But company beat expectations and says it is confident
ACE reported net income down from $746m to $535m for its second quarter but beat analysts’ worst fears.
Second Quarter Summary
- Net income $535m ($746m) half year: $1,102m ($ 1,123m)
- Net profit -$171m ($8m) half year: -$273m (-$340m)
- Income $706m ($738m) half year: $1,375m ($1,463m)
- Net P&C premiums written and earned, which include international accident and health (A&H), decreased 5%.
- Combined ratio 87.7% (87.8%)
- P&C pre-tax underwriting income $355m ($373m)
- Net loss reserves increased $192m
- Net investment income decreased 5% to $506m
- Invested assets increased 6% to $43.7bn.
Evan Greenberg, chairman and CEO said: “Recession, a strong US dollar and a competitive pricing environment impacted premium growth. For our portfolio of business, rates continued to firm and a number of our divisions benefited such as our ACE Tempest Re reinsurance franchise, where net premiums grew over 20% in the quarter.
“Moreover, many of our retail P&C insurance lines around the world experienced good growth as a result of continued customer flight to safety.
“We remain cautious given current economic and financial market conditions, but we are aggressively focused on execution, and we continue to make investments to expand our capabilities for the future.
“We are well positioned to build market share as insurance markets improve and economic growth slowly recovers.”
Better than expected
Reuters said the profit beat Wall Street expectations.
Bloomberg said Ace had switched is investments, quoting chief operating officer Philip Bancroft as saying: “With a strong recovery in global equity markets, we also liquidated the majority of our publicly traded equity holdings and invested the proceeds in higher-yielding corporate bonds,”
“The shifts in asset allocation will, with all else being equal, increase book yield and investment income.”
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