EXHIBIT 99.1
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[LOGO OF ACE] ace limited | | ACE Limited ACE Global Headquarters 17 Woodbourne Avenue Bermuda Hamilton HM 08 Bermuda | | PO Box 1015 Hamilton HM DX 441 295-5200main 441 292-8675fax www.acelimited.com | | News Release |
FOR IMMEDIATE RELEASE
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| | | Investor Contact: | | Helen M. Wilson (441) 299-9283 |
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| | | Media Contact: | | Anna Lowry (441) 278-6683 |
ACE Limited Reports first QUARTER RESULTS
HAMILTON, Bermuda, April 27, 2004 —ACE Limited (NYSE: ACE) today reported net income for the first quarter ended March 31, 2004 of $447 million or $1.53 per share, compared with net income of $247 million or $0.90 per share for the prior year. Income excluding net realized gains (losses) for the first quarter increased 47% to $411 million, or $1.40 per share, compared with $279 million or $1.02 per share for the same period a year ago. (1)
Brian Duperreault, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE continues to make progress on every front. We grew rapidly in our key businesses, improved our margins and strengthened our balance sheet. Tomorrow, the successful initial public offering of our Financial Guaranty business will be closed, putting ACE in the strongest position it has ever been in to face the new business opportunities that lie ahead.”
Other first quarter operating highlights were as follows:
| | • | Net premiums written increased 11% to $3.2 billion, reflecting P&C net premium growth of 26% |
| | • | The P&C combined ratio improved to 88.4% for the quarter compared with 90.6% a year ago |
| | • | Operating cash flow amounted to $1.2 billion for the quarter |
| | • | Cash and invested assets increased by $2.2 billion |
| | • | Net investment income increased 16% to $238 million, reflecting P&C net investment income growth of 19% |
| | • | Shareholders’ equity increased 6% from year-end to $9.4 billion and 40% over the prior year |
| | • | Tangible equity rose to $6.7 billion, a gain of 9% from year-end and 68% over the prior year |
| | • | Debt to total capital ratio fell to 16.1% from 16.9% at year-end 2003 |
| | • | Annualized return on equity for the quarter ended March 31, 2004 was 18.7%; excluding FAS 115, it was 20.4% |
| | • | Diluted book value per share as of March 31, 2004 increased 6% to $31.36(2) |
Financial results improved over the prior year’s results for virtually every business segment. Further details are available in the financial supplement. Key items include:
| | • | Insurance-North American: Net premiums written increased 30% and the combined ratio improved to 89.4%. |
| | • | Insurance-Overseas General: Net premiums written increased 22%. The segment’s combined ratio improved to 89.3%. |
| | • | Global Reinsurance: Net premiums written were up 28%. This segment had a combined ratio of 73.5%. |
| | • | Financial Services: Net income increased 48% for the quarter reflecting a combined ratio of 67.6%. |
On April 23, 2004 ACE offered approximately 65% of Assured Guaranty Ltd. to the public. The transaction will net approximately $1 billion to ACE in cash. ACE expects to use the net proceeds to support its property and casualty insurance operations and for general corporate purposes.
Please refer to the ACE Financial Supplement March 31, 2004, which is posted on the Company’s website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, financial guaranty portfolio, investment portfolio and capital structure. ACE’s website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports/fin_supp_March_31,_2004.xls. (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser’s URL address field.)
ACE Limited (NYSE: ACE) will host its first quarter 2004 earnings conference call and webcast on Wednesday, April 28, 2004 beginning at 8:30 a.m. EDT. The call is available via live and archived webcast atwww.acelimited.com or by dialing 1-973-582-2745. Please refer to our website in the “Investor Information, Calendar of Events” for details. A replay of the call will be available until Wednesday, May 12, 2004. To listen to the replay, dial: 1-877-519-4471 (in the United States) or 1-973-341-3080 (international); passcode 4664925.
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. A component of the Standard & Poor’s 500 stock index, The ACE Group conducts its business on a worldwide basis with operating subsidiaries in approximately 50 countries. Additional information can be found at:www.acelimited.com.
1Income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments is a common performance measurement. We believe this presentation 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 because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. This measure should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).
2Diluted book value per ordinary share is ordinary shareholders’ 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.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release 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 could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial and legislative developments, litigation tactics, the amount and timing of reinsurance recoverable, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in the Company’s filings with the Securities and Exchange Commission. 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.
