ACE Limited reported that fully diluted net income per share totaled $1.22, which included after-tax net realized gains of $51 million for the third quarter.
This compared with a net loss of $0.24 per share for the quarter a year ago after considering $205 million in net realized losses. Income excluding net realized gains (losses) for the third quarter of 2003 was up 105 percent to a record $304 million, or $1.04 per share, compared with $148 million or $0.53 per share for the same quarter last year.
Net premiums written increased 4 percent to $2.3 billion for the quarter. Out of total net premiums written, consolidated property and casualty increased by 27 percent, while Financial Services declined 78 percent reflecting the erratic nature of production in this segment. Most of this decline was due to the absence of new loss portfolio transfer and equity CDO premium for the quarter.
Brian Duperreault, chairman and CEO of ACE Limited noted, “This was another excellent quarter for our company that once again demonstrated the growing strength of our organization, our global presence and diversified product capability. ACE recorded increased income before net realized gains (losses) in every operating segment for the quarter. We remain optimistic about business conditions for the balance of the year and beyond.”
Other operating highlights were as follows:
— The P/C combined ratio was 91.6 percent for the quarter compared with 98.0 percent a year ago
— Current quarter catastrophe losses totaled $42 million or 1.9 percent of P/C earned premiums for the quarter, compared with $100 million, or 6.7 percent of P/C earned premiums in the comparable quarter of 2002
— Operating cash flow amounted to $1.1 billion for the quarter
— Net investment income increased 9 percent to $216 million
Financial results improved over the prior year’s results for each segment. Key items include:
— Insurance-North American: Net premiums written rose 23 percent in the quarter and the combined ratio was 91.9 percent reflecting the positive contributions made by the major business units.
— Insurance-Overseas General: Net premiums written were up 26 percent as reported and 19 percent excluding the effect of foreign exchange. The foreign exchange impact on earnings was minimal. The segment’s combined ratio improved to 92.9 percent. The company is experiencing particularly strong results in its European and Asia Pacific operations.
— Global Reinsurance: Net premiums written were up 66 percent, a result of its continued strategy to diversify its reinsurance operations into a multi-line reinsurer. This segment had an excellent combined ratio of 75.0 percent in the quarter. The company is developing its casualty reinsurance market with segment net premium written year-to-date of $1 billion. They incurred catastrophe losses of $12 million in the quarter.
— Financial Services: Net premiums written were $105 million in the third quarter of 2003, principally arising from the Financial Guaranty business. Income excluding net realized gains (losses) was up 19 percent in the quarter. The segment had a $26 million pre-tax realized gain on its FAS 133 mark-to-market and reported a combined ratio of 89.5 percent for the third quarter.
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