Bermuda’s ACE Limited reported net income, including realized losses, for 2002 of $77 million, compared with a net loss of $146 million for 2001. The insurer’s net operating income for the full year was $511 million, compared with a loss of $69 million last year, which included “a loss of $559 million after tax related to the September 11, 2001 tragedy.”
“Net operating earnings per share for 2002 were $1.80 compared with a net operating loss per share of $0.40 per share for 2001. Earnings per share were $0.19 for the current year compared with a loss per share of $0.74 last year. The fully diluted book value per share of the Company at Dec. 31, 2002 was $24.16 compared with $23.59 at year-end 2001,” said the bulletin.
The year could have been better for ACE, but it reported a net operating loss of $99 million in the fourth quarter, due to a charge of $354 million related to prior year asbestos and environmental reserves. ACE reported net operating income of $42 million for the same quarter in 2001. The charge was part of the company’s $2.2 billion reserve strengthening. The remaining $1.86 billion is expected to come from reinsurance.
Brian Duperreault, chairman and CEO, noted, “The charge for prior years’ asbestos exposure overshadowed what was actually a very good year for ACE. Our core property and casualty business grew rapidly, generating significant cash flow and very satisfactory underwriting profitability. As planned, Life Reinsurance declined significantly and Financial Services, which we have always said is erratic, declined moderately.”
The company’s net premiums written increased 7 percent over the prior quarter a year ago, while P/C net premiums written (exclusive of Life Reinsurance and Financial Services) increased by 54 percent compared with the fourth quarter of 2001. Life Reinsurance and the Financial Services segments, however, declined 86 percent and 43 percent, respectively.
Net premiums written for the year ended December 31, 2002, increased by 27 percent compared with 2001. P/C net premiums written (excluding the Financial Services segment and the Life Reinsurance division) increased 43 percent over prior year levels.
ACE also said its “Net investment income rose to $202 million for the 2002 fourth quarter compared with $192 million in the prior year. For the full year, net investment income, excluding net realized losses, was $802 million compared with $785 million on the same basis for fiscal 2001. During the 2002 fourth quarter, ACE had net realized losses, net of tax, of $69 million, compared with net realized gains of $4 million for the same quarter in 2001. For the year ended Dec. 31, 2002, net realized losses, after taxes, were $417 million compared with net realized losses of $50 million for fiscal 2001.”
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