Chubb Limited (CB) 8-K Financial statements and exhibits

ACE Limited

Financial Supplement

March 31, 2003

Investor Contact:	Helen M. Wilson (441) 299-9283	This report is for informational purposes only. It should be read in conjunction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
	(441) 292-8675 fax
	email: investorrelations@ace.bm

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

Any forward-looking statements made in this financial supplement reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Company’s forward-looking statements concerning reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience which differs from the Company’s assumptions, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative developments, litigation tactics, credit developments among reinsurers and other factors identified in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and in the Company’s earnings press release, which is available on the Company’s website. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ACE Limited

Financial Supplement Table of Contents

	Page
I. Financial Highlights	1
II. Consolidated Results
—  Consolidated Statements of Operations	2
—  Computation of Basic and Diluted Earnings Per Share	3
—  Summary Consolidated Balance Sheets	4
III. Segment Results
—  Consolidating Statement of Operations	5-6
—  Insurance—  North American	7
—  Premiums by Line of Business	8
—  Insurance—  Overseas General	9
—  Premiums by Line of Business	10
—  Key Components	11
—  Global Reinsurance	12
—  Premiums by Line of Business	13
—  Key Components	14
—  Corporate & Other	15
—  Consolidated Property and Casualty excluding Financial Services	16
—  Financial Services	17
—  Premiums by Line of Business	18
—  Key Component—Financial Guaranty Profile	19-21
—  Consolidated Results—Consecutive Quarters	22
—  Premiums by Line of Business	23
IV. Balance Sheet Details
—  Reinsurance Recoverable	24-26
—  Unpaid Loss and Loss Expenses	27
—  Asbestos and Environmental Reserves; September 11, 2001 Tragedy	28
—  Capital Structure	29
—  Investment Portfolio	30-31
—  Realized and Unrealized Gains (losses)	32
V. Reconciliation to Generally Accepted Accounting Principles
—  Regulation G, Non-GAAP Financial Measures	33
—  Consolidated Statement of Comprehensive Income	33
—  Reconciliation of Book Value Per Share to Diluted Book Value Per Share	34
VI. Glossary	35

ACE Limited

Financial Highlights

(in millions of U.S. dollars, except per share data and ratios)

(Unaudited)

	Three months ended March 31				% Change 1Q-03 vs. 1Q-02
	2003		2002
Gross premiums written	$	4,113	$	3,118	32%
Net premiums written	$	2,930	$	1,986	48%
Net premiums earned	$	2,072	$	1,360	52%
Net investment income	$	206	$	200	3%
Net operating income	$	279	$	216	29%
Net income	$	247	$	198	25%
Comprehensive income	$	345	$	113	205%
Operating cash flow	$	600	$	144	317%
P&C combined ratio: (1)
Loss and loss expense ratio		61.8%		60.0%
Underwriting and administrative expense ratio		28.8%		32.7%
Combined ratio		90.6%		92.7%
Annualized operating return on equity		16.7%		13.6%
Diluted earnings per share:
Net operating income	$	1.02	$	0.77	32%
Net income	$	0.90	$	0.70	29%
Diluted book value per share	$	25.14	$	23.78	6%
Diluted tangible book value per share	$	15.72	$	14.19	11%
Weighted average diluted shares outstanding		268.0		271.5

(1) Property and casualty operations only.

1

ACE Limited

Consolidated Statements of Operations

(in millions of U.S. dollars)

(Unaudited)

	Three months ended March 31						1Q-03 vs. 1Q-02
	2003			2002
Gross premiums written	$	4,113		$	3,118		32%
Net premiums written		2,930			1,986		48%
Net premiums earned		2,072			1,360		52%
Losses and loss expenses		1,283			853		50%
Life and annuity benefits		48			23		109%
Policy acquisition costs		296			198		49%
Administrative expenses		260			197		32%
Underwriting income		185			89		108%
Net investment income		206			200		3%
Other income (expense)		(6	)		5		NM
Interest expense		45			46		-2%
Income tax expense		61			32		91%
Net operating income		279			216		29%
Net realized gains (losses)		(40	)		(26	)
Tax effect of net realized gains (losses)		8			8
Net income	$	247		$	198		25%

2

ACE Limited

Computation of Basic and Diluted Earnings Per Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)

	Three months ended March 31
	2003			2002
Numerator:
Net operating income	$	279		$	216
Mezzanine equity dividend		(7	)		(7	)
Net operating income available to the holders of Ordinary Shares		272			209
Net realized gains (losses), net of income tax		(32	)		(18	)
Net income available to the holders of Ordinary Shares	$	240		$	191
Rollforward of Ordinary Shares:
Ordinary Shares—Beginning of period		262,679,356			259,861,205
Issued under ESPP		135,803			113,364
Restricted stock cancelled/granted		1,492,847			493,247
Issued for option exercises		183,813			1,429,617
Ordinary Shares—End of period		264,491,819			261,897,433
Denominator:
Weighted average shares outstanding		260,986,223			258,586,011
Dilutive effect of mezzanine equity		916,016			4,094,287
Effect of other dilutive securities		6,138,426			8,846,955
Adjusted weighted average shares outstanding and assumed conversions		268,040,665			271,527,253
Basic earnings per share:
Net operating income	$	1.04		$	0.81
Net realized gains (losses)		(0.12	)		(0.07	)
Net income	$	0.92		$	0.74
Diluted earnings (loss) per share:
Net operating income	$	1.02		$	0.77
Net realized gains (losses)		(0.12	)		(0.07	)
Net income	$	0.90		$	0.70

3

ACE Limited

Summary Consolidated Balance Sheets

(in millions of U.S. dollars)

	March 31 2003		December 31 2002		March 31 2002
Assets
	(Unaudited)		(Audited)		(Unaudited)
Fixed maturities available for sale, at fair value	$	15,044	$	14,420	$	12,796
Equity securities, at fair value		410		411		513
Securities on loan, at fair value		521		293		241
Short-term investments		2,081		1,885		1,648
Other investments, at fair value		685		652		552
Cash		477		663		820
Total investments and cash	$	19,218	$	18,324	$	16,570
Insurance and reinsurance balances receivable		3,228		2,654		3,162
Reinsurance recoverable		14,132		13,991		11,370
Deferred policy acquisition costs		915		832		725
Prepaid reinsurance premiums		1,790		1,721		1,463
Goodwill		2,711		2,717		2,772
Deferred tax assets		1,227		1,288		1,240
Other assets		2,235		1,924		1,432
Total assets	$	45,456	$	43,451	$	38,734
Liabilities
Unpaid losses and loss expenses	$	24,636	$	24,315	$	20,515
Unearned premiums		6,573		5,586		4,675
Future policy benefits for life and annuity contracts		459		442		405
Insurance and reinsurance balances payable		1,963		1,870		1,717
Contract holder deposit funds		89		90		97
Securities lending collateral		533		301		247
Accounts payable, accrued expenses and other liabilities		1,820		1,777		1,440
Short-term debt		146		146		399
Long-term debt		1,749		1,749		1,849
Trust preferred securities		475		475		875
Total liabilities	$	38,443	$	36,751	$	32,219
Mezzanine equity	$	311	$	311	$	311
Shareholders’ equity
Total shareholders’ equity, excl. AOCI		6,164	$	5,949	$	6,188
Accumulated other comprehensive income (AOCI)		538		440		16
Total shareholders’ equity	$	6,702	$	6,389	$	6,204
Total liabilities, mezzanine equity and shareholders’ equity	$	45,456	$	43,451	$	38,734
Diluted book value per share	$	25.14	$	24.16	$	23.78
Diluted tangible book value per share	$	15.72	$	14.56	$	14.19

