ACE: Q4 Net $665 Million; $2.3 Billion Full Year; Conference Today, Details

January 31, 2007

Bermuda-based ACE Limited reported strong fourth quarter and full year net earnings of $665 million – $1.99 per common share – and $2.305 billion respectively. Full year net operating income was $2.351 million; earnings per share reached $7.05.

Earnings for 2006 improved substantially, compared to the $236 million Q4 net income posted in 2005 and the $1.028 billion for the full year. ACE’s Q4 combined ratio was 88.2 percent. Annualized return on average equity for the quarter was 19 percent.

President and CEO Evan Greenberg commented: “The quarter was an excellent finish to an outstanding year. Book value grew by over 20 percent and our return on equity exceeded 18 percent. While market conditions continue to soften and we remain firmly committed to underwriting discipline, we are a large organization with a broad capability and tremendous geographic reach. This creates opportunity for growth without compromising our underwriting standards. We are well positioned to continue our growth in book value for the foreseeable future.”

ACE’s report also cited the following “earning highlights:
— P&C net premiums written increased 9 percent over the prior year quarter (4 percent after adjusting for a transaction described below) and full year was 2 percent.
— P&C net premiums earned increased 6 percent over the prior year quarter and full year was 0.4 percent.
— The combined ratio was 88.1 percent for the year compared with 99.5 percent in 2005; for the quarter, the combined ratio was 88.2 percent.
— P&C underwriting income was $1.4 billion for the full year and $347 million for the fourth quarter.
— Operating cash flow amounted to $4.1 billion for the year and $804 million for the fourth quarter.
— Invested assets increased by $4.8 billion or 15 percent during the year to $37.2 billion.
— Net investment income increased 21 percent for the quarter and 27 percent for the year to $1.6 billion.
— Shareholders’ equity increased 21 percent for the year to $14.3 billion.
— Tangible equity (1) rose to $11.5 billion, an increase of 27 percent from year-end 2005.
— Return on average equity for 2006 was 18.5 percent; excluding FAS 115, it was 19.2 percent.(3)

The complete report and additional comments, including references to the notes give above may be obtained on the Company’s web site at:

ACE will host its year-end, fourth quarter earnings conference call and webcast today, Wednesday, January 31, 2007, beginning at 8:30 a.m. ET. The earnings conference call will be available via live and archived webcast on the web site. Refer to the Investor Information section and access Calendar of Events for details. Alternatively, you may call 800-289-0572 (in the United States) or 913-981-5543 (international); passcode 9865344. A replay of the call will be available from approximately 11:30 a.m. ET on Wednesday, January 31, 2007 until Wednesday, February 28, 2007. To listen to the replay, dial: 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 9865344.

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