HAMILTON, Bermuda, November 4, 1999 -- ACE Limited (NYSE: ACL, BSX: ACL) today reported income excluding net realized gains (losses) and non-recurring expenses for the fiscal 1999 third quarter ended September 30, 1999 of $72.5 million, or $0.37 per share, compared with $108.6 million, or $0.55 per share, for the same quarter in fiscal 1998. Net income for the fiscal 1999 third quarter was $14.8 million, or $0.08 per share, compared with $13.5 million, or $0.07 per share, 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 September 30, 1999 was $19.72.
On July 2, 1999, ACE completed the acquisition of the international and U.S. property and casualty businesses of CIGNA Corporation ("ACE INA") and accordingly, these consolidated financial results include the results of ACE INA from July 2, 1999, the date of acquisition.
Also on July 2, 1999, ACE announced it was changing its fiscal year-end from September 30 to December 31. This change was implemented retroactively to December 31, 1998 so that the 1999 fiscal year will be the twelve-month period ending December 31, 1999. This change has been reflected in this quarter ended September 30, 1999. As a result, the company has reported results for the three months ended September 30, 1999 and 1998 and for the nine months ended September 30, 1999 and 1998.
Commenting on the quarterly results, Brian Duperreault, chairman, president and chief executive officer of ACE noted: "Together with the rest of the insurance industry, ACE incurred losses resulting from a large number of catastrophic events in the third quarter. As previously announced, the effect on our net operating income for the quarter from catastrophic events was approximately $34.0 million after taxes. In addition, ACE recognized $3.9 million in one-time charges related to the acquisition of ACE INA. Excluding these events, income excluding net realized gains (losses) for the quarter, would have been $0.54 per share."
Mr. Duperreault continued: "We are pleased to include the results of the ACE INA Group for the first time. We are extremely satisfied with the positive changes that have taken place at ACE INA in the first three months and pleased that they have already contributed to the results of the ACE Group."
Gross premiums written during the quarter increased by 387.1 percent to $1.5 billion, compared with $317.0 million for the comparable quarter last year.
Net premiums written during the quarter increased 414.8 percent to $910.9 million compared with $177.0 million for the same quarter last year. Net premiums earned during the quarter were up 330.2 percent to $952.9 million from $221.5 million in the same quarter last year.
Gross premiums written for the nine months of fiscal 1999 were $2.5 billion compared to $1.0 billion for the same period last year, an increase of 140.5 percent.
For the nine months of fiscal 1999, net premiums written increased 125.1 percent to $1.6 billion compared to $730.1 million for the nine months of fiscal 1998. Net premiums earned for the nine months ended September 30, 1999 were $1.5 billion compared with $691.3 million for the same period last year, a 122.6 percent increase.
Net investment income, excluding net realized gains (losses), was $163.1 million for the fiscal 1999 third quarter, compared with $89.3 million for the same period last year, an 82.6 percent increase. For the nine months of fiscal 1999, net investment income, excluding net realized gains (losses) was $334.3 million compared with $260.6 million for the same period last year, a 28.3 percent increase. During the fiscal 1999 third quarter, ACE had net realized losses of $53.8 million compared with net realized losses of $54.2 million for the same quarter last year. For the nine months ended September 30, 1999, net realized losses were $11.2 million, compared with net realized gains of $160.9 million for the first three quarters of fiscal 1998.
The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients. The company conducts its business on a global basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: www.acelimited.com.