ACE Reports First Quarter Operating Income of USD 745 million

12 May 2015 —
ACE Limited reported net income for the quarter ended March 31, 2015, of USD 2.05 per share, compared with USD 2.14 per share for the same quarter last year. Operating income was USD 2.25 per share, compared with USD 2.27 per share for the same quarter last year. Operating return on equity for the quarter was 10.8%. The property and casualty (P&C) combined ratio for the quarter was 88.4%. Book value and tangible book value per share increased 0.9% and 1.8%, respectively, from December 31, 2014. Book value and tangible book value per share now stand at USD 90.81 and USD 73.94, respectively. Excluding unfavorable foreign currency movement, book value per share and tangible book value per share increased 2.4% and 3.0%, respectively.

Year-over-year results were adversely impacted by foreign exchange in the period, as noted above, and a number of favorable items from the prior year that did not repeat. In the prior year, North American P&C underwriting income was favorably impacted by USD 25 million of premium-related items. Life underwriting income was favorably impacted in the prior year due to a non-recurring USD 6 million reserve adjustment. In addition, 2014 benefited from lower taxes of USD 16 million related to prior period development emerging in lower tax jurisdictions. These items and foreign exchange had a negative impact of USD 0.18 per share on operating income.

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: "ACE's first quarter earnings per share were essentially flat with prior year - a good result for a global, dollar-based insurer. We overcame unfavorable foreign exchange movement and a number of favorable items from prior year to produce after-tax operating income of USD 745 million, or USD 2.25 per share. Our earnings benefited from excellent underwriting and investment income results, highlighted by a P&C combined ratio of 88.4% and investment income that was flat with prior year. We generated an operating ROE of nearly 11% while per share book and tangible book value grew 2.4% and 3%, respectively, in constant dollars. Foreign exchange negatively impacted per share book value by 1.5 points.

"Global P&C net premiums written grew 5% on a constant-dollar basis with the strong dollar taking about five percentage points off our company's premium growth. We obviously have the headwinds of foreign exchange, an underwriting environment that continues to grow more competitive for our commercial P&C businesses, as well as low interest rates. Given our excellent diversification by product, geography and consumer segment, many areas of our business present attractive growth prospects, particularly in the U.S., Latin America and Asia, and as a result we expect our premium revenue growth for the balance of the year to be in the mid-single digits on a published basis."  Read the full story

ACE Reports First Quarter Operating Income of USD 745 million
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