ACE’s catastrophe costs rise

ACE reported an extra $48m of catastrophe losses from late-quarter storms in Perth, Australia, and the northeastern United States but still boosted net income by 33% to $755m. Underwriting income fell 41% to $209m.

Financial highlights (2009 in brackets)

• Pre-tax underwriting income excluding Life $209m ($357m)
• Net income $755m ($567m)
• Net realised gains/losses $176 (-$102m)
• Income excluding net realized gains/losses $579m ($669m)
• Total catastrophe losses $173m including reinstatement premiums.
• Net after-tax catastrophe losses $149m ($34m)
• P&C combined ratio 92.8% 87.5%
• Accident year combined ratio excluding catastrophe losses 90.2% (88.6%)

Key sector figures

• Insurance-North American: Net premiums written remained flat. The combined ratio was 90.7% compared with 88.2%.
• Insurance-Overseas General: Net premiums written increased 7%. Adjusting for the impact of foreign exchange, they remained flat. The combined ratio was 95.0% compared with 88.7%.
• Global Reinsurance: Net premiums written increased 3%. The combined ratio was 78.8% compared with 63.0%.
• Life: Net premiums written increased 11%. Operating income increased to $72m compared with $53m.

Evan Greenberg, chairman and chief executive officer, said: “While the quarter was marked by an unusually large number of natural catastrophes globally, we recorded an excellent combined ratio of 92.8%, with catastrophe losses representing about six points on the combined ratio and less than 1% of book value.

“I believe this demonstrates ACE's underwriting discipline, risk management, and broad product and geographic diversification.

“We face the challenging effects of a slow economic recovery as well as a competitive insurance market. The fundamentals of our company, however, are good and we are well positioned.

“We had a current accident year combined ratio excluding catastrophes of 90.2% and grew net premiums written 4%, aided by a steady customer renewal retention rate of 88% and a positive foreign exchange impact.

“In spite of the challenging economic and market conditions, we see meaningful opportunity in many places around the world where we have both capability and presence.”