and officers liability lines reflect market conditions as well as the impact from the reduction in integrated occurrence limits." As a result of the significant increase in the market value of ACE stock during 1996, ACE has recorded expenses for stock appreciation rights representing a total of twelve cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the year ending Sept. 30, 1996 and three cents per share for the quarter ended Sept. 30, 1996. Net premiums written during the fourth quarter increased 24.1 percent to $131.2 million, compared with $105.8 million for the same period last year. Net premiums earned during the quarter were up 61.9 percent to $179.0 million, versus $110.6 million reported in the comparable quarter last year. For fiscal 1996, net premiums written were $602.7 million, a 41.9 percent increase over $424.8 million for fiscal 1995. Net premiums earned for this period were up 37.0 percent to $587.2 million, versus $428.7 million in fiscal 1995. Total investments and cash increased 32.7 percent to $4.2 billion at Sept. 30, 1996, compared with $3.1 billion at Sept. 30, 1995. This increase is due to strong cash flows from insurance operations, the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of funds generated by the portfolio, and the inclusion of the Tempest portfolio. Net investment income, excluding net realized gains, was $60.4 million for the fourth quarter, compared with $46.6 million for the same period last year. Net investment income, excluding net realized gains, increased 13.9 percent to $206.5 million for the year ended Sept. 30, 1996, from $181.4 million for fiscal 1995. Net realized gains for the quarter were $7.0 million, compared with $40.5 million for the same period last year. Net realized gains were $55.2 million for the year ending Sept. 30, 1996, compared with $50.8 million in 1995. The ACE group of companies provides insurance and reinsurance for a diverse group of international clients. ACE Limited, through its Bermuda-based subsidiaries, A.C.E. Insurance Company, Ltd., Corporate Officers & Directors Assurance Ltd. and Tempest Reinsurance Company Limited, provides excess liability insurance, directors and officers liability insurance Directors and Officers Liability Insurance is insurance payable to the directors and officers of a company to cover damages or defence costs in the event they are sued for wrongful acts while they were with that company. , and property catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). reinsurance, as well as satellite, aviation, excess property, and financial lines coverages. ACE also owns a majority interest in Methuen Group Limited and provides corporate capital to Lloyd's Lloyd's, London insurance underwriting corporation of many separate syndicates; often called Lloyd's of London. Founded in the late 17th cent. by a group of merchants, shipowners, and insurance brokers at the coffeehouse of Edward Lloyd, the association is now syndicates managed by Methuen's managing agency. At Sept. 30, 1996, ACE Limited had in excess of $2.2 billion in shareholders' equity and over $4.5 billion in assets. -0-
ACE Limited
Summary Consolidated Financial Data
(in thousands of U.S. dollars, except share and per share data)
Three Months Ended Year Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
--------- -------- -------- --------
Operations Data:
Net premiums written $131,246 $105,792 $602,707 $424,756
Net premiums earned 178,971 110,553 587,245 428,661
Net investment income 60,445 46,591 206,524 181,375
Losses and loss
expenses 130,386 90,385 464,824 350,653
Acquisition costs 16,004 11,639 52,954 46,647
Administrative expenses 13,107 8,823 41,487 25,935
Income excluding net
realized gains 79,919 46,297 234,504 186,801
Net realized gains 6,999 40,548 55,229 50,765
Net income $ 86,918 $ 86,845 $289,733 $237,566
Earnings per share $1.46 $1.87 $5.82 $5.05
Earnings per share
excluding net realized
gains $1.35 $1.00 $4.7l $3.97
Weighted average shares
outstanding 59,377,056 46,335,897 49,813,628 47,059,006
Sept. 30, Sept. 30,
1996 1995
Balance Sheet Data:
Total investments and cash $4,155,274 $3,132,200
Total assets 4,574,358 3,236,906
Unpaid losses and loss expenses 1,836,113 1,437,930
Shareholders' equity 2,244,278 1,442,663
Fully diluted net asset value
per share $38.31 $31.19
ACE Limited
Consolidated Supplementary Information
(in millions of U.S. dollars)
Three Months Ended Year Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
--------- -------- -------- --------
Net Premiums Written:
Excess liability $ 34.8 $ 50.6 $202.3 $239.1
Directors & officers
(D&O) 18.5 21.8 97.6 105.0
Satellite 20.3 14.3 85.3 45.0
First Line 2.0 0.7 12.0 13.9
Aviation 9.8 5.4 27.1 7.0
Excess property 0.3 3.8 13.9 5.3
Financial lines 7.0 9.2 119.2 9.2
Lloyd's syndicates 3.6 - 9.7 -
Property catastrophe
(Tempest) 34.8 - 34.8 -
Other 0.1 - 0.8 0.3
Total $131.2 $105.8 $602.7 $424.8
Net Premiums Earned:
Excess liability $ 58.8 $ 63.7 $238.2 $262.4
Directors & officers
(D&O) 25.1 27.0 104.5 110.1
Satellite 20.8 13.6 77.8 43.3
First Line 2.9 3.4 11.9 9.2
Aviation 7.2 1.2 19.0 1.5
Excess property 4.3 0.9 11.8 1.0
Financial lines 22.1 0.8 84.9 0.8
Lloyd's syndicates 1.9 - 2.8 -
Property catastrophe
(Tempest) 35.7 - 35.7 -
Other 0.2 - 0.6 0.4
Total $179.0 $110.6 $587.2 $428.7
Sept. 30,
1996 1995
Unpaid Losses and Loss Expenses:
Case and loss expense reserves $ 993.7 $ 822.1
IBNR loss reserves 842.4 615.8
Total $1,836.1 $1,437.9
ACE Limited
Consolidated Supplemental Information
Movement in Shareholders' Equity
Number of Shareholders'
Shares Equity
($ millions)
Balance - June 30, 1996 46,105,108 $1,581
Shares issued - Tempest 13,333,247 622
Options issued - Tempest (Note 1) - 12
Shares repurchased (1,268,600) (58)
Net income - 87
Change in unrealized appreciation
on investments - 10
Options exercised 1,000 -
Dividends - (10)
Balance - September 30, 1996 58,170,755 $2,244
Note 1: Options to acquire Tempest shares were converted into
446,089 ACE Limited options as part of the Tempest
transaction.
Tempest Reinsurance Company Limited
Supplemental Information
(in millions of U.S. dollars)
Three Months Ended
Sept. 30, 1996
Net premiums earned $34.5
Net investment income 8.6
Losses and loss expenses (12.6)
Acquisition costs (3.8)
Administrative expenses (2.9)
Income excluding net realized gains $23.8
Sept. 30,
1996
Total investments and cash $522.7
Goodwill 201.7
Total assets 781.6
Unpaid losses and loss expenses 40.1
Shareholder's equity 663.3
CONTACT: ACE Limited Helen Helen, in Greek mythology, the most beautiful of women; daughter of Leda and Zeus, and sister of Castor and Pollux and Clytemnestra. While still a young girl Helen was abducted to Attica by Theseus and Polydeuces, but Castor and Pollux rescued her. M. Wilson Wilson, city (1990 pop. 36,930), seat of Wilson co., E N.C., in a rich agricultural region; inc. 1849. It is a commercial and industrial center with a large tobacco market. Manufactures include textile goods (especially clothing), metal products, and processed foods. , Investor Relations Investor relations The process by which the corporation communicates with its investors. 441/299-9283 |
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