ACE Reports Second Quarter Operating Income of USD 788 Million

18 August 2015 —
ACE Limited today reported net income for the quarter ended June 30, 2015, of USD 2.86 per share, compared with USD 2.28 per share for the same quarter last year. Operating income was USD 2.40 per share, compared with USD 2.42 per share for the same quarter last year. Operating return on equity for the quarter was 11.4%. The property and casualty (P&C) combined ratio for the quarter was 87.7%. Book value per share increased 0.5% from March 31, 2015, to USD 91.27. Book value per share growth was primarily impacted by rising interest rates that resulted in unrealized losses of USD 672 million, after-tax, in the company's investment portfolio, which are recorded in other comprehensive income on the balance sheet. The unrealized losses were partially offset by favorable foreign currency movement in the quarter and realized gains related to the company's variable annuity reinsurance business, which together amounted to USD 205 million, after-tax. Tangible book value per share decreased 1.5% from March 31, 2015, to USD 72.84, compared with the prior year, and was impacted by goodwill and intangibles related to the Fireman's Fund acquisition that closed during the quarter. Excluding the impact of the acquisition, tangible book value per share increased 0.5%.

For the six months ended June 30, 2015, net income was USD 4.91 per share, compared with USD 4.43 per share for 2014. Operating income was USD 4.64 per share, compared with USD 4.69 per share for 2014. The P&C combined ratio for the six months ended June 30, 2015, was 88.0% versus 88.2% prior year. Book value and tangible book value per share increased 1.4% and 0.3%, respectively, from December 31, 2014. Book value and tangible book value per share growth were negatively impacted by unrealized losses in the investment portfolio and unfavorable foreign currency movement during the year. Excluding foreign currency movement, book value per share increased 2.5%. Excluding foreign currency movement and the Fireman's Fund acquisition that closed during the year, tangible book value per share increased 3.2%.

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: "ACE had an excellent second quarter with earnings per share essentially flat with prior year as a strong dollar impacted both revenue and earnings. After-tax operating income was USD 788 million, or USD 2.40 per share, leading to an operating ROE of 11.4%. We produced strong underwriting results marked by a P&C combined ratio of 87.7% and underwriting income that was flat with prior year and up 5.5% in constant dollars. Investment income was up 3% in constant currency - a terrific result given the interest rate environment. Global P&C net premiums written grew about 6.5%, or over 13% when adjusted for foreign exchange, as we took advantage of growth opportunities in the U.S., Asia and Latin America.

"The highlight of the quarter was our announced agreement to acquire Chubb. We are moving quickly and the senior leadership of both companies has formed teams that are already engaged in integration planning. The sense of excitement and energy from the leadership of both companies is inspiring. We are planning to file an S-4 by the end of the month and are on track to file our regulatory approvals. In sum, I am even more convinced of the potential opportunity our combined companies represent in terms of talent and capabilities." Read the full story

ACE Reports Second Quarter Operating Income of USD 788 Million
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