Bermuda’s largest insurer, ACE Limited, did a bit better than its counterpart in the third quarter (See previous article), reporting a net loss of “only” $112 million or $(0.43) per common share after payment of preferred dividends, compared with net income of $4 million or $(0.03) per share for the third quarter of 2004.
The company said: “Income (loss) excluding net realized gains (losses) for the third quarter was $(187) million, or $(0.70) per share, compared with $37 million or $0.09 per share for the same quarter a year ago. The losses from hurricanes Katrina, Rita and Dennis and other catastrophes resulted in an after-tax charge of $742 million for the quarter or $2.56 per share compared with after-tax net catastrophe losses of $406 million or $1.42 per share in the third quarter of 2004. The combined ratio was 116.5 percent. If catastrophe losses were excluded, the combined ratio would be 86.4 percent, a 0.6 point improvement over the comparable quarter in 2004.”
President and CEO Evan Greenberg commented: “The third quarter was a difficult quarter for the insurance industry, and our company was no exception. We experienced a series of significant natural catastrophes including Hurricane Katrina, which alone produced the largest insured loss in history. Our results reflect the strength of our organization. Our catastrophe losses were within our tolerance level for events of this size given our capital base. Our revenue growth reflected our underwriting discipline in the face of a softening underwriting environment. Exclusive of Hurricanes Rita and Katrina, our earnings were excellent, with strong contributions from both underwriting and investment income.”
He added that the “successful offering of common shares in early October, which raised $1.5 billion of gross equity capital, signals our confidence in the future market environment, and we plan to move swiftly and deliberately to take advantage of the opportunities that we believe will emerge.”
The full earnings report can be obtained on the Company’s Website at: http://www.acelimited.com. A recording of the earnings conference call, held Wednesday, October 26, is also available on the Website.
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