ACE's 2012 profit after tax up 76%

ACE Group’s 2012 profit after tax was $2.7bn (£1.71bn), up from $1.54bn the year before.

The combined operating ratio (COR) improved by 0.8 percentage points to 93.9% (2011: 94.7%).

Group gross written premium (GWP) increased 3.7% to $21.6bn (2011: $20.8bn).

The global (re)insurer’s 2011 results were hit by the heavy burden of natural catastrophes in that year, including the earthquakes in Japan and New Zealand. There was a far lighter catastrophe burden in 2012, despite Superstorm Sandy, which hit the US east coast in October 2012.

ACE chief executive Evan Greenberg (pictured) described the 93.9% COR as “an excellent underwriting result, particularly given the worst drought conditions in the US in 25 years, as well as the losses from Sandy”.

Global business

ACE’s overseas general insurance (GI) arm, which comprises its non-US business, wrote $7.7bn of GWP for the 2012 year, up 3% from $7.46bn in 2011. The same division’s 2012 profit after tax was $1bn, up 39% from £721m in 2011.

The overseas GI division had a 2012 COR of 89.7%, down from 94.5% in 2011.

Greenberg said: “Even with the impact of Superstorm Sandy, we produced over $490m of operating income and increased book value per share 2%. These results continue to demonstrate the strength of our underwriting culture and balance sheet, and the benefits of our globally diversified business.

“For our company, a continued focus on underwriting discipline, enhanced through the use of portfolio management and data analytics, is contributing significantly to both our premium growth and underwriting profitability, and we expect this discipline will continue to make a notable difference in our results going forward.”

2013 guidance

ACE also revealed that it expects 2013 operating income to be between $6.60 a share and $7.00 a share. The estimate includes $475m of pre-tax catatsrophe losses, in line with last year’s catastrophe loss expectations.