ACE Limited reported net operating income of $158 million for the quarter ended September 30, 2002 compared with a net operating loss of $390 million for the same quarter in 2001. It also announced a net loss for the quarter of $57 million compared with a net loss of $442 million for the comparable period last year.
The figures should be considered in light of the extraordinary losses caused by the attacks of Sept. 11 which were reported in the third quarter of 2001. This year ACE announced loss estimates of around $90 million from this summer’s flooding in Germany and Eastern Europe.
Net operating earnings per share, after deducting preferred dividends, was $0.57 for the current quarter compared with a net operating loss per share of $1.72 for the same quarter last year. Including after tax net realized losses of $205 million, The loss per share, after deducting preferred dividends, was $0.24 for the quarter compared with a loss of $1.95 for the same quarter last year.
“This quarter and our year to date have been characterized by exceptional premium growth. This has helped produce positive cash flow in excess of $1 billion for the quarter,” stated Chairman and CEO Brian Duperreault. “Operating earnings and unrealized gains from our fixed income portfolio more than offset realized losses this quarter, resulting in an increase in book value per share.” This figure has risen from $23.59 on December 31, 2001 to $24.37 at the end of September.
“Gross premiums written during the September 30, 2002 quarter increased by 41 percent to $3.5 billion, compared with $2.5 billion for the comparable quarter in 2001. Net premiums written increased by 70 percent to $2.2 billion and net premiums earned increased by 37 percent to $1.9 billion,” said the announcement.
Underwriting results improved in the current quarter with a consolidated combined ratio of 97.7 percent compared with 142.5 percent in the prior year quarter.
Net investment income was $199 million for fiscal 2002 third quarter compared with $192 million for fiscal 2001 third quarter. The average market yield on ACE’s portfolio declined to 4.7 percent as compared with 5.2 percent at year-end. “Volatile securities markets produced realized losses in our equity and derivatives portfolios but produced offsetting unrealized gains in our fixed income portfolio,” said the bulletin.
Total shareholder’s equity rose to $6.4 billion, an increase of 5.5 percent over December 31, 2001.
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