4

ACE Limited

Consolidating Statement of Operations

Three months ended March 31, 2003

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General			Global Reinsurance		Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	1,664		$	1,406		$	462	$	—		$	3,532		$	532		$	4,064
Net premiums written		933			981			443		—			2,357			526			2,883
Net premiums earned		753			814			248		—			1,815			209			2,024
Losses and loss expenses		512			494			116		—			1,122			161			1,283
Policy acquisition costs		83			152			46		—			281			11			292
Administrative expenses		88			114			15		24			241			18			259
Underwriting income (loss)		70			54			71		(24	)		171			19			190
Life underwriting income		—			—			2		—			2			—			2
Net investment income—property and casualty		103			35			19		(9	)		148			51			199
Other income (expense)		(6	)		(1	)		1		—			(6	)		—			(6	)
Interest expense		8			—			—		35			43			2			45
Income tax expense (benefit)		39			23			4		(14	)		52			9			61
Net operating income (loss)		120			65			89		(54	)		220			59			279
Net realized gains (losses)		(18	)		(13	)		3		(9	)		(37	)		(3	)		(40	)
Tax effect of net realized gains (losses)		3			5			—		—			8			—			8
Net income (loss)	$	105		$	57		$	92	$	(63	)	$	191		$	56		$	247
Net premiums written/gross premiums written		56.1%			69.8%			95.9%		—			66.7%			98.9%			70.9%
Effective tax rate		24.5%			26.1%			4.3%		20.6%			19.1%			13.2%			17.9%
Loss and loss expense ratio		68.0%			60.7%			46.7%					61.8%			77.0%			63.4%
Policy acquisition cost ratio		11.0%			18.7%			18.6%					15.5%			5.2%			14.4%
Administrative expense ratio		11.6%			14.0%			6.0%					13.3%			8.6%			12.8%
Combined ratio		90.6%			93.4%			71.3%					90.6%			90.8%			90.6%

5

ACE Limited

Consolidating Statement of Operations

Three months ended March 31, 2002

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General			Global Reinsurance			Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	1,265		$	962		$	374		$	—		$	2,601		$	488		$	3,089
Net premiums written		513			614			355			—			1,482			476			1,958
Net premiums earned		473			509			115			—			1,097			234			1,331
Losses and loss expenses		327			292			39			—			658			195			853
Policy acquisition costs		42			114			17			—			173			18			191
Administrative expenses		71			86			6			23			186			10			196
Underwriting income (loss)		33			17			53			(23	)		80			11			91
Life underwriting income		—			—			4			—			4			—			4
Net investment income—property and casualty		102			21			24			(2	)		145			49			194
Other income (expense)		1			4			—			—			5			—			5
Interest expense		9			—			1			32			42			4			46
Income tax expense (benefit)		33			8			—			(18	)		23			9			32
Net operating income (loss)		94			34			80			(39	)		169			47			216
Net realized gains (losses)		(20	)		(5	)		(3	)		7			(21	)		(5	)		(26	)
Tax effect of net realized gains (losses)		8			1			—			—			9			(1	)		8
Net income (loss)	$	82		$	30		$	77		$	(32	)	$	157		$	41		$	198
Net premiums written/gross premiums written		40.6%			63.8%			94.9%			—			57.0%			97.5%			63.4%
Effective tax rate		26.0%			19.0%			0.0%			31.6%			12.0%			16.1%			12.9%
Loss and loss expense ratio		69.2%			57.3%			34.1%						60.0%			83.1%			64.1%
Policy acquisition cost ratio		8.9%			22.3%			14.3%						15.7%			7.9%			14.3%
Administrative expense ratio		15.0%			17.0%			5.6%						17.0%			4.3%			14.7%
Combined ratio		93.1%			96.6%			54.0%						92.7%			95.3%			93.1%

6

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03			4Q-02			3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02	Full Year 2002			Full Year 2001
Insurance—North American
Gross premiums written	$	1,664		$	1,640		$	1,783		$	1,428		$	1,265		32%	$	6,116		$	4,521
Net premiums written		933			819			869			718			513		82%		2,919			1,986
Net premiums earned		753			742			654			606			473		59%		2,475			1,816
Losses and loss expenses		512			1,024			453			396			327		57%		2,200			1,373
Policy acquisition costs		83			69			55			50			42		98%		216			206
Administrative expenses		88			97			86			87			71		24%		341			315
Underwriting income (loss)		70			(448	)		60			73			33		112%		(282	)		(78	)
Net investment income—property and casualty		103			100			101			103			102		1%		406			426
Other income (expense)		(6	)		1			—			(1	)		1				1			1
Interest expense		8			8			7			8			9				32			37
Income tax expense (benefit)		39			(119	)		41			41			33				(4	)		94
Amortization of goodwill		—			—			—			—			—				—			—
Net operating income (loss)		120			(236	)		113			126			94		28%		97			218
Net realized gains (losses)		(18	)		(92	)		(55	)		(32	)		(20	)			(199	)		(19	)
Tax effect of net realized gains (losses)		3			27			4			4			8				43			8
Net income (loss)	$	105		$	(301	)	$	62		$	98		$	82		28%	$	(59	)	$	207
Net premiums written/gross premiums written		56.1%			49.9%			48.7%			50.3%			40.6%				47.7%			43.9%
Effective tax rate		24.5%			33.5%			26.6%			24.6%			26.0%				-4.3%			30.1%
Loss and loss expense ratio		68.0%			137.9%			69.2%			65.4%			69.2%				88.9%			75.6%
Policy acquisition cost ratio		11.0%			9.4%			8.3%			8.3%			8.9%				8.7%			11.3%
Administrative expense ratio		11.6%			13.0%			13.2%			14.3%			15.0%				13.8%			17.4%
Combined ratio		90.6%			160.3%			90.7%			88.0%			93.1%				111.4%			104.3%
Large losses and other items:					(1	)												(1	)		(2	)
Large losses (before tax)	$	—		$	516		$	—		$	—		$	—			$	516		$	159
Large losses (after tax)	$	—		$	354		$	—		$	—		$	—			$	354		$	143
Excluding A&E charge:					(1	)
Underwriting income				$	68												$	234
Net operating income				$	118												$	451
Net income				$	53												$	295
Loss and loss expense ratio					68.4%													68.0%
Combined ratio					90.8%													90.5%

(1) Reported in press release on January 27, 2003.

(2) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes $18M of losses reported in the press release on July 18, 2001.

7

ACE Limited

Premiums By Line of Business; Insurance—North American

(in millions of U.S. dollars)

(Unaudited)

											% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02
Gross Premiums Written:
Property & casualty	$	1,594	$	1,593	$	1,752	$	1,398	$	1,241	28.4%	$	5,984	$	4,521
Life, accident & health		70		47		31		30		24	191.7%		132		—
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	1,664	$	1,640	$	1,783	$	1,428	$	1,265	31.5%	$	6,116	$	4,521
Net Premiums Written:
Property & casualty	$	900	$	797	$	854	$	700	$	495	81.8%	$	2,846	$	1,986
Life, accident & health		33		22		15		18		18	83.3%		73		—
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	933	$	819	$	869	$	718	$	513	81.9%	$	2,919	$	1,986
Net Premiums Earned:
Property & casualty	$	723	$	721	$	637	$	586	$	450	60.7%	$	2,394	$	1,812
Life, accident & health		30		21		17		20		23	30.4%		81		4
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	753	$	742	$	654	$	606	$	473	59.2%	$	2,475	$	1,816

8

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03			4Q-02			3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02		Full Year 2002			Full Year 2001
Insurance—Overseas General
Gross premiums written	$	1,406		$	1,203		$	1,008		$	941		$	962		46%		$	4,114		$	3,289
Net premiums written		981			796			690			616			614		60%			2,716			2,154
Net premiums earned		814			671			647			566			509		60%			2,393			1,941
Losses and loss expenses		494			372			446			345			292		69%	��		1,455			1,465
Policy acquisition costs		152			151			140			128			114		33%			533			445
Administrative expenses		114			108			107			89			86		33%			390			333
Underwriting income (loss) (1)		54			40			(46	)		4			17		218%			15			(302	)
Net investment income—property and casualty		35			31			28			28			21		67%			108			102
Other income (expense)		(1	)		(1	)		(1	)		—			4					2			(1	)
Interest expense		—			1			1			1			—					3			2
Income tax expense (benefit) (1)		23			(3	)		(4	)		5			8					6			(87	)
Amortization of goodwill		—			—			—			—			—					—			3
Net operating income (loss)		65			72			(16	)		26			34		91%			116			(119	)
Net realized gains (losses)		(13	)		(5	)		(21	)		(6	)		(5	)				(37	)		(5	)
Tax effect of net realized gains (losses)		5			2			7			2			1					12			2
Net income (loss)	$	57		$	69		$	(30	)	$	22		$	30		90%		$	91		$	(122	)
Net premiums written/gross premiums written		69.8%			66.2%			68.5%			65.5%			63.8%					66.0%			65.5%
Effective tax rate		26.1%			-4.3%			20.0%			16.1%			19.0%					4.9%			42.2%
Loss and loss expense ratio		60.7%			55.5%			68.9%			61.1%			57.3%					60.8%			75.5%
Policy acquisition cost ratio		18.7%			22.4%			21.8%			22.6%			22.3%					22.3%			22.9%
Administrative expense ratio (1)		14.0%			16.2%			16.5%			15.5%			17.0%					16.3%			17.2%
Combined ratio		93.4%			94.1%			107.2%			99.2%			96.6%					99.4%			115.6%
Large losses and other items:								(2	)										(2	)		(3	)
Large losses (before tax)	$	—		$	—		$	68		$	—		$	—				$	68		$	290
Large losses (after tax)	$	—		$	—		$	61		$	—		$	—				$	61		$	216

(1) Restated to include expenses reported as non-recurring in 2001.

