ACE Limited reported net income for the quarter ended March 31, 2015, of $681 million, or $2.05 per share, compared with $734 million or $2.14 per share in Q1 2014. Operating income was $745 million, or $2.25 per share, compared with $777 million, or $2.27 per share for the same quarter last year.
Operating return on equity for the quarter was 10.8 percent. The property and casualty (P&C) combined ratio for the quarter was 88.4 percent. Book value and tangible book value per share increased 0.9 percent and 1.8 percent, respectively, from December 31, 2014. Book value and tangible book value per share now stand at $90.81 and $73.94, respectively. Excluding unfavorable foreign currency movement, book value per share and tangible book value per share increased 2.4 percent and 3.0 percent, respectively.
The bulletin noted that “year-over-year results were adversely impacted by foreign exchange in the period, and a number of favorable items from the prior year that did not repeat. In the prior year, North American P&C underwriting income was favorably impacted by $25 million of premium-related items.
“Life underwriting income was favorably impacted in the prior year due to a non-recurring $6 million reserve adjustment. In addition, 2014 benefited from lower taxes of $16 million related to prior period development emerging in lower tax jurisdictions. These items and foreign exchange had a negative impact of $0.18 per share on operating income.”
Chairman and CEO Evan G. Greenberg commented: “ACE’s first quarter earnings per share were essentially flat with prior year – a good result for a global, dollar-based insurer. We overcame unfavorable foreign exchange movement and a number of favorable items from prior year to produce after-tax operating income of $745 million, or $2.25 per share.
“Our earnings benefited from excellent underwriting and investment income results, highlighted by a P&C combined ratio of 88.4 percent and investment income that was flat with prior year. We generated an operating ROE of nearly 11 percent while per share book and tangible book value grew 2.4 percent and 3 percent, respectively, in constant dollars. Foreign exchange negatively impacted per share book value by 1.5 points.
“Global P&C net premiums written grew 5 percent on a constant-dollar basis with the strong dollar taking about five percentage points off our company’s premium growth. We obviously have the headwinds of foreign exchange, an underwriting environment that continues to grow more competitive for our commercial P&C businesses, as well as low interest rates. Given our excellent diversification by product, geography and consumer segment, many areas of our business present attractive growth prospects, particularly in the U.S., Latin America and Asia, and as a result we expect our premium revenue growth for the balance of the year to be in the mid-single digits on a published basis.”
Source: ACE Limited
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