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ACE Reports Third Quarter 2010 Net Income of $675 Million, Up 37%
ZURICH, Switzerland – 28 October, 2010 - ACE Limited (NYSE: ACE) reported net income for the quarter ended September 30, 2010, of $1.97 per share, compared with $1.46 per share for the same quarter last year.(1) Income excluding net realized gains (losses) was $2.01 per share, compared with $2.07 per share for the same quarter last year.(2) Book value increased $1.4 billion during the quarter, up 7% from June 30, 2010. Book value per share now stands at $67.34. Annualized operating return on average equity for the quarter was 13.4%.(3) The property and casualty (P&C) combined ratio for the quarter was 88.4%.
|
Third Quarter Summary | |||||||||||||||||||||||||
|
(in millions, except per share amounts) (Unaudited) | |||||||||||||||||||||||||
|
(Per Share - Diluted) | |||||||||||||||||||||||||
|
2010 |
2009 |
Change |
2010 |
2009 |
Change | ||||||||||||||||||||
|
Net income |
$ |
675 |
$ |
494 |
37 |
% |
$ |
1.97 |
$ |
1.46 |
35 |
% | |||||||||||||
|
Net realized gains (losses), net of tax |
(13 |
) |
(207 |
) |
NM |
(0.04 |
) |
(0.61 |
) |
NM |
|||||||||||||||
|
Income excluding net realized gains |
|||||||||||||||||||||||||
|
(losses), net of tax (2) |
$ |
688 |
$ |
701 |
(2 |
)% |
$ |
2.01 |
$ |
2.07 |
(3 |
)% | |||||||||||||
Net income for the nine months ended September 30, 2010, was $6.18 per share, compared with $4.73 per share for 2009. For the nine months ended September 30, 2010, income excluding net realized gains (losses) was $5.73 per share, compared with $6.16 per share for 2009. Book value increased $3.2 billion, up 16% during the nine months ended September 30, 2010. The P&C combined ratio for the nine months ended September 30, 2010, was 90.2%.
|
Nine Months Summary | |||||||||||||||||||||
|
(in millions, except per share amounts) (Unaudited) | |||||||||||||||||||||
|
(Per Share - Diluted) | |||||||||||||||||||||
|
2010 |
2009 |
Change |
2010 |
2009 |
Change | ||||||||||||||||
|
Net income |
$ |
2,107 |
$ |
1,596 |
32 |
% |
$ |
6.18 |
$ |
4.73 |
31 |
% | |||||||||
|
Net realized gains (losses), net of tax |
152 |
(480 |
) |
NM |
0.45 |
(1.43 |
) |
NM |
|||||||||||||
|
Income excluding net realized gains |
|||||||||||||||||||||
|
(losses), net of tax (2) |
$ |
1,955 |
$ |
2,076 |
(6 |
)% |
$ |
5.73 |
$ |
6.16 |
(7 |
)% | |||||||||
Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had a very strong third quarter with good earnings contributions from all of our principal businesses. Our book value per share grew 7% in the quarter and is up 15% for the year. For the quarter, after-tax operating income was $688 million while our P&C combined ratio was 88.4%. Our annualized operating ROE was over 13% for the quarter and nine months.
“In the quarter and in recent days we made a number of announcements related to acquisitions we are making to advance our strategies around the globe. Rain and Hail, the premier crop insurer in the United States; Jerneh Insurance Berhad, a Malaysian P&C company; and the Hong Kong and Korea life insurance operations of New York Life illustrate our focus on growing our P&C specialty business, expanding our non-life and life presence in the Asia region and complementing our organic growth with acquisitions – all at attractive returns.
“Based on our strong results for nine months and positive outlook for the fourth quarter, we are raising our full-year 2010 operating earnings guidance from $6.25 to $6.75 per share to $7.20 to $7.40 per share.”
Operating highlights for the quarter ended September 30, 2010, were as follows (1):
- Net premiums written increased 4% and net premiums earned increased 1%. Excluding the impact of foreign exchange, net premiums written increased 5% and net premiums earned increased 1%.
- Total catastrophe losses were $97 million including reinstatement premiums compared with $45 million for the third quarter of 2009. Approximately $50 million was from the earthquake in New Zealand. Net after-tax catastrophe losses were $86 million compared with $38 million for the third quarter of 2009.
- Favorable prior period development pre-tax, excluding the Life segment, was $201 million, compared with $203 million in 2009.
- The P&C combined ratio was 88.4% compared with 88.1% last year.
- P&C underwriting income was $352 million compared with $359 million in 2009.
- Operating cash flow was $1.1 billion for the quarter and $2.8 billion for the year.
- Net loss reserves increased $337 million. Excluding foreign exchange valuation, net loss reserves increased $38 million. For the year, net loss reserves increased $233 million excluding foreign exchange valuation.
- Net investment income increased 1% to $516 million.
- Annualized operating return on average equity was 13.4% for the quarter and 13.1% for the year.(3)
- Book value per share(4) increased 7% from $63.20 at June 30, 2010, to $67.34, and increased 15% from $58.44 at December 31, 2009.
- Tangible book value per share(4) increased 8% from $51.88 at June 30, 2010, to $55.83, and increased 19% from $46.76 at December 31, 2009.
- Net realized and unrealized gains after tax from our investment portfolio totaled approximately $723 million.
Details of our financial results for our business segments are available in the ACE Limited Financial Supplement. Key segment items for the quarter ended September 30, 2010, include:
- Insurance-North American: Net premiums written increased 5%. The combined ratio was 90.2% compared with 91.3%.
- Insurance-Overseas General: Net premiums written were flat. Adjusting for the impact of foreign exchange, they increased 1%. The combined ratio was 86.0% compared with 87.4%.
- Global Reinsurance: Net premiums written increased 32%. The combined ratio was 74.3% compared with 58.5%.
- Life: Net premiums written were flat. Operating income was $72 million compared with $74 million.
Please refer to the ACE Limited Financial Supplement dated September 30, 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_sept_30_2010.xls
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), a component of the S&P 500 stock index, 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.acegroup.com.
ACE Limited
Investor Contact:
Helen M. Wilson, 441-299-9283
helen.wilson@acegroup.com
or
Media Contact:
Stephen M. Wasdick, 212-827-4444
stephen.wasdick@acegroup.com