(2) Reported in press release on September 18, 2002. Total after tax $90 million includes $61M in Overseas General and $29M in Global Reisurance.

(3) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes losses reported in the press release of January 8, 2002.

9

ACE Limited

Premiums By Line of Business; Insurance-Overseas General

(in millions of U.S. dollars)

(Unaudited)

	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02		% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	1,156	$	1,026	$	837	$	776	$	788	46.7%	$	3,427	$	2,680
Life, accident & health		250		177		171		165		174	43.7%		687		609
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	1,406	$	1,203	$	1,008	$	941	$	962	46.2%	$	4,114	$	3,289
Net Premiums Written:
Property & casualty	$	770	$	643	$	543	$	463	$	472	63.1%	$	2,121	$	1,633
Life, accident & health		211		153		147		153		142	48.6%		595		521
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	981	$	796	$	690	$	616	$	614	59.8%	$	2,716	$	2,154
Net Premiums Earned:
Property & casualty	$	633	$	510	$	489	$	433	$	385	64.4%	$	1,817	$	1,427
Life, accident & health		181		161		158		133		124	46.0%		576		511
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		3
	$	814	$	671	$	647	$	566	$	509	59.9%	$	2,393	$	1,941

10

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02		% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
Insurance—Overseas General
Gross Premiums Written:
ACE Global Markets	$	346	$	511	$	325	$	314	$	301	15.0%	$	1,451	$	1,179
ACE International		1,060		692		683		627		661	60.4%		2,663		2,110
Total	$	1,406	$	1,203	$	1,008	$	941	$	962	46.2%	$	4,114	$	3,289
Net Premiums Written:
ACE Global Markets	$	256	$	282	$	196	$	160	$	149	71.8%	$	787	$	712
ACE International		725		514		494		456		465	55.9%		1,929		1,442
Total	$	981	$	796	$	690	$	616	$	614	59.8%	$	2,716	$	2,154
Net Premiums Earned:
ACE Global Markets	$	248	$	177	$	181	$	159	$	145	71.0%	$	662	$	563
ACE International		566		494		466		407		364	55.5%		1,731		1,378
Total	$	814	$	671	$	647	$	566	$	509	59.9%	$	2,393	$	1,941
Net Premiums Written/Gross
Premiums Written:
ACE Global Markets		74.0%		55.2%		60.3%		51.0%		49.5%	49.5%		54.2%		60.4%
ACE International		68.4%		74.3%		72.3%		72.7%		70.3%	-2.8%		72.4%		68.3%
Total		69.8%		66.2%		68.5%		65.5%		63.8%	9.3%		66.0%		65.5%
Loss Ratio:
ACE Global Markets		61.2%		51.3%		69.7%		65.2%		51.7%	18.4%		59.7%		77.9%
ACE International		60.4%		56.9%		68.6%		59.5%		59.5%	1.5%		61.2%		74.5%
Total		60.7%		55.5%		68.9%		61.1%		57.3%	5.9%		60.8%		75.5%
Expense Ratio:
ACE Global Markets		36.7%		52.1%		46.8%		45.2%		55.2%	-33.5%		49.6%		46.4%
ACE International		30.9%		33.9%		35.0%		35.4%		33.0%	-6.4%		34.4%		37.1%
Total		32.7%		38.6%		38.3%		38.1%		39.3%	-16.8%		38.6%		39.7%
Combined Ratio:
ACE Global Markets		97.9%		103.4%		116.5%		110.4%		106.9%	-8.4%		109.3%		124.3%
ACE International		91.3%		90.8%		103.6%		94.9%		92.5%	-1.3%		95.6%		111.6%
Total		93.4%		94.1%		107.2%		99.2%		96.6%	-3.3%		99.4%		115.2%

11

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03		4Q-02		3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02	Full Year 2002			Full Year 2001
Global Reinsurance
Property and casualty
Gross premiums written	$	462	$	113	$	186		$	214		$	374		24%	$	887		$	460
Net premiums written		443		94		131			197			355		25%		777			354
Net premiums earned		248		218		194			150			115		116%		677			324
Losses and loss expenses		116		111		101			53			39		197%		304			317
Policy acquisition costs		46		40		37			29			17		171%		123			68
Administrative expenses		15		14		11			9			6		150%		40			29
Underwriting income (loss)		71		53		45			59			53		34%		210			(90	)
Life
Gross premiums written		49		50		58			28			29		69%		165			414
Net premiums written		47		47		57			27			28		68%		159			408
Net premiums earned		48		46		57			26			29		66%		158			406
Losses and loss expenses		48		52		60			23			23		109%		158			401
Policy acquisition costs		4		1		3			5			7		-43%		16			8
Administrative expenses		1		1		2			2			1		0%		6			2
Net investment income		7		8		7			6			6		17%		27			9
Underwriting income (loss)		2		—		(1	)		2			4		-50%		5			4
Net investment income—property and casualty		19		19		20			19			24		-21%		82			70
Other income (expense)		1		—		1			—			—				1			—
Interest expense		—		—		—			—			1				1			1
Income tax expense (benefit)		4		—		(1	)		2			—				1			(22	)
Amortization of goodwill		—		—		—			—			—				—			14
Net operating income (loss)		89		72		66			78			80		11%		296			(9	)
Net realized gains (losses)		3		—		(27	)		(27	)		(3	)			(57	)		(16	)
Tax effect of net realized gains (losses)		—		—		—			—			—				—			—
Net income (loss)	$	92	$	72	$	39		$	51		$	77		19%	$	239		$	(25	)
Net premiums written/gross premiums written		95.9%		83.2%		70.4%			92.1%			94.9%				87.6%			76.9%
Effective tax rate		4.3%		0.0%		-1.5%			2.5%			0.0%				0.3%			71.0%
Loss and loss expense ratio		46.7%		51.1%		52.0%			35.0%			34.1%				44.9%			97.7%
Policy acquisition cost ratio		18.6%		18.2%		19.2%			19.5%			14.3%				18.1%			21.0%
Administrative expense ratio		6.0%		6.5%		5.2%			6.3%			5.6%				5.9%			9.0%
Combined ratio		71.3%		75.8%		76.4%			60.8%			54.0%				68.9%			127.7%
Large losses and other items:						(1	)									(1	)		(2	)
Large losses (before tax)	$	—	$	—	$	32		$	—		$	—			$	32		$	273
Large losses (after tax)	$	—	$	—	$	29		$	—		$	—			$	29		$	238

(1) Reported in press release on September 18, 2002. Total after tax $90 million includes $61M in Overseas General and $29M in Global Reisurance.

(2) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes $37M of losses reported in the press release on July 18, 2001.

12

ACE Limited

Premiums By Line of Business; Global Reinsurance

(in millions of U.S. dollars)

(Unaudited)

											% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02
Gross Premiums Written:
Property & casualty	$	462	$	113	$	186	$	214	$	374	23.5%	$	887	$	460
Life, accident & health		49		50		58		28		29	69.0%		165		414
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	511	$	163	$	244	$	242	$	403	26.8%	$	1,052	$	874
Net Premiums Written:
Property & casualty	$	443	$	94	$	131	$	197	$	355	24.8%	$	777	$	354
Life, accident & health		47		47		57		27		28	67.9%		159		408
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	490	$	141	$	188	$	224	$	383	27.9%	$	936	$	762
Net Premiums Earned:
Property & casualty	$	248	$	218	$	194	$	150	$	115	115.7%	$	677	$	324
Life, accident & health		48		46		57		26		29	65.5%		158		406
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	296	$	264	$	251	$	176	$	144	105.6%	$	835	$	730

