ACE Limited Posts $779 Million Q2 Net Income; $1.513 Billion 1st Half

July 23, 2014

ACE Limited reported net income of $779 million for the first quarter of 2012, compared to $891 million in Q2 2013. For the first six months of 2014 ACE had net income of$1.513 billion, compared to $1.844 billion in the same period of 2013.

Gross premiums written for the quarter were $ 6.006 billion ($6.030 billion in Q2 2013). They were $11.380 billion for the half year, compared to $10.993 billion in 2013. Net premiums written were in Q2 $4.559 billion, $8.744 billion for the half year, while net premiums earned were $4.332 billion and $8.302 billion respectively.

The earnings report said: “Operating income was $2.42 per share, compared with $2.29 per share for the same quarter last year. Book value and tangible book value per share increased 3.8 percent and 3.9 percent, respectively, from March 31, 2014. Book value and tangible book value per share now stand at $90.19 and $73.77, respectively. Operating return on equity for the quarter was 11.8 percent. The property and casualty (P&C) combined ratio for the quarter was 87.5 percent.”

“Operating income was $4.69 per share, compared with $4.46 per share for 2013. Book value increased $1.5 billion, up 5.2 percent from December 31, 2013, and tangible book value increased almost $1.4 billion, up 5.9 percent. The P&C combined ratio for the six months ended June 30, 2014, was 88.2 percent.

“For the six months ended June 30, 2014, net income was $4.43 per share, compared with $5.36 per share for 2013. Operating income was $4.69 per share, compared with $4.46 per share for 2013. Book value increased $1.5 billion, up 5.2 percent from December 31, 2013, and tangible book value increased almost $1.4 billion, up 5.9 percent. The P&C combined ratio for the six months ended June 30, 2014, was 88.2 percent.

Chairman and CEO Evan G. Greenberg commented: “ACE’s excellent second quarter results were marked by strong earnings, very good premium revenue growth globally and continued expansion of our business in the majority of markets in which we operate – both developed and developing. After-tax operating income of $825 million was driven by strong growth in underwriting and good investment income results, which together produced an operating ROE of about 12 percent. Per share book value increased nearly 4 percent in the quarter and over 6 percent for the year.

“P&C underwriting income was up 10 percent with a combined ratio of 87.5 percent. The growth in underwriting was driven by current accident year underwriting income before catastrophe losses, which was up nearly 12 percent as a result of global P&C net earned premium growth of 8.5 percent, as well as margin improvement in our international business. On the investment side, net investment income was up over 4 percent — a very good result in this environment which benefited from our strong growth in invested assets.

“P&C net premiums written excluding agriculture were up 7 percent in constant dollars. This premium growth was well distributed across the company by territory, product line and customer segment with double-digit contributions from Asia and Latin America and solid single-digit growth in North America and the continent of Europe. Our ability to generate sustained premium revenue growth reflects our deepening presence and capabilities in important long-term growth markets of the world. In two of these, Thailand and Brazil, we either completed or announced acquisitions in the quarter that meaningfully advance our company strategically. With the addition of Samaggi Insurance, ACE is now the largest foreign-owned P&C insurer in Thailand. Similarly, the combination of our existing business in Brazil and Itaú Seguros’s corporate P&C business, which we plan to acquire early next year, will make ACE the largest commercial P&C insurer in that country.”

Source: ACE Limited

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