ACE USA Power Products Introduces PowerBacker LTO; Long-Term Outage Insurance Coverage for Electric Utilities.

Business Editors/Hi-Tech Writers

PHILADELPHIA--(BUSINESS WIRE)--Dec. 5, 2001

ACE USA Power Products announces the latest addition to its family of coverages for electric utilities -- PowerBacker(SM) LTO -- designed exclusively for protection against long-term outages.

This product meets the utility industry's demand for a specialist solution to earnings shocks that can result from long-term generation outages.

In today's financial markets, a failure to meet expectations can negatively affect market capitalization. With limits of up to $100 million, PowerBacker LTO protects investor-owned utilities and municipalities against adverse financial consequences that result when one or more generating units is out of commercial operation for long periods.

"We like the fact that the policy focuses exclusively on providing coverage for unplanned outages," said Terry Novatnack, CPCU, ARM - manager corporate risk and insurance of PPL Corporation. "Moreover, we appreciated the fact that ACE worked hard to provide a structure that met our needs; especially given the tough insurance market."

Unlike traditional business interruption coverage that is offered as a sub-part of a property program, PowerBacker LTO is superior because it specifically underwrites the risk associated with long- term outages. It provides a clear, concise policy which can eliminate time-consuming claim adjustments, and strips away everything unrelated to the long-term power outage risk.

"In today's generating world, long-term outage protection can no longer be considered a `side bar' to other property covers," said Kurt Husar, vice president, ACE USA Power Products. "CFOs recognize the impact that these outages have on their business and are looking for a product that can protect their market capitalization. The costs of lost generating capacity associated with a long-term outage can be far more severe than the physical damage loss."

PowerBacker LTO offers customers a product that is easily tailored to match their risk tolerance. It provides flexible, easily understood coverage that is linked to outages -- not to property damage. PowerBacker LTO can be a stand-alone product or it can be easily integrated with ACE USA's PowerBacker short-term outage protection product.

Indemnity schedules are flexible and can be a stipulated value or developed to reflect the varying "forward" values of generation throughout the year all with the objective of meeting lost value, debt-service commitments, or payments in lieu of taxes. The long-term loss of just one generating unit can have a devastating effect on the ability to meet these obligations.

ACE USA Power Products is uniquely positioned to meet the evolving risk management needs of the utility industry. ACE USA Power Products developed the concept of short-term outage protection with its first PowerBacker policy and launched the second generation of that concept with PowerBacker(SM) system protection in 2000.

The company has insured more than 100,000 megawatts of generated power in the industry, to date.

For more information, contact ACE Power Products at 800/356-2827, or contact your insurance broker.

ACE USA, headquartered in Philadelphia, is the U.S.-based operating division of the ACE Group of Companies, headed by ACE Limited (NYSE:ACE). ACE USA provides insurance products and services through the U.S. operating subsidiaries.

ACE USA is rated "A" (Excellent) by A.M. Best and "A+" (Strong) by Standard & Poor's. The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients around the world. Additional information can be found at: www.ace-ina.com.