13

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

												% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
	1Q-03		4Q-02			3Q-02		2Q-02		1Q-02
Global Reinsurance—Property & Casualty
Gross Premiums Written:
Tempest Europe	$	123	$	34		$	36	$	67	$	93	32.3%	$	230	$	120
Tempest USA		100		86			69		47		32	212.5%		234		69
Tempest Bermuda		239		(7	)		81		100		249	-4.0%		423		271
	$	462	$	113		$	186	$	214	$	374	23.5%	$	887	$	460
Net Premiums Written:
Tempest Europe	$	115	$	18		$	27	$	57	$	80	43.8%	$	182	$	53
Tempest USA		99		86			69		47		32	209.4%		234		69
Tempest Bermuda		229		(10	)		35		93		243	-5.8%		361		232
	$	443	$	94		$	131	$	197	$	355	24.8%	$	777	$	354
Net Premiums Earned:
Tempest Europe	$	69	$	45		$	38	$	37	$	22	213.6%	$	142	$	60
Tempest USA		86		69			53		36		24	258.3%		182		42
Tempest Bermuda		93		104			103		77		69	34.8%		353		222
	$	248	$	218		$	194	$	150	$	115	115.7%	$	677	$	324
Net premiums written/grosspremiums written
Tempest Europe		93.5%		52.9%			75.0%		85.1%		86.0%	8.7%		79.1%		44.2%
Tempest USA		99.0%		100.0%			100.0%		100.0%		100.0%	-1.0%		100.0%		100.0%
Tempest Bermuda		95.8%		142.9%			43.2%		93.0%		97.6%	-1.8%		85.3%		85.6%
		95.9%		83.2%			70.4%		92.1%		94.9%	1.0%		87.6%		77.0%

14

ACE Limited

Segment—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03			4Q-02			3Q-02 (3)			2Q-02 (3)			1Q-02			% Change vs 1Q-02	Full Year 2002			Full Year 2001
Corporate & Other (1)
Administrative expenses	$	24		$	31		$	29		$	27		$	23		4%	$	110		$	94
Underwriting income (loss)		(24	)		(31	)		(29	)		(27	)		(23	)	4%		(110	)		(94	)
Net investment income (2)		(9	)		(7	)		(3	)		(1	)		(2	)			(13	)		5
Other income (expense) (3)		—			—			(15	)		(11	)		—				(26	)		—
Interest expense (2)		35			36			37			40			32				145			142
Income tax expense (benefit)		(14	)		(17	)		(21	)		(21	)		(18	)			(77	)		(76	)
Amortization of goodwill		—			—			—			—			—				—			58
Net operating income (loss)		(54	)		(57	)		(63	)		(58	)		(39	)			(217	)		(213	)
Net realized gains (losses)		(9	)		(1	)		(55	)		(30	)		7				(79	)		(14	)
Tax effect of net realized gains (losses)		—			—			—			—			—				—			—
Net income (loss)	$	(63	)	$	(58	)	$	(118	)	$	(88	)	$	(32	)		$	(296	)	$	(227	)
Effective tax rate		20.6%			23.0%			25.0%			26.6%			31.6%				26.2%			26.3%

(1) Includes ACE Limited and ACE INA Holdings

(2) Net of intercompany eliminations

(3) Other income (expense) in Q2 and Q3 of 2002 represents debt prepayment expense. The tax effect in 2Q-02 was $4M and 3Q-02 was $5M.

15

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03			4Q-02			3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02	Full Year 2002			Full Year 2001
Consolidated Property and Casualty Excluding Financial Services
Gross premiums written	$	3,532		$	2,956		$	2,977		$	2,583		$	2,601		36%	$	11,117		$	8,270
Net premiums written		2,357			1,709			1,690			1,531			1,482		59%		6,412			4,494
Net premiums earned		1,815			1,631			1,495			1,322			1,097		65%		5,545			4,081
Losses and loss expenses		1,122			1,507			1,000			794			658		71%		3,959			3,155
Policy acquisition costs		281			260			232			207			173		62%		872			719
Administrative expenses		241			250			233			212			186		30%		881			771
Underwriting income (loss)		171			(386	)		30			109			80		114%		(167	)		(564	)
Life underwriting income (loss)		2			—			(1	)		2			4				5			4
Net investment income—property and casualty		148			143			146			149			145		2%		583			603
Other income (expense)		(6	)		—			(15	)		(12	)		5				(22	)		—
Interest expense		43			45			45			49			42				181			182
Income tax expense (benefit)		52			(139	)		15			27			23				(74	)		(91	)
Amortization of goodwill		—			—			—			—			—				—			75
Net operating income (loss)		220			(149	)		100			172			169		30%		292			(123	)
Net realized gains (losses)		(37	)		(88	)		(158	)		(95	)		(21	)			(362	)		(54	)
Tax effect of net realized gains (losses)		8			19			11			6			9				45			10
Cumulative effect of adopting a new acct’ standard		—			—			—			—			—				—			—
Net income (loss)	$	191		$	(218	)	$	(47	)	$	83		$	157		22%	$	(25	)	$	(167	)
Net premiums written/gross premiums written		66.7%			57.8%			56.8%			59.3%			57.0%				57.7%			54.3%
Effective tax rate		19.1%			48.3%			13.0%			13.6%			12.0%				-33.9%			42.5%
Loss and loss expense ratio		61.8%			92.4%			66.8%			60.1%			60.0%				71.4%			77.3%
Policy acquisition cost ratio		15.5%			15.9%			15.6%			15.7%			15.7%				15.7%			17.6%
Administrative expense ratio		13.3%			15.4%			15.6%			16.0%			17.0%				15.9%			18.9%
Combined ratio		90.6%			123.7%			98.0%			91.8%			92.7%				103.0%			113.8%

16

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	1Q-03			4Q-02		3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02	Full Year 2002			Full Year 2001
Financial Services
Gross premiums written		532		$	238	$	493		$	318		$	488		9%	$	1,537		$	1,481
Net premiums written		526			228		476			317			476		11%		1,497			1,461
Net premiums earned		209			292		373			228			234		-11%		1,127			1,429
Losses and loss expenses		161			257		328			167			195		-17%		947			1,397
Policy acquisition costs		11			14		18			22			18		-39%		72			58
Administrative expenses		18			15		15			17			10		80%		57			56
Underwriting income (loss)		19			6		12			22			11		73%		51			(82	)
Net investment income		51			51		46			46			49		4%		192			173
Other income		—			1		—			—			—				1			1
Interest expense		2			2		3			3			4				12			17
Income tax expense		9			6		7			8			9				30			21
Amortization of goodwill		—			—		—			—			—				—			4
Net operating income		59			50		48			57			47		26%		202			50
Net realized gains (losses)		(3	)		—		(77	)		(45	)		(5	)			(126	)		(4	)
Tax effect of net realized gains (losses)		—			—		19			9			(1	)			26			(2	)
Cumulative effect of adopting a new acct' standard		—			—		—			—			—				—			(23	)
Net income (loss)	$	56		$	50	$	(10	)	$	21		$	41		37%	$	102		$	21
Net premiums written/gross premiums written		98.9%			95.8%		96.6%			99.7%			97.5%				97.4%			98.6%
Effective tax rate		13.2%			10.7%		12.7%			12.3%			16.1%				12.9%			29.6%
Loss and loss expense ratio		77.0%			88.2%		88.0%			73.2%			83.1%				84.0%			97.8%
Policy acquisition cost ratio		5.2%			5.0%		4.6%			9.6%			7.9%				6.4%			4.0%
Administrative expense ratio		8.6%			4.6%		4.2%			7.4%			4.3%				5.0%			3.9%
Combined ratio		90.8%			97.8%		96.8%			90.2%			95.3%				95.4%			105.7%
Large losses and other items:
Loss portfolio transfers**	$	—		$	99	$	187		$	25		$	—			$	311		$	642
September 11, 2001 tragedy (before and after tax)																			$	147	(1)

** Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued at 100% loss ratio.

(1) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K).

