Fitch Ratings Takes Several Rating Actions Affecting ACE.

Business Editors

CHICAGO--(BUSINESS WIRE)--April 23, 2003

Fitch Ratings today took several actions affecting the ratings of ACE Limited (NYSE: ACE) and its subsidiaries.

Fitch downgraded the debt ratings of ACE and its subsidiary ACE INA Holdings, Inc. (ACE INA) by one notch, including the senior debt ratings to 'A-' from 'A' and commercial paper ratings to 'F2' from 'F1'. Fitch also downgraded the insurer financial strength ratings of the insurance subsidiaries of Brandywine Holdings by four notches to 'B+' from 'BBB-'.

Fitch assigned a 'BBB+' rating to the preferred securities issue planned under ACE's recent shelf registration, while downgrading the rating on existing preferred securities to 'BBB+' from 'A-'.

The Rating Outlook on all of the above noted ratings is Stable.

The insurer financial strength ratings of the insurance subsidiaries of INA Holdings remain on Rating Watch Negative pending ACE's planned issuance of $500 million of perpetual preferred securities. If ACE successfully completes the preferred securities issue or issues in the near term and contributes approximately $250 million of capital to the insurance subsidiaries of INA Holdings, Fitch expects to affirm those ratings at 'A+' with a Stable Rating Outlook. Otherwise, Fitch expects those ratings will be downgraded to 'A' with a Stable Rating Outlook.

On July 2, 1999, ACE acquired CIGNA Corporation's (CIGNA) domestic property/casualty insurance operations including its run-off business and its international property/casualty companies. INA Holdings and Brandywine Holdings together comprise the domestic operations of ACE INA and represent the domestic property/casualty insurance operation that ACE purchased from CIGNA in 1999. INA Holdings owns the 19 insurance companies that, along with the 3 companies owned by ACE US Holdings, represent the active insurance operations of ACE USA.

Brandywine Holdings represents the inactive, run-off operation that houses the group's asbestos and environmental claims. The two groups were separated in a 1996 restructuring, effective December 31, 1995.

Fitch had previously placed the ratings of ACE, ACE INA and INA Holdings on Rating Watch Negative on January 29, 2003 following ACE's announcement that it would incur a $2.2 billion gross charge as the result of its asbestos reserve review, while at the same time downgrading Brandywine's rating. After reinsurance, provision for bad debts and taxes, the charge was $354 million. The gross asbestos charge related entirely to Brandywine Holdings.

The downgrade of the debt and trust preferred securities ratings reflects ACE's high exposure to reinsurance recoverables, moderate financial leverage and the low ratio of tangible equity to total equity. Fitch believes ACE uses reasonable techniques to establish its provision for uncollectible reinsurance. However, Fitch notes that the financial condition of the worldwide reinsurance industry continues to deteriorate as the result of losses on investments and adverse development of reserves, particularly liability reserves, and that dispute risk is also rising industry-wide. Such trends could lead to the need to further strengthen reserves for uncollectible reinsurance in the future.

Positively, Fitch noted ACE's strong underwriting earnings (excluding the asbestos charge) and adequate overall reserve level. Fitch believes ACE has benefited from current hard market conditions and will continue to benefit from those conditions at least through 2003.

The most significant rating action taken today is the reduction of the Brandywine insurance subsidiaries from the 'secure' category to the 'vulnerable' category. This action reflects the magnitude of the asbestos charge, the exhaustion of the reinsurance provided by National Indemnity Company, the exhaustion of the $50 million dividend retention fund provided by INA Holdings and the partial consumption of the $800 million stop loss protection provided by INA Holdings' insurance subsidiaries. Additionally, as part of the 1996 restructuring agreement, the Brandywine insurance subsidiaries are permitted to discount loss reserves for the time value of money to an expected present value. With the recent charge, this discount grew significantly.

Fitch believes that there is now a high degree of uncertainty that Brandywine will be able to fulfill all future obligations. Fitch is also uncertain that any additional funds would be provided by ACE to support the run-off, above and beyond the remaining stop loss obligations.

Fitch views the strong results posted by the ongoing insurance operations of INA Holdings positively. Fitch does not view the asbestos charge as a negative indication of the active companies' underwriting strategy or ability. However, Fitch notes that the penetration of the asbestos charge into the stop loss agreement resulted in a reduction in surplus at INA Holdings. Additionally, the active companies are potentially exposed to further losses at Brandywine up to the remainder of the stop loss cover and any future replenishment of the dividend retention fund. Thus, Fitch believes a capital contribution would be required to affirm the insurance ratings of INA Holdings at current levels

The individual ratings affected are listed below.

Entity/Issue/Type                       Action   Rating/Outlook

ACE Limited
--Long-term rating                     Downgrade     'A-';
--Short-term rating                    Downgrade     'F2';
--Senior debt                          Downgrade     'A-';
--Cum redeemable preferred shares      Downgrade     'BBB+';
--Commercial paper                     Downgrade     'F2';
--Preferred stock                       Assign        'BBB+';
--Rating Watch                          Removed from Negative;
--Rating Outlook                                       Stable.

ACE INA Holdings, Inc.
--Long-term rating                     Downgrade     'A-';
--Short-term rating                    Downgrade     'F2';
--Senior debt                          Downgrade     'A-';
--Commercial paper                     Downgrade     'F2';
--Rating Watch                          Removed from Negative;
--Rating Outlook                                       Stable.

ACE Capital Trust I
--Trust preferred securities           Downgrade     'BBB+';
--Rating Watch                          Removed from Negative.

ACE Capital Trust II
--Capital securities                   Downgrade     'BBB+';
--Rating Watch                          Removed from Negative.

ACE American Reinsurance Company
Century Indemnity Company
Century Reinsurance Company
--Insurer financial strength            Downgrade   'B+';
--Rating Outlook                        Stable.

The ACE Group of Companies is one of the world's largest providers of property and casualty insurance and reinsurance. Headquartered in Bermuda, ACE provides a diversified range of products and services to clients in nearly 50 countries around the world.