ACE Reports First Quarter 2010 Net Income of $755 Million, Up 33%

ZURICH, Switzerland - 29 April, 2010 - ACE Limited (NYSE: ACE) announced net income for the quarter ended March 31, 2010, of $2.22 per share, compared with $1.69 per share for the same quarter last year. Income excluding net realized gains (losses) was $1.70 per share, compared with $1.99 per share for the same quarter last year.  Net after-tax catastrophe losses in the first quarter of 2010 were $149 million, including reinstatement premiums, compared with $34 million for the first quarter of 2009. The total catastrophe losses are an increase from the $125 million in after-tax losses reported on March 18, entirely due to the addition of late-quarter storms in Perth, Australia, and the northeastern United States. Book value increased $969 million during the quarter, up 5% from December 31, 2009. Book value per share now stands at $60.94, an increase of 4%. Annualized operating return on average equity for the quarter was 12.0%.⁽³⁾ The property and casualty (P&C) combined ratio for the quarter was 92.8%.

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had a good first quarter and start to 2010. We produced strong operating results and grew book value per share by 4%. Our operating ROE was 12.0%.

“While the quarter was marked by an unusually large number of natural catastrophes globally, we recorded an excellent combined ratio of 92.8%, with catastrophe losses representing about six points on the combined ratio and less than 1% of book value. I believe this demonstrates ACE's underwriting discipline, risk management, and broad product and geographic diversification.

“We face the challenging effects of a slow economic recovery as well as a competitive insurance market. The fundamentals of our company, however, are good and we are well positioned. We had a current accident year combined ratio excluding catastrophes of 90.2% and grew net premiums written 4%, aided by a steady customer renewal retention rate of 88% and a positive foreign exchange impact. In spite of the challenging economic and market conditions, we see meaningful opportunity in many places around the world where we have both capability and presence.”

Operating highlights for the quarter ended March 31, 2010, were as follows:

• Net premiums written and earned increased 4% and 3%, respectively. Excluding the impact of foreign exchange, net premiums written increased 1% while net premiums earned decreased 1%.  
• The P&C combined ratio was 92.8% compared with 87.5% last year. The accident year combined ratio excluding catastrophe losses was 90.2% for 2010 and 88.6% in 2009.
• Total catastrophe losses were $173 million including reinstatement premiums. Net after-tax catastrophe losses were $149 million compared with $34 million for the first quarter of 2009. Losses from late-quarter storms in Perth, Australia, and the northeastern United States were $32 million after-tax.
• Favorable prior period development pre-tax was $96 million, including $41 million of 2009 crop insurance favorable development, compared with $68 million in 2009.
• The expense ratio excluding the impact of the annual crop insurance profit-sharing commission, catastrophe-related reinstatement premiums, and adjusted for foreign exchange, was 29.1% compared with 28.4% last year.
• Pre-tax underwriting income excluding Life was $209 million compared with $357 million in 2009.
• Operating cash flow was $823 million.
• Net loss reserves increased $28 million. Excluding foreign exchange valuation, net loss reserves increased $228 million.
• Net investment income remained flat at $504 million.
• Annualized operating return on average equity was 12.0%.⁽³⁾
• Book value per share⁽⁴⁾ increased 4% from $58.44 at December 31, 2009, to $60.94.
• Tangible book value per share⁽⁴⁾ increased 6% from $46.76 at December 31, 2009, to $49.48.
• Net realized and unrealized gains after tax from our investment portfolio totaled approximately $467 million.

Please refer to the ACE Limited Financial Supplement dated March 31, 2010, which is posted on the company's website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure. The URL reference is: http://media.corporate-ir.net/media_files/irol/10/100907/fin_supp_march_31_2010.xls.

ACE will host its first quarter earnings conference call and webcast on Thursday, April 29, 2010, beginning at 8:30 a.m. ET. The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 888-466-4587 (within the United States) or 719-325-2100 (international); passcode 4788766. Please refer to the ACE Limited website in the Investor Information section under Calendar of Events for details. A replay of the call will be available for approximately one month. To listen to the replay, dial: 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 4788766.

Celebrating 25 years of insuring progress, the ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE: ACE) the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com.

Contact Information

Investor Contact:
Helen M. Wilson                      (441) 299-9283           helen.wilson@acegroup.com

Media Contact:
Stephen M. Wasdick              (212) 827-4444           stephen.wasdick@acegroup.com