17

ACE Limited

Premiums By Line of Business; Financial Services

(in millions of U.S. dollars)

(Unaudited)

	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02		% Change 1Q-03 vs. 1Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	—	$	—	$	—	$	—	$	—	—	$	—	$	—
Life, accident & health		—		—		—		—		—	—		—		—
Financial guaranty		121		97		147		82		65	86.2%		391		292
Financial solutions		411		141		346		236		423	-2.8%		1,146		1,189
	$	532	$	238	$	493	$	318	$	488	9.0%	$	1,537	$	1,481
Net Premiums Written:
Property & casualty	$	—	$	—	$	—	$	—	$	—	—	$	—	$	—
Life, accident & health		—		—		—		—		—	—		—		—
Financial guaranty		120		96		146		82		63	90.5%		387		284
Financial solutions		406		132		330		235		413	-1.7%		1,110		1,177
	$	526	$	228	$	476	$	317	$	476	10.5%	$	1,497	$	1,461
Net Premiums Earned:
Property & casualty	$	—	$	—	$	—	$	—	$	—	—	$	—	$	—
Life, accident & health		—		—		—		—		—	—		—		—
Financial guaranty		88		81		46		81		74	18.9%		282		352
Financial solutions		121		211		327		147		160	-24.4%		845		1,077
	$	209	$	292	$	373	$	228	$	234	-10.7%	$	1,127	$	1,429

18

ACE Limited

Segment—Key Component

Financial Guaranty Profile

Through its Financial Services segment, the Company is an active participant in the financial guaranty market. The Company’s financial guaranty exposure comprises exposure to municipal and non-municipal obligations. At March 31, 2003, the Company had total financial guaranty exposure outstanding of $82.6 billion of which 60.0 percent represented exposure to municipal obligations and 40.0 percent to non-municipal obligations.

The financial guaranty portfolio is broadly diversified by payment source, geographic location, and maturity schedule. The Company limits its exposure to losses by underwriting primarily investment grade obligations. The following details the composition of the Company’s financial guaranty business:

	March 31, 2003				December 31, 2002
Sector	Par Outstanding		%	Average Rating	Par Outstanding		%	Average Rating
	(in millions of U.S. dollars)
Municipal Exposure:
Tax backed	$	19,614	23.8%	A+	$	19,637	24.0%	A+
Municipal utilities		10,523	12.7%	A+		10,390	12.7%	A+
Special revenue		8,536	10.3%	A		8,596	10.5%	A
Healthcare		5,494	6.7%	A		5,798	7.1%	A
Structured municipal(1)		3,378	4.1%	AAA		3,523	4.3%	AAA
Other municipal(2)		1,980	2.4%	A-		2,151	2.7%	A-
Total Municipal		49,525	60.0%	A		50,095	61.3%	A
Non-Municipal Exposure:
Senior layer CDOs(3)	$	13,680	16.6%	AA+	$	12,727	15.6%	AA+
Consumer receivables(4)		9,018	10.9%	A		8,388	10.3%	A
Single name corporate CDS		4,283	5.2%	A+		4,454	5.4%	A+
Commercial receivables(5)		3,826	4.6%	A		3,464	4.2%	A+
Other structured finance(6)		1,685	2.0%	A+		2,051	2.5%	A
Funded equity CDOs(3)		580	0.7%	NM		586	0.7%	NM
Total Non-Municipal		33,072	40.0%	AA-		31,670	38.7%	AA-
Total Exposure	$	82,597	100%		$	81,765	100.0%

(1) Structured Municipal: includes excess of loss reinsurance on portfolios of municipal credits where the Company attached in excess of the AAA rating level.

(2) Other Municipal: primarily includes first mortgage bonds on investor-owned utilities and government-sponsored project finance.

(3) For ACE, collateralized debt obligations (CDOs) are structured financings backed by a pool of investment grade assets. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches. Market supply and demand factors influence pricing and the amount and position in the structure where ACE chooses to participate.

(4) Consumer Receivables: principally includes auto loan receivables, residential mortgage-backed securities and credit card receivables.

(5) Commercial Receivables: principally includes equipment leases and commercial mortgage-backed securities.

(6) Other Structured Finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.

19

ACE Limited

Segment—Key Component

Financial Guaranty Profile

The greatest proportion of the Company’s municipal financial guaranty exposure (23.7%), comprises general obligation bonds that are supported by the issuer’s taxing authority and of special revenue bonds and other special obligations of states and local governments that are supported by the issuer’s ability to impose and collect fees and charges for public services or specific projects. Maturities for municipal obligations can range from one to 30 years, with the average maturity in the 12-15 year range. The weighted average credit quality of the municipal portfolio was A as of March 31, 2003.

The Company’s non-municipal exposure includes exposure to asset-backed obligations, including those backed by consumer receivables, commercial receivables and collateralized debt obligations (“CDOs”) as well as single name corporate obligations. Legal maturities for non-municipal transactions range from 1-30 years. Maturities of single name corporate credit default swaps (CDS) range from 1-5 years with an average maturity of 1.8 years. The weighted average credit quality of the non-municipal portfolio was AA- as of March 31, 2003.

The Company conducts its financial guaranty business by entering into insurance and reinsurance arrangements as well as CDS. Exposure to CDS included in total exposure amounted to $21.5 billion and $20.7 billion at March 31, 2003 and December 31, 2002, respectively. The Company’s principal CDS exposure is to CDOs and single name corporate obligations. The preponderance of the Company’s CDO exposure is highly rated senior layer CDOs. Senior Layer CDOs are structured with first loss protection in the form of subordination or over collateralization so that the Company’s risk typically attaches at or above the AAA rating level. The Company also participates in Funded Equity CDO transactions wherein a substantial portion of the Company’s exposure is mitigated by premium. Rate on line for such transactions is typically 75%-85% of the total exposure.

Ratings distributions of the Company’s senior layer CDOs and single name corporate credit default swaps as of March 31, 2003 are shown below:

	A	AA	AAA	BBB	BIG
Senior Layer CDOs	7.2%	15.5%	70.2%	6.2%	0.9%
Single Name Corporate CDS	49.7%	18.5%	17.3%	11.1%	3.4%

20

ACE Limited

Segment—Key Component

Financial Guaranty Profile

Because credit default swaps are considered derivative transactions under FAS 133, the Company is required to mark-to-market its outstanding exposure at each financial reporting date. This is in contrast to the accounting treatment for a similar risk that is written as an insurance contract and is required in spite of the fact that the Company does not trade its credit default swap positions. Rather, its business is analogous to a buy and hold strategy. The mark-to-market adjustment reflects the estimated cost to the Company to purchase mirror protection on its outstanding exposures and is not an estimate of expected losses incurred. Expected losses are provided for in outstanding loss reserves, which the Company believes are adequate. In the first quarter, the Company recorded a FAS 133 mark-to-market loss before tax of $2.1 million.

The following table summarizes the Company's scheduled outstanding credit default swap portfolio by year as of March 31, 2003:

($ billions)	2003		2004		2005		2006		2007		Thereafter
Senior Layer CDOs
Beginning Outstanding Par	13.7		13.6		13.1		10.6		7.7		7.2
Runoff Amount	(0.1	)	(0.5	)	(2.5	)	(2.9	)	(3.4	)	(7.2	)
Ending Outstanding Par	13.6		13.1		10.6		7.7		4.3		0.0
Single Name Corporate CDS
Beginning Outstanding Par	4.3		3.1		2.4		1.2		1.0		0.4
Runoff Amount	(1.2	)	(0.7	)	(1.2	)	(0.3	)	(0.8	)	(0.4	)
Ending Outstanding Par	3.1		2.4		1.2		1.0		0.2		0.0
Funded Equity CDOs
Beginning Outstanding Par	0.6		0.6		0.6		0.6		0.4		0.1
Runoff Amount	0.0		0.0		0.0		(0.2	)	(0.3	)	(0.1	)
Ending Outstanding Par	0.6		0.6		0.6		0.4		0.1		0.0

