Chubb Limited (CB) 8-K Ace Limited Reports Second Quarter Results

Exhibit 99.2

Financial Supplement

June 30, 2004

Investor Contact Helen M. Wilson Phone: (441) 299-9283	This report is for informational purposes only. It should be read in conjuction 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.
Fax: (441) 292-8675
email: investorrelations@ace.bm	Cautionary Statement Regarding Forward-Looking Statements:
	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 exposures, 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, new theories of liability, planned public offerings, judicial and legislative developments, litigation tactics, and credit developments among reinsurers and the Company’s forward-looking statements concerning taxes could be affected by changes in tax laws and regulations. Other factors that could affect forward-looking statements are 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, 2003, the Company’s quarterly reports on Form 10-Q and in the Company’s earnings press release, which are 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
	- Consolidated Financial Highlights	1
II.	Consolidated Results
	- Consolidated Results - Consecutive Quarters	2-3
	- Computation of Basic and Diluted Earnings Per Share	4
	- Summary Consolidated Balance Sheets	5
	- Consolidated Premiums by Line of Business	6
	- Consolidating Statement of Operations	7-8
III.	Segment Results
	- Insurance-North American	9
	- Insurance-Overseas General	10-11
	- Global Reinsurance	12-13
	- Financial Services	14-15
IV.	Balance Sheet Details
	- Loss Reserve Rollforward	16
	- Asbestos and Environmental Reserves	17
	- Reinsurance Recoverable Analysis	18-21
	- Investment Portfolio	22-23
	- Realized and Unrealized Gains (Losses)	24
	- Capital Structure	25
V.	Other Disclosures
	- Non-GAAP Financial Measures	26
	- Diluted Book Value per Ordinary Share	27
	- Comprehensive Income	28
	- Glossary	29

ACE Limited

Consolidated Financial Highlights

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

(Unaudited)

	Three months ended June 30						% Change 2Q-04 vs. 2Q-03		Six months ended June 30						% Change YTD -04 vs. YTD-03
	2004			2003					2004			2003
Gross premiums written	$	4,040		$	3,405		19	%	$	8,456		$	7,518		12	%
Net premiums written	$	2,867		$	2,406		19	%	$	6,105		$	5,336		14	%
Net premiums earned	$	2,788		$	2,306		21	%	$	5,388		$	4,378		23	%
Net investment income	$	236		$	211		12	%	$	474		$	417		14	%
Income excluding net realized gains (losses)	$	380		$	286		33	%	$	791		$	565		40	%
Net income	$	413		$	371		11	%	$	860		$	618		39	%
Comprehensive income	$	(135	)	$	646		-121	%	$	446		$	991		-55	%
Operating cash flow	$	1,108		$	978		13	%	$	2,280		$	1,578		44	%
Combined ratio
Loss and loss expense ratio		63.1	%		64.5	%				61.8	%		63.9	%
Underwriting and administrative expense ratio		25.6	%		27.2	%				26.0	%		27.2	%
Combined ratio		88.7	%		91.7	%				87.8	%		91.1	%
Annualized ROE*		16.9	%		15.6	%				18.1	%		15.7	%
Annualized ROE, excluding FAS 115		17.7	%		17.2	%				18.9	%		17.4	%
Diluted earnings per share
Income excluding net realized gains (losses)	$	1.29		$	1.01		28	%	$	2.70		$	2.04		32	%
Net income	$	1.41		$	1.32		7	%	$	2.94		$	2.23		32	%
Diluted book value per ordinary share	$	30.46		$	27.24		12	%	$	30.46		$	27.24		12	%
Diluted tangible book value per ordinary share	$	21.61		$	17.91		21	%	$	21.61		$	17.91		21	%
Weighted average diluted ordinary shares outstanding		285.4			275.2		4	%		285.0			270.7		5	%
Debt/ total capitalization		19.8	%		18.0	%				19.8	%		18.0	%

* Calculated using income excluding net realized gains (losses).

