Bermuda’s ACE Ltd. reported a net loss for the quarter ended Sept. 30 of $442.6 million compared with net income of $140.8 million in 2000 and said that “the loss per share, after deducting preferred dividends, was $1.88 for the current quarter compared with earnings per share of $0.58 for the same quarter last year.” At the same time it also announced a new $1 billion share offer.
An after tax reduction of $588.8 million due to Sept.11 related losses produced the negative income figures. For the first nine months of the year ACE posted a 25.6 percent increase in gross premiums written to $7.467 billion, and an increase in net premiums of 16.6 percent to $4.51 billion. But the attack losses have resulted in an overall net loss for the first nine months of $513 million.
ACE doesn’t appear to be left behind, however, by the dramatically changed circumstances in the industry. It announced that it was preparing a public offering of $1 billion worth of capital stock with an additional reserve of $150 million to cover over allotments.
“ACE expects to use the net proceeds of the offering of the ordinary shares to take advantage of opportunities in the global insurance and reinsurance markets becoming available as a result of recent events which have depleted industry capital and materially accelerated demand for insurance and reinsurance. ACE intends to deploy the new capital by, among other things, expanding its net underwriting capacity, either through internal growth and/or through acquisition of lines of business or companies,” said the announcement.
ACE joins a growing list of insurers and reinsurers, many headquartered in Bermuda, who are gearing up their capital in expectation of steep premium increases, and capacity shortfalls. (See following article – Arch Capital).
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