21

ACE Limited

Consolidated Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

ACE Limited Consolidated

	1Q-03			4Q-02			3Q-02			2Q-02			1Q-02			% Change 1Q-03 vs. 1Q-02	Full Year 2002			Full Year 2001
Gross premiums written	$	4,064		$	3,194		$	3,470		$	2,901		$	3,089		32%	$	12,654		$	9,751
Net premiums written		2,883			1,937			2,166			1,848			1,958		47%		7,909			5,955
Net premiums earned		2,024			1,923			1,868			1,550			1,331		52%		6,672			5,510
Losses and loss expenses		1,283			1,764			1,328			961			853		50%		4,906			4,552
Policy acquisition costs		292			274			250			229			191		53%		944			777
Administrative expenses (1)		259			265			248			229			196		32%		938			827
Underwriting income (loss)		190			(380	)		42			131			91		109%		(116	)		(646	)
Life underwriting income (loss)		2			—			(1	)		2			4				5			4
Net investment income—property and casualty		199			194			192			195			194		3%		775			776
Other income (expense) (2)		(6	)		1			(15	)		(12	)		5				(21	)		1
Interest expense		45			47			48			52			46		-2%		193			199
Income tax expense (benefit) (1)		61			(133	)		22			35			32				(44	)		(70	)
Amortization of goodwill		—			—			—			—			—				—			79
Net operating income (loss)		279			(99	)		148			229			216		29%		494			(73	)
Net realized gains (losses)		(40	)		(88	)		(235	)		(140	)		(26	)			(489	)		(58	)
Tax effect of net realized gains (losses)		8			19			30			15			8				72			8
Cumulative effect of adopting a new acct' standard		—			—			—			—			—				—			(23	)
Net income (loss)	$	247		$	(168	)	$	(57	)	$	104		$	198		25%	$	77		$	(146	)
Net premiums written/gross premiums written		70.9%			60.6%			62.4%			63.7%			63.4%				62.5%			61.1%
Effective tax rate		17.9%			57.3%			12.9%			13.3%			12.9%				-9.8%			49.0%
Loss and loss expense ratio		63.4%			91.8%			71.0%			62.0%			64.1%				73.5%			82.6%
Policy acquisition cost ratio		14.4%			14.3%			13.4%			14.8%			14.3%				14.2%			14.1%
Administrative expense ratio (1)		12.8%			13.7%			13.3%			14.7%			14.7%				14.0%			15.0%
Combined ratio		90.6%			119.8%			97.7%			91.5%			93.1%				101.7%			111.7%
Large losses and other items:					(3	)		(4	)									(3	)(4)		(5	)
Large losses (before tax)	$	—		$	516		$	100		$	—		$	—			$	616		$	862
Large losses (after tax)	$	—		$	354		$	90		$	—		$	—			$	444		$	744
Operating cash flow	$	600		$	833		$	1,020		$	427		$	144			$	2,424		$	1,353

(1) Restated to include expenses reported as non-recurring in 2001.

(2) Other income (expense) in Q2 and Q3 of 2002 represents debt prepayment expense. The tax effect in 2Q-02 was $4M and 3Q-02 was $5M.

(3) Reported in press release January 27, 2003.

(4) Reported in press release on September 18, 2002. Total after tax $90 million includes Overseas General and Global Reisurance.

(5) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount includes losses reported in the press release on July 18, 2001 and January 8, 2002.

22

ACE Limited

Premiums By Line of Business

(in millions of U.S. dollars)

(Unaudited)

ACE Limited Consolidated

	1Q-03		4Q-02		3Q-02		2Q-02		1Q-02		% Change 1Q-03 vs. 1Q-02		Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	3,212	$	2,732	$	2,774	$	2,388	$	2,404	33.6	%	$	10,298	$	7,661
Life, accident & health		369		274		261		223		226	63.3	%		984		1,023
Financial guaranty		121		97		147		82		65	86.2	%		391		292
Financial solutions		411		141		346		236		423	-2.8	%		1,146		1,189
	$	4,113	$	3,244	$	3,528	$	2,929	$	3,118	31.9	%	$	12,819	$	10,165
Net Premiums Written:
Property & casualty	$	2,113	$	1,534	$	1,528	$	1,360	$	1,322	59.8	%	$	5,744	$	3,973
Life, accident & health		291		222		219		198		188	54.8	%		827		929
Financial guaranty		120		96		146		82		63	90.5	%		387		284
Financial solutions		406		132		330		235		413	-1.7	%		1,110		1,177
	$	2,930	$	1,984	$	2,223	$	1,875	$	1,986	47.5	%	$	8,068	$	6,363
Net Premiums Earned:
Property & casualty	$	1,604	$	1,449	$	1,320	$	1,169	$	950	68.8	%	$	4,888	$	3,563
Life, accident & health		259		228		232		179		176	47.2	%		815		921
Financial guaranty		88		81		46		81		74	18.9	%		282		352
Financial solutions		121		211		327		147		160	-24.4	%		845		1,080
	$	2,072	$	1,969	$	1,925	$	1,576	$	1,360	52.4	%	$	6,830	$	5,916

23

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Net Reinsurance Recoverable by Division

	March 31, 2003												December 31, 2002
	Brandywine (Runoff)			Westchester (Runoff)			Active Operations			Total			Brandywine (Runoff)			Westchester (Runoff)			Active Operations			Total
Rein. recoverable on paid losses & loss expenses	$	397		$	25		$	950		$	1,372		$	385		$	27		$	951		$	1,363
Rein. recoverable on unpaid losses & loss expenses		5,218			496			7,997			13,711			5,237			491			7,839			13,567
Gross reinsurance recoverable		5,615			521			8,947			15,083			5,622			518			8,790			14,930
Bad debt reserve		(473	)		(29	)		(449	)		(951	)		(478	)		(30	)		(431	)		(939	)
Net reinsurance recoverable	$	5,142		$	492		$	8,498		$	14,132		$	5,144		$	488		$	8,359		$	13,991

As illustrated in the table above, it is important to consider the composition of the recoverable balance and the related exposures in three components: Brandywine, Westchester and Active Operations recoverable. Active operations include the run-off operations of CIS. Additional information on reinsurance recoverable on a consolidated basis and for active operations for December 31, 2002 can be found on pages 25 and 26, respectively.

The Company's obligations with respect to further funding of the Brandywine runoff are limited pursuant to the Brandywine Restructuring Order under an $800 million aggregate excess of loss reinsurance agreement. (Refer to the "Asbestos and Environmental Claims" section of the "Management's Discussion and Analysis of Financial Conditions and Results of Operations" incorporated into our recently filed Form 10-K for the year ended December 31, 2002 for additional information about the order and other Company obligations.) At December 31, 2002, approximately $466 million in losses and recoverable bad debt reserves were ceded to the aggregate excess of loss reinsurance agreement leaving a remaining limit of approximately $334 million.

As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At December 31, 2002, the remaining limit in the reinsurance cover was approximately $600 million.

The remaining balance of reinsurance recoverable consist of recoverables primarily associated with active operations.

Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

	March 31, 2003					December 31, 2002
Category	Gross		Bad Debt	% of Gross		Gross		Bad Debt	% of Gross
General Collections (1)	$	848	54	6.4	%	$	848	43	5.1	%
Other (2)		524	333	63.5	%		515	335	65.0	%
Total	$	1,372	387	28.2	%	$	1,363	378	27.7	%

(1) General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or credit issues. We provide bad debt reserves based primarily on the application of historical loss experience to credit categories and historical dispute statistics.

(2) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees. In addition, we also consider any information we may have regarding the reinsurers plans to dispute amounts recoverable and make judgements based on our knowledge and experience regarding the specific items in dispute.

24

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Consolidated Reinsurance Recoverable

	December 31, 2002
Categories	Recoverable		Bad Debt		% of Gross
Top 10 reinsurers	$	7,732	$	93	1.2	%
Other reinsurers balances >$20 million		2,519		175	6.9	%
Other reinsurers balances <$20 million		1,590		148	9.3	%
Mandatory pools and government agencies		771		4	0.5	%
Structured settlements		730		3	0.4	%
Captives		786		4	0.5	%
Other		802		512	63.8	%
Total Recoveries	$	14,930	$	939	6.3	%

At December 31, 2002, $10.5 billion of consolidated recoverables were from rated reinsurers, of which 95% were rated A- or better by Standard & Poor’s.

Top 10 Reinsurers	Other Reinsurers Balances >$20 million
AXA	ABB Group	Independence Blue Cross (Amerihealth)
Berkshire Hathaway Insurance Group	Allianz Group	IRB—Brasil Resseguros S.A.
EQUITAS	Allstate Financial	Liberty Mutual Insurance Companies
GE Global Insurance Group	American International Group	Markel Corporation Group
Hannover Re	Aviva plc	Overseas Partners Ltd.
Lloyd’s of London	Chubb Group of Insurance Companies	PartnerRe Group
Munich Re	CNA Insurance Companies	PMA Capital Insurance Company
SCOR Group	Converium Group	RenaissanceRe Holdings Ltd
Swiss Re Group	DaimlerChrysler Group	Royal & Sun Alliance Insurance Group plc
Zurich Financial Services Group	Dominion Ins. Co. Ltd.	Sompo Japan Insurance Inc
	Dorinco Reinsurance Co.	St. Paul Companies
	Everest Re Group	Toa Reinsurance Company
	Excess & Casualty Reinsurance Assocation	Travelers Property Casualty Group
	Fairfax Financial	Trenwick Group
	FM Global Group	White Mountains Insurance Group
	Gerling Group	XL Capital Group
	Hartford Insurance Group

Classification of reinsurer balances excludes any consideration of related collateral or offsetting balances.