(tables to follow)
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ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)
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| | | March 31
2004
| | December 31
2003
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| | | (Unaudited) | | |
Assets | | | | | | |
Total investments and cash | | $ | 26,189 | | $ | 24,008 |
Insurance and reinsurance balances receivable | | | 3,493 | | | 2,837 |
Reinsurance recoverable | | | 14,062 | | | 14,081 |
Other assets | | | 8,734 | | | 8,627 |
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Total assets | | $ | 52,478 | | $ | 49,553 |
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Liabilities | | | | | | |
Unpaid losses and loss expenses | | $ | 27,697 | | $ | 27,155 |
Unearned premiums | | | 6,930 | | | 6,051 |
Other liabilities | | | 8,454 | | | 7,512 |
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Total liabilities | | $ | 43,081 | | $ | 40,718 |
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Shareholders’ equity | | | | | | |
Total shareholders’ equity | | $ | 9,397 | | $ | 8,835 |
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Total liabilities, mezzanine equity and shareholders’ equity | | $ | 52,478 | | $ | 49,553 |
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Diluted book value per ordinary share(2) | | $ | 31.36 | | $ | 29.46 |
ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
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| | | Three Months Ended
March 31
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| | | 2004
| | | 2003
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Gross premiums written | | $ | 4,416 | | | $ | 4,113 | |
Net premiums written | | | 3,238 | | | | 2,930 | |
Net premiums earned | | | 2,600 | | | | 2,072 | |
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Losses and loss expenses | | | 1,542 | | | | 1,283 | |
Life and annuity benefits | | | 42 | | | | 48 | |
Policy acquisition costs | | | 365 | | | | 296 | |
Administrative expenses’ | | | 315 | | | | 260 | |
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Underwriting income (loss) | | | 336 | | | | 185 | |
Net investment income | | | 238 | | | | 206 | |
Other income (expense) | | | (17 | ) | | | (6 | ) |
Interest expense | | | 44 | | | | 45 | |
Income tax expense (benefit) | | | 102 | | | | 61 | |
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Income (loss) excluding net realized gains (losses)(1) | | | 411 | | | | 279 | |
Net realized gains (losses) | | | 57 | | | | (40 | ) |
Tax effect of net realized gains (losses) | | | (21 | ) | | | 8 | |
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Net income (loss) | | | 447 | | | | 247 | |
Preference shares dividend | | | (11 | ) | | | — | |
FELINE PRIDE dividend | | | — | | | | (7 | ) |
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Net income (loss) available to holders of ordinary shares | | $ | 436 | | | $ | 240 | |
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Diluted earnings per share: | | | | | | | | |
Income (loss) excluding net realized gains (losses)(1) | | | $1.40 | | | | $1.02 | |
Net income (loss) | | | $1.53 | | | | $0.90 | |
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Weighted average diluted shares outstanding | | | 284,289,568 | | | | 268,040,665 | |
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Loss and loss expense ratio | | | 60.5 | % | | | 63.4 | % |
Policy acquisition cost ratio | | | 14.1 | % | | | 14.4 | % |
Administrative expense ratio | | | 12.3 | % | | | 12.8 | % |
Combined ratio | | | 86.9 | % | | | 90.6 | % |
Ratios exclude life reinsurance business
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ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
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| | | Three Months Ended March 31
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| | | 2004
| | | 2003
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Gross Premiums Written | | | | | | | | |
Insurance—North American | | $ | 1,905 | | | $ | 1,664 | |
Insurance—Overseas General | | | 1,674 | | | | 1,406 | |
Global Reinsurance* | | | 629 | | | | 511 | |
Financial Services | | | 208 | | | | 532 | |
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Total | | $ | 4,416 | | | $ | 4,113 | |
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Net Premiums Written | | | | | | | | |
Insurance—North American | | $ | 1,212 | | | $ | 933 | |
Insurance—Overseas General | | | 1,198 | | | | 981 | |
Global Reinsurance* | | | 620 | | | | 490 | |
Financial Services | | | 208 | | | | 526 | |
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Total | | $ | 3,238 | | | $ | 2,930 | |
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Net Premiums Earned | | | | | | | | |
Insurance—North American | | $ | 1,007 | | | $ | 753 | |
Insurance—Overseas General | | | 1,034 | | | | 814 | |
Global Reinsurance* | | | 380 | | | | 296 | |
Financial Services | | | 179 | | | | 209 | |
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Total | | $ | 2,600 | | | $ | 2,072 | |
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Income (Loss) Excluding Net Realized Gains (Losses)(1) | | | | | | | | |
Insurance—North American | | $ | 148 | | | $ | 120 | |
Insurance—Overseas General | | | 112 | | | | 65 | |
Global Reinsurance* | | | 122 | | | | 89 | |
Financial Services | | | 85 | | | | 59 | |
Corporate | | | (56 | ) | | | (54 | ) |
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Total | | $ | 411 | | | $ | 279 | |
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| * | Includes both property and casualty reinsurance and life reinsurance |
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