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ACE Limited Reports Second Quarter Earnings

Hamilton, Bermuda 31 July, 2001 - ACE Limited

(NYSE:ACE, BSX:ACL.BH) today reported income excluding net realized gains (losses) and non-recurring expenses of $115.4 million for the quarter ended June 30, 2001 compared with $140.1 million for the same quarter in 2000 and earnings per share excluding net realized gains (losses)

and non-recurring expenses, after deducting preferred dividends, of$0.45 for the current quarter compared with $0.61 last year. Included

in the results for the second quarter of fiscal 2001 are certain non-recurring expenses amounting to $4.5 million, net of related income taxes. Net income for the quarter ended June 30, 2001 was

$131.5 million compared with $113.9 million in 2000 and earnings per share, after deducting preferred dividends, was $0.52 for the current

quarter compared with $0.49 for the same quarter last year. Earnings per share calculations above are based on the weighted average number

of shares calculated in accordance with FAS 128 on a diluted basis.

The fully diluted book value per share of the company at June 30, 2001 was $23.90.

Brian Duperreault, chairman and chief executive officer of ACE Limited commented: "This was really a very good quarter for us held

back only by an unusual number of catastrophes which adversely impacted us primarily in areas where we had a comparatively high

market penetration."

Mr. Duperreault continued: "We are actively taking advantage of a global recovery in insurance prices, which has permeated nearly every

sector of our business."

Gross premiums written during the quarter increased by 23 percent to $2.4 billion, compared with $2 billion for the comparable quarter

last year.

Net premiums written during the quarter increased by 21 percent to $1.5 billion compared with $1.2 billion for the same quarter last

year. Net premiums earned during the quarter increased to $1.4 billion

from $1.2 billion for the same quarter last year.

Gross premiums written for the first six months of fiscal 2001 were $5.0 billion compared with $3.9 billion for the same period last

year.

For the first six months of fiscal 2001, net premiums written increased to $3.2 billion compared with $2.7 billion for the first six

months of fiscal 2000. Net premiums earned for the six months ended June 30, 2001 were $2.8 billion compared with $2.3 billion for the

same period last year.

Net investment income, excluding net realized gains (losses), was $196 million for the fiscal 2001 second quarter, compared with $181

million for the same period last year. For the first six months of fiscal 2001, net investment income, excluding net realized gains (losses), was $401 million compared with $364 million for the same quarter last year. During the 2001 second quarter, ACE had net realized gains, net of tax, of $21 million, compared with net realized

losses of $26 million for the same quarter last year. For the six months ended June 30, 2001, net realized losses, net of tax, were $2 million, compared with net realized gains of $21 million for the six months ended June 30, 2000.

The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients. The ACE Group conducts its business on a global basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: www.acelimited.com.