25

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Reinsurance Recoverable for Active Operations

	December 31, 2002
Categories	Recoverable		Bad Debt		% of Gross
Top 10 reinsurers	$	4,044	$	60	1.5%
Other reinsurers balances >$20 million		1,384		87	6.3%
Other reinsurers balances <$20 million		1,152		76	6.6%
Mandatory pools and government agencies		738		4	0.5%
Structured settlements		367		1	0.4%
Captives		744		4	0.5%
Other		361		199	55.1%
Total Recoveries	$	8,790	$	431	4.9%

At December 31, 2002, $5.8 billion of the active operations' recoverables were from rated reinsurers, of which 95% were rated A- or better by Standard & Poor's. At December 31, 2002, the $8.8 billion gross balance includes government pools of $738 million and structured settlements with recourse of $367 million, both of which present very limited collectibility exposure. The Company held collateral of $2.1 billion, of which $1.6 billion was matched and usable against existing recoverables.

Top 10 Reinsurers	Other Reinsurers Balances>$20 million
AXA	ABB Group	Hartford Insurance Group
Berkshire Hathaway Insurance Group	Allianz Group	Independence Blue Cross (Amerihealth)
GE Global Insurance Group (Employers Re)	Allstate Financial	IRB—Brasil Resseguros S.A.
Hannover Re	American International Group	Liberty Mutual Insurance Companies
Lloyd’s of London	Aviva plc	Markel Corporation Group
Munich Re	Chubb Group of Insurance Companies	Overseas Partners Ltd.
SCOR Group	CNA Insurance Companies	PMA Capital Insurance Group
Swiss Re Group	Converium Group	RenaissanceRe Holdings Ltd
Zurich Financial Services Group	DaimlerChrysler Group	Royal & Sun Alliance Insurance Group plc
XL Capital Group	Dorinco Reinsurance Co.	Sompo Japan Insurance Inc
	EQUITAS	St. Paul Companies
	Everest Re Group	Toa Reinsurance Company
	Excess & Casualty Reinsurance Assocation	Trenwick Group
	Fairfax Financial

Classification of reinsurer balances exclude consideration of related collateral or offsetting balances.

26

ACE Limited

Reconciliation of Unpaid Losses and Loss Expenses

(in millions of U.S. dollars)

(Unaudited)

	Total									Ongoing									Runoff (1)
	Unpaid Losses									Unpaid Losses									Unpaid Losses
	Gross			Recoverable			Net			Gross			Recoverable			Net			Gross			Recoverable			Net
Balance at December 31, 2001	$	20,728		$	10,629		$	10,099		$	13,001		$	5,381		$	7,620		$	7,236		$	4,757		$	2,479
Losses and loss expenses incurred		1,599			746			853			1,465			623			842			134			123			11
Losses and loss expenses paid		(1,792	)		(816	)		(976	)		(1,501	)		(686	)		(815	)		(291	)		(130	)		(161	)
Other (incl. foreign exch. revaluation)		(20	)		26			(46	)		(20	)		26			(46	)		—			—			—
Balance at March 31, 2002	$	20,515		$	10,585		$	9,930		$	12,945		$	5,344		$	7,601		$	7,079		$	4,750		$	2,329
Losses and loss expenses incurred		1,806			845			961			1,668			717			951			138			128			10
Losses and loss expenses paid		(1,739	)		(699	)		(1,040	)		(1,434	)		(574	)		(860	)		(305	)		(125	)		(180	)
Other (incl. foreign exch. revaluation)		79			26			53			79			26			53									—
Balance at June 30, 2002	$	20,661		$	10,757		$	9,904		$	13,258		$	5,513		$	7,745		$	6,912		$	4,753		$	2,159
Losses and loss expenses incurred		2,177			849			1,328			2,166			843			1,323			11			6			5
Losses and loss expenses paid		(1,348	)		(586	)		(762	)		(1,173	)		(558	)		(615	)		(175	)		(28	)		(147	)
Other (incl. foreign exch. revaluation)		151			11			140			151			11			140			—			—			—
Balance at September 30, 2002	$	21,641		$	11,031		$	10,610		$	14,402		$	5,809		$	8,593		$	6,748		$	4,731		$	2,017
Losses and loss expenses incurred		4,530			2,766			1,764			2,400			1,115			1,285			2,130			1,651			479
Losses and loss expenses paid		(2,023	)		(851	)		(1,172	)		(1,628	)		(668	)		(960	)		(395	)		(183	)		(212	)
Other (incl. foreign exch. revaluation)		167			51			116			167			51			116									—
Balance at December 31, 2002	$	24,315		$	12,997		$	11,318		$	15,341		$	6,307		$	9,034		$	8,483		$	6,199		$	2,284
Losses and loss expenses incurred		2,390			1,107			1,283			2,365			1,104			1,261			25			3			22
Losses and loss expenses paid		(2,155	)		(984	)		(1,171	)		(1,910	)		(893	)		(1,017	)		(245	)		(91	)		(154	)
Other (incl. foreign exch. revaluation)		86			16			70			79			16			63			7			—			7
Balance at March 31, 2003	$	24,636		$	13,136		$	11,500		$	15,875		$	6,534		$	9,341		$	8,270		$	6,111		$	2,159

(1) The run off reserves primarily include Brandywine group, the Commercial Insurance Service—Middle Market Worker's Comp. reserves and the pre-1997 Westchester Specialty reserves. Prior year split between gross and ceded reserves and loss activity in ongoing and runoff categories has been revised to properly reflect intercompany reinsurance eliminations.

27

ACE Limited

Asbestos and Environmental Reserves; September 11, 2001 Tragedy

(in millions of U.S. dollars)

(Unaudited)

Consolidated Asbestos and Environmental:

	March 31, 2003				December 31, 2002
	Gross		Net		Gross		Net
Asbestos reserves	$	3,148	$	420	$	3,192	$	446
Environmental and other latent exposures		1,307		366		1,352		403
Total	$	4,455	$	786	$	4,544	$	849
Asbestos claim payments	$	44	$	26	$	284	$	118
Environmental and other latent exposure claim payments	$	45	$	37	$	311	$	195
Gross 3 year asbestos survival ratio at December 31, 2002						11.3x
Gross 1 year asbestos survival ratio at December 31, 2002						12.0x

September 11, 2001 Tragedy information as of March 31, 2003:

	Ultimate Losses		Paid to Date		Unpaid Losses
Gross losses	$	1,829	$	820	$	1,009
Reinsurance recoverable		1,179		558		621
Net losses	$	650	$	262	$	388
Recoveries
Billed to reinsurers	$	558
Collected		498
Current outstanding	$	60

28

ACE Limited

Capital Structure

(in millions of U.S. dollars)

	March 31 2003 (Unaudited)			December 31 2002 (Audited)			March 31 2002 (Unaudited)
Total short-term debt	$	146		$	146		$	399
Total long-term debt(1)	$	1,749		$	1,749		$	1,849
Total debt	$	1,895		$	1,895		$	2,248
Total trust preferreds(2)	$	475		$	475		$	875
Mezzanine equity(3)	$	311		$	311		$	311
Shareholders’ equity	$	6,702		$	6,389		$	6,204
Total capitalization	$	9,383		$	9,070		$	9,638
Tangible equity(4)	$	3,991		$	3,672		$	3,432
Leverage Ratios:
Debt/total capitalization		20.2	%		20.9	%		23.3	%
Debt plus preferreds/total capitalization		25.3	%		26.1	%		32.4	%
Debt/tangible equity		47.5	%		51.6	%		65.5	%
Debt plus preferreds and mezzanine equity/tangible equity		67.2	%		73.0	%		100.1	%

(1) $50 million of ACE INA subordinated notes due 2009 was repaid in both the second and third quarters of 2002. An additional $500 million of Senior Debt was issued by ACE Limited in March 2002.

(2) $400 million of ACE INA Rhino Preferred Securities due 2002 was repaid in the second and third quarters of 2002.

(3) The FELINE PRIDES are expected to convert in the second quarter of 2003.

(4) Tangible equity is equal to Shareholders’ equity less goodwill.