Financial Highlights Page 1

ACE Limited

Consolidated Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
ACE Limited Consolidated
Property and Casualty(1)
Gross premiums written	$	3,969		$	4,155		$	3,330		$	3,295		$	3,241		$	8,124		$	6,773		$	13,398
Net premiums written		2,798			2,979			2,250			2,154			2,230			5,777			4,587			8,991
Net premiums earned		2,600			2,370			2,307			2,146			2,049			4,970			3,864			8,317
Losses and loss expenses		1,636			1,456			1,429			1,375			1,298			3,092			2,420			5,224
Policy acquisition costs		381			349			363			321			315			730			596			1,280
Administrative expenses		298			290			295			271			266			588			507			1,073
P& C underwriting income	$	285		$	275		$	220		$	179		$	170		$	560		$	341		$	740
Financial Services underwriting income		26			58			4			22			17			84			36			62
Life underwriting income (loss) excluding investment income		3			3			(2	)		(4	)		(5	)		6			(10	)		(16	)
Net investment income		236			238			228			216			211			474			417			861
Other income (expense)		(6	)		(17	)		(19	)		(3	)		1			(23	)		(5	)		(27	)
Interest expense		47			44			44			45			43			91			88			177
Income tax expense		117			102			59			61			65			219			126			246
Income excluding net realized gains (losses)	$	380		$	411		$	328		$	304		$	286		$	791		$	565		$	1,197
Net realized gains (losses)		43			57			128			57			107			100			67			252
Tax benefit (expense) on net realized gains (losses)		(10	)		(21	)		(12	)		(6	)		(22	)		(31	)		(14	)		(32	)
Net income	$	413		$	447		$	444		$	355		$	371		$	860		$	618		$	1,417
% Change versus prior year period(1)
Gross premiums written		22	%		18	%		13	%		11	%		25	%		20	%		31	%		21	%
Net premiums written		25	%		26	%		32	%		27	%		46	%		26	%		52	%		40	%
Net premiums earned		27	%		31	%		41	%		44	%		55	%		29	%		60	%		50	%
Other ratios
Net premiums written/gross premiums written		70	%		72	%		68	%		65	%		69	%		71	%		68	%		67	%
Effective tax rate		24	%		20	%		15	%		17	%		19	%		22	%		18	%		17	%
ROE
Annualized ROE		16.9	%		18.7	%		15.8	%		15.2	%		15.6	%		18.1	%		15.7	%		15.8	%
Annualized ROE, excluding FAS 115		17.7	%		20.4	%		17.3	%		16.8	%		17.2	%		18.9	%		17.4	%		17.2	%

(1) Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.

Consolidated Results Page 2

ACE Limited

Consolidated Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
ACE Limited Consolidated
Combined ratio
Loss and loss expense ratio		63.1	%		60.5	%		66.8	%		64.6	%		64.5	%		61.8	%		63.9	%		65.0	%
Policy acquisition cost ratio		14.3	%		14.1	%		13.6	%		14.4	%		14.6	%		14.2	%		14.5	%		14.2	%
Administrative expense ratio		11.3	%		12.3	%		11.5	%		12.4	%		12.6	%		11.8	%		12.7	%		12.3	%
Combined ratio		88.7	%		86.9	%		91.9	%		91.4	%		91.7	%		87.8	%		91.1	%		91.5	%
	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Property and Casualty(1)
Combined ratio
Loss and loss expense ratio		62.9	%		61.5	%		61.9	%		64.0	%		63.4	%		62.2	%		62.6	%		62.8	%
Policy acquisition cost ratio		14.6	%		14.7	%		15.8	%		15.0	%		15.3	%		14.7	%		15.4	%		15.4	%
Administrative expense ratio		11.5	%		12.2	%		12.8	%		12.6	%		13.0	%		11.8	%		13.1	%		12.9	%
Combined ratio		89.0	%		88.4	%		90.5	%		91.6	%		91.7	%		88.7	%		91.1	%		91.1	%
Large losses and other items
Catastrophe and other large losses	$	—		$	—		$	35		$	42		$	30		$	—		$	35		$	112
Prior period development(2)	$	25		$	(6	)	$	14		$	62		$	21		$	19		$	45		$	121

(1) Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.

