Earnings Report: ACE Limited

Selected earnings highlights from Swiss based ACE Limited for the second quarter and the first half of 2012 are as follows:
Q2 2012 Q2 2011
Gross premiums written ———— $5.653 bn $5.423 bn
Net premiums written ————— $4.130 bn $3.953 bn
Net premiums earned ——– $3.783 bn $3.757 bn
Net income —————————– $328 mn $594 mn
*Operating net income ————— $743 mn $673 mn)
Net realized gain/loss —————— ($394 mn) ($73 mn)
Net investment income —————- $537 mn $569 mn
Q1 combined ratio – 88.7 percent (92.7 percent in Q2 2011
1st Half 2012 1st Half 2011
Gross premiums written ————- $10.440 bn $10.067 bn
Net premiums written ————— $7.702 bn $7.399 bn
Net premiums earned ———- $7.164 bn $7.066 bn
Net income —————————- $1.301 bn $844 mn
*Operating net income —————- $1.444 bn $932 mn
Net realized gain/loss —————– ($134 mn) ($118 mn)
Net investment income ————- $1.081 bn $1.113 bn
Q1 combined ratio – 88.9 percent (98.5 percent in 1st half 2011)

*excludes net realized capital gain/loss

Chairman and CEO Evan G. Greenberg commented: “ACE had a very strong second quarter, with excellent operating results that were ahead of plan despite a challenging and slowing global economy. After-tax operating income was $743 million, up 10 percent from last year, and our operating ROE was 12.6 percent.

“Our underwriting results this quarter were again distinguishing, with a P&C combined ratio of 88.7 percent. ACE’s operating performance has been strong all year with earnings for the first six months exceeding $1.4 billion or $4.22 per share. Book value, which grew 1.3 percent in the quarter and is up almost 6 percent for the year, was impacted by the euro zone debt crisis and the consequent flight to safety, which affected foreign exchange, interest rates and equity markets.

“Total company net premiums written grew 4.5 percent in the quarter, or 6.5 percent adjusting for the impact of foreign exchange. As we said last quarter, our premium growth rate has been accelerating as the year progresses. We are benefiting from strong, broad-based growth, both geographic and product, along with an improving P&C price environment globally. For the first time, pricing in our international P&C operations in aggregate turned positive, whereas for our U.S. business, rates continued to rise, up 4.7 percent on average for the quarter.

“Drought conditions in the U.S. are impacting our crop insurance business and will affect our earnings in the second half of the year as described in our updated guidance. Crop insurance aside, we are optimistic about our revenue and earnings prospects for the balance of the year and we are well positioned to take advantage of the positive trend in P&C prices globally. At the same time, we are mindful of the economic and political headwinds – beginning with the euro zone crisis and the U.S. fiscal cliff, which are impacting economic conditions and business confidence in the U.S., China and the balance of the world – and the uncertainties these present.”

Source: ACE Limited

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