ACE Reports Q4 2013 Results (Excerpt)

ZURICH, Switzerland –  29 January, 2014 – ACE Limited (NYSE: ACE) reported net income for the quarter ended December 31, 2013, of $2.90 per share, compared with $2.22 per share for the same quarter last year.(1) Operating income was $2.39 per share, compared with $1.43 per share for the same quarter last year. Book value and tangible book value per share increased 2.2% and 3.0%, respectively, from September 30, 2013. Book value and tangible book value per share now stand at $84.83 and $68.93, respectively. Operating return on equity for the quarter was 12.1%. The property and casualty (P&C) combined ratio for the quarter was 89.3%.

·         Operating Income of $824 Million or $2.39 Per Share, Up 67%, P&C Net Premiums Written up 20% in Constant Dollars, and Operating Return on Equity of 12.1%

·         Record Full-Year Operating Income of $3.2 Billion, up 23%; Combined Ratio of 89.3% and 88%, Respectively, for Quarter and Year

·         Record full-year operating and net income of $9.35 per share and $10.92 per share, respectively

·         P&C current accident year combined ratio for the year excluding catastrophe losses was 90%, resulting in P&C underwriting income up 111%

·         Book value up 4.7% for the year, or 11.1% excluding unrealized losses, with operating ROE of 12.2%

·         Full-year net investment income of over $2.1 billion, down 1.7%             

For the year ended December 31, 2013, net income was $10.92 per share, compared with $7.89 per share for 2012. Operating income was $9.35 per share, compared with $7.65 per share for 2012. Book value increased $1.3 billion, up 4.7% from December 31, 2012, and tangible book value increased $865 million, up 3.8%, and up 6.5% excluding acquisitions. The P&C combined ratio for the year ended December 31, 2013, was 88.0%.

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had an excellent fourth quarter and a record year. Both our quarterly and annual results were driven by very strong premium revenue growth globally and an exceptional underwriting performance. Put simply, we are growing while achieving good margins – it’s about growth in areas where prices are attractive and securing improved terms including rate in areas where they’re not.

“Record full-year after-tax operating income was $3.2 billion or $9.35 per share, up 23%. At our core we are an underwriting company, and our P&C combined ratio for the year of 88% produced $1.8 billion of underwriting income, up over 110%. On a current accident year basis excluding catastrophe losses, which is an important way to assess the health of our underlying business, the P&C combined ratio was 90% for the year, almost three points better than 2012. Of course, like the rest of the industry, we benefited from light catastrophe losses during the year. In addition, we run our balance sheet prudently starting with our loss reserves, and as a consequence we also benefited from positive prior year reserve development.

“Complementing the excellent underwriting results and a product of our strong cash flow was net investment income of $2.1 billion, which was down less than 2% for the year – a good result given the low interest rate environment. Our record earnings produced a strong operating ROE of over 12% while per share book value grew 5% for the year, or 11% if you exclude the unrealized losses from our investment portfolio as interest rates rose.

“Excluding crop insurance, P&C net premiums written grew 11% last year on a constant-dollar basis. Premium growth in our commercial and specialty P&C businesses, in particular, continued to benefit from our underwriting portfolio management efforts as well as a favorable U.S. rate environment that has continued into the new year. We are off to a great start in January, and remembering we are in a risk business, I expect we will have a good year in 2014 as we continue to take advantage of the many growth opportunities we see around the globe including the U.S.”

Similar to the third quarter presentation and consistent with how management views the business, the results of the company’s agriculture business, given its size and nature, are identified separately from the balance of the company’s P&C business, which is called “global P&C.” Global P&C includes the company’s Insurance – North American P&C, Insurance – Overseas General and Global Reinsurance segments.

Please refer to the ACE Limited Financial Supplement, dated December 31, 2013, 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.

ACE Limited will hold its fourth quarter earnings conference call on Wednesday, January 29, 2014, beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live webcast at www.acegroup.com  or by dialing 888-300-2318 (within the United States) or 719-325-2325 (international), passcode 6526575. Please refer to the ACE Group website in the Investor Information section under Calendar of Events for details. A replay of the call will be available until Wednesday, February 12, 2014, and the archived webcast will be available for approximately one month. To listen to the replay, please dial 888-203-1112 (in the United States) or 719-457-0820 (international), passcode 6526575.

ACE Group is one of the world's largest multiline property and casualty insurers. With operations in 54 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information, along with the full text of this release, can be found at: www.acegroup.com

Contacts

ACE Limited

Investor Contact:

Helen M. Wilson, 441-299-9283

helen.wilson@acegroup.com

or

Media Contact:

Arnella J. Forde, 212-703-7066

arnella.forde@acegroup.com