(2) See Financial Services schedule for prior period development related to that segment.

Consolidated Results 2 Page 3

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 June 30						Six months ended June 30
	2004			2003			2004			2003
Numerator
Income excluding net realized gains (losses)	$	380		$	286		$	791		$	565
Perpetual preferred dividend		(11	)		(4	)		(22	)		(4	)
Mezzanine equity dividend		—			(3	)		—			(10	)
Income to ordinary shares, excl. net realized gains (losses)		369			279			769			551
Net realized gains (losses), net of income tax		33			85			69			53
Net income available to the holders of ordinary shares	$	402		$	364		$	838		$	604
Rollforward of ordinary shares
Ordinary shares - beginning of period		282,714,909			264,491,819			279,897,193			262,679,356
Mezzanine equity conversion		—			11,814,274			—			11,814,274
Issued under employee stock purchase plan		(2	)		346			125,629			136,149
Stock (cancelled) granted		(347,919	)		(438,707	)		911,686			1,054,140
Issued for option exercises		1,237,457			1,887,558			2,669,937			2,071,371
Ordinary shares - end of period		283,604,445			277,755,290			283,604,445			277,755,290
Denominator
Weighted average shares outstanding		280,007,156			268,260,244			279,477,772			264,957,203
Effect of other dilutive securities		5,364,008			6,972,095			5,560,172			5,761,774
Adj. wtd. avg. shares outstanding and assumed conversions		285,371,164			275,232,339			285,037,944			270,718,977
Basic earnings per share
Income excluding net realized gains (losses)	$	1.32		$	1.04		$	2.75		$	2.08
Net realized gains (losses)		0.11		��	0.31			0.24			0.20
Net income	$	1.43		$	1.35		$	2.99		$	2.28
Diluted earnings per share
Income excluding net realized gains (losses)	$	1.29		$	1.01		$	2.70		$	2.04
Net realized gains (losses)		0.12			0.31			0.24			0.19
Net income	$	1.41		$	1.32		$	2.94		$	2.23

Earnings per share Page 4

ACE Limited

Summary Consolidated Balance Sheets

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

	June 30 2004		March 31 2004		December 31 2003
	(Unaudited)		(Unaudited)		(Audited)
Assets
Fixed maturities available for sale, at fair value	$	18,348	$	19,920	$	18,645
Equity securities, at fair value		953		539		544
Securities on loan, at fair value		1,515		1,183		684
Short-term investments		4,040		3,290		2,928
Other investments		1,216		643		645
Cash		663		614		562
Total investments and cash		26,735		26,189		24,008
Insurance and reinsurance balances receivable		3,567		3,493		2,837
Reinsurance recoverable		14,374		14,062		14,081
Deferred policy acquisition costs		969		1,108		1,005
Prepaid reinsurance premiums		1,652		1,578		1,372
Goodwill		2,614		2,699		2,711
Deferred tax assets		1,115		997		1,090
Other assets		2,625		2,352		2,449
Total assets	$	53,651	$	52,478	$	49,553
Liabilities
Unpaid losses and loss expenses	$	28,224	$	27,697	$	27,155
Unearned premiums		6,555		6,930		6,051
Future policy benefits for life and annuity contracts		505		496		492
Insurance and reinsurance balances payable		2,280		2,145		1,903
Deposit liabilities		221		217		212
Securities lending collateral		1,542		1,208		698
Payable for investments purchased		726		570		369
Accounts payable, accrued expenses and other liabilities		1,496		1,436		1,468
Short-term debt		546		546		546
Long-term debt		1,849		1,349		1,349
Trust preferred securities		487		487		475
Total liabilities		44,431		43,081		40,718
Shareholders’ equity
Total shareholders’ equity, excl. AOCI		8,915		8,543		8,115
Accumulated other comprehensive income (AOCI)		305		854		720
Total shareholders’ equity		9,220		9,397		8,835
Total liabilities and shareholders’ equity	$	53,651	$	52,478	$	49,553
Diluted book value per ordinary share	$	30.46	$	31.36	$	29.46
Diluted tangible book value per ordinary share	$	21.61	$	22.41	$	20.25