29

ACE Limited

Fixed Income Investment Portfolio

(in millions of U.S. dollars)

	March 31, 2003			December 31, 2002
Fixed maturities	$	15,044		$	14,420
Securities on loan		521			293
Short term investments		2,081			1,885
Cash		477			663
	$	18,123		$	17,261
	March 31, 2003 Market Value		% of Total	December 31, 2002 Market Value		% of Total
Allocation:
Treasury	$	859	4.7%	$	842	4.9%
Agency		1,074	5.9%		973	5.6%
Corporate		7,117	39.3%		6,459	37.3%
Mortgage-backed securities		3,415	18.8%		3,302	19.2%
Asset-backed securities		338	1.9%		352	2.0%
Municipal		1,220	6.7%		1,201	7.0%
Non-US		1,542	8.5%		1,584	9.2%
Cash & cash equivalent		2,558	14.2%		2,548	14.8%
Total	$	18,123	100.0%	$	17,261	100.0%
	March 31, 2003 Market Value		% of Total	December 31, 2002 Market Value		% of Total
Credit Quality:
AAA		8,808	48.6%		8,566	49.4%
AA		3,265	18.0%		2,880	16.7%
A		3,027	16.7%		2,920	17.0%
BBB		1,464	8.1%		1,314	7.6%
BB		697	3.8%		662	3.8%
B		791	4.4%		843	4.9%
Other		71	0.4%		76	0.6%
Total	$	18,123	100.0%	$	17,261	100%
Avg. duration of fixed maturities, adj. for int. rate swaps			3.1 years			3.1 years
Avg. market yield of fixed maturities			4.2%			4.4%
Avg. credit quality			AA			AA

30

ACE Limited

Investment Information at March 31, 2003

(in millions of U.S. dollars)

	March 31, 2003				December 31, 2002
	Market Value		Cost/ Amortized cost		Market Value		Cost/ Amortized cost
Fixed maturities	$	15,044	$	14,361	$	14,420	$	13,791
Equity securities		410		414		411		442
Securities on loan		521		494		293		286
Short term investments		2,081		2,081		1,885		1,885
Other investments		685		657		652		622
Cash		477		477		663		663
	$	19,218	$	18,484	$	18,324	$	17,689

Top 10 Exposures—Fixed Income Investments and Single Name Credit Default Swaps

	March 31, 2003
General Electric	$	287
General Motors		170
Citigroup Inc		168
Verizon Communications		143
AIG		118
Ford Motor Co		113
Merrill Lynch		110
Morgan Stanley		108
Goldman Sachs Group		101
HSBC Holdings Plc		100

	December 31, 2002
General Electric	$	258
General Motors		171
Citigroup Inc		154
Verizon Communications		127
AIG		123
Ford Motor Co		123
Bank of America		119
Wachovia Corp		106
Wells Fargo		105
JP Morgan Chase		105

31

ACE Limited

Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

Quarter ended March 31, 2003	Net Realized Gains (Losses)(1)			Net Unrealized Gains (Losses)			Net Impact
Investment Portfolio gains (losses)
Fixed maturities	$	12		$	56		$	68
Interest rate swaps		(9	)		—			(9	)
Equity securities		(50	)		34			(16	)
Equity and fixed income derivatives		—			—			—
Foreign exchange gains (losses)		9			—			9
Other		—			(2	)		(2	)
		(38	)		88			50
Credit default swaps (FAS 133 adjustment)		(2	)		—			(2	)
Total gains (losses)		(40	)		88			48
Income tax (expense) benefit		8			(9	)		(1	)
Net gains (losses)	$	(32	)	$	79		$	47

(1) Includes impairments of $18M for fixed maturities and $46M for equities.

Quarter ended March 31, 2002	Net Realized Gains (Losses)(2)			Net Unrealized Gains (Losses)			Net Impact
Investment Portfolio gains (losses)
Fixed maturities	$	(14	)	$	114		$	100
Interest rate swaps		7			—			7
Equity securities		(2	)		(4	)		(6	)
Equity and fixed income derivatives		(3	)		—			(3	)
Foreign exchange gains (losses)		(1	)		—			(1	)
Other		—			(6	)		(6	)
		(13	)		104			91
Credit default swaps (FAS 133 adjustment)		(13	)		—			(13	)
Total gains (losses)		(26	)		104			78
Income tax (expense) benefit		8			(20	)		(12	)
Net gains (losses)	$	(18	)	$	84		$	66

(2) Includes impairments of $16M for fixed maturities, $1M for equities.

32

ACE Limited

Reconciliation to Generally Accepted Accounting Principles

Regulation G—Non-GAAP Financial Measures

In presenting our operating results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important to an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. Net operating income (loss) is a common performance measurement and is defined as net income (loss) excluding net realized gains (losses) on investments, the tax effect of net realized gains (losses) on investments and the cumulative effect of adopting a new accounting standard, net of income tax. We believe this presentation of net operating income (loss) enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

We exclude net realized gains (losses) on investments from net operating income (loss) because the amount of these gains (losses) is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. The cumulative effect of adopting a new accounting standard is excluded from our calculation of net operating income (loss). We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Net operating income (loss) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

	1Q-03			4Q-02			3Q-02			2Q-02			1Q-02			Full Year 2002			Full Year 2001
Net income (loss), as reported	$	247		$	(168	)	$	(57	)	$	104		$	198		$	77		$	(146	)
Net realized gains (losses)		(40	)		(88	)		(235	)		(140	)		(26	)		(489	)		(58	)
Tax effect of net realized gains (losses)		8			19			30			15			8			72			8
Cumulative effect of adopting a new acct' standard		—			—			—			—			—			—			(23	)
Net operating income (loss)	$	279		$	(99	)	$	148		$	229		$	216		$	494		$	(73	)
Consolidated Statement of Comprehensive Income
Net income (loss)	$	247		$	(168	)	$	(57	)	$	104		$	198		$	77		$	(146	)
Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments		112			131			198			135			(106	)		358			65
Reclassification adjustment for net realized gains (losses) included in net income		(23	)		55			28			13			2			98			(16	)
Cumulative translation adjustment		26			(4	)		4			5			(5	)		—			(7	)
Income tax (expense) benefit related to other comprehensive income items		(17	)		(27	)		(69	)		(46	)		24			(118	)		(10	)
Other comprehensive income (loss)		98			155			161			107			(85	)		338			32
Comprehensive income (loss)	$	345		$	(13	)	$	104		$	211		$	113		$	415		$	(114	)

33

ACE Limited

Reconciliation to Generally Accepted Accounting Principles

(in millions of U.S. dollars, except share and per share data)

Reconciliation of Book Value Per Share to Diluted Book Value Per Share

	March 31, 2003		December 31, 2002		March 31, 2002
Shareholders' equity	$	6,702	$	6,389	$	6,204
Net proceeds from assumed conversions of options		226		138		362
Conversion of mezzanine equity		311		311		311
Numerator for diluted book value per share calculation		7,239		6,838		6,877
Less: goodwill		2,711		2,717		2,772
Numerator for diluted tangible book value per share	$	4,528	$	4,121	$	4,105
Ordinary Shares outstanding—end of period		264,491,819		262,679,356		261,897,433
Shares issued from assumed conversions of options		11,697,607		8,560,131		15,539,693
Shares issued on conversion of mezzanine equity		11,814,373		11,814,373		11,814,373
Denominator for diluted and diluted tangible book value		288,003,799		283,053,860		289,251,499
Book value per share	$	25.34	$	24.32	$	23.69
Diluted book value per share	$	25.14	$	24.16	$	23.78
Diluted tangible book value per share	$	15.72	$	14.56	$	14.19

34

ACE Limited

Glossary

Annualized operating return on equity:	Calculated using net operating income (loss) less mezzanine equity dividend divided by average shareholders’ equity for the period calculated. To annualize a quarterly rate multiply by four.
Combined ratio:	Sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial services operations.
Diluted book value per share:	Shareholder’s equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
Diluted tangible book value per share:	Shareholder’s equity and net assets from assumed conversions of outstanding in-the-money options less goodwill divided by shares outstanding plus the number of options assumed issued.
Effective tax rate:	Income tax expense divided by the sum of income tax expense and net operating income (loss).
Life underwriting income:	Net premium earned plus net investment income less future policy benefits, acquisition costs and administrative expenses.
Net operating income (loss):	Net income (loss) excluding net realized gains (losses) on investments, the tax effect of net realized gains (losses) on investments and the cumulative effect of adopting new accounting standards, net of income tax.
NM:	Not meaningful
Operating return on equity:	Calculated using net operating income (loss) less mezzanine equity dividend divided by average shareholders’ equity.
Property and casualty combined ratios:	Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios exclude life reinsurance business and financial services segment.
Tangible equity:	Calculated as shareholders’ equity less goodwill.
Total capitalization:	The sum of short-term debt, long-term debt, trust preferreds, mezzanine equity and shareholders’ equity.

35