Consol Bal Sheet Page 5

ACE Limited

Consolidated Premiums by Line of Business

(in millions of U.S. dollars)

(Unaudited)

	2Q-04		% of Total Consolidated		2Q-03		% of Total Consolidated		% Change 2Q-04 vs. 2Q-03		YTD 2004		% of Total Consolidated		YTD 2003		% of Total Consolidated		% Change YTD-04 vs. YTD-03
ACE Limited Consolidated
Net premiums written
Property and all other	$	966	34	%	$	907	38	%	7	%	$	1,964	32	%	$	1,811	34	%	8	%
Casualty		1,534	54	%		1,076	45	%	43	%		3,232	53	%		2,279	43	%	42	%
Personal accident		298	10	%		247	10	%	21	%		581	9	%		497	9	%	17	%
Total P&C		2,798	98	%		2,230	93	%	25	%		5,777	94	%		4,587	86	%	26	%
Global Re - life		55	2	%		44	2	%	25	%		106	2	%		91	2	%	16	%
Financial Services		14	0	%		132	5	%	-89	%		222	4	%		658	12	%	-66	%
Total Consolidated	$	2,867	100	%	$	2,406	100	%	19	%	$	6,105	100	%	$	5,336	100	%	14	%
Net premiums earned
Property and all other	$	859	31	%	$	821	35	%	5	%	$	1,611	30	%	$	1,549	35	%	4	%
Casualty		1,450	52	%		1,005	44	%	44	%		2,813	52	%		1,875	43	%	50	%
Personal accident		291	10	%		223	10	%	30	%		546	10	%		440	10	%	24	%
Total P&C		2,600	93	%		2,049	89	%	27	%		4,970	92	%		3,864	88	%	29	%
Global Re - life		54	2	%		42	2	%	29	%		105	2	%		90	2	%	17	%
Financial Services		134	5	%		215	9	%	-38	%		313	6	%		424	10	%	-26	%
Total Consolidated	$	2,788	100	%	$	2,306	100	%	21	%	$	5,388	100	%	$	4,378	100	%	23	%

P&C Line of Business Page 6

ACE Limited

Consolidating Statement of Operations

Three months ended June 30, 2004 and 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
June 30, 2004
Gross premiums written	$	2,102		$	1,500		$	367	$	—		$	3,969		$	15		$	3,984
Net premiums written		1,329			1,105			364		—			2,798			14			2,812
Net premiums earned		1,178			1,076			346		—			2,600			134			2,734
Losses and loss expenses		837			625			174		—			1,636			89			1,725
Policy acquisition costs		111			196			74		—			381			9			390
Administrative expenses		115			139			15		29			298			10			308
Underwriting income (loss)		115			116			83		(29	)		285			26			311
Life underwriting income (includes investment income)		—			—			11		—			11			—			11
Net investment income - property and casualty		107			55			29		1			192			36			228
Other income (expense)		(3	)		(4	)		—		1			(6	)		—			(6	)
Interest expense		5			—			—		41			46			1			47
Income tax expense (benefit)		61			60			1		(15	)		107			10			117
Income (loss) excluding net realized gains (losses)		153			107			122		(53	)		329			51			380
Net realized gains (losses)		31			3			12		29			75			(32	)		43
Tax benefit (expense) on net realized gains (losses)		(8	)		(1	)		—		—			(9	)		(1	)		(10	)
Net income (loss)	$	176		$	109		$	134	$	(24	)	$	395		$	18		$	413
June 30, 2003
Gross premiums written	$	1,648		$	1,244		$	349	$	—		$	3,241		$	118		$	3,359
Net premiums written		969			916			345		—			2,230			132			2,362
Net premiums earned		920			860			269		—			2,049			215			2,264
Losses and loss expenses		637			518			143		—			1,298			161			1,459
Policy acquisition costs		101			163			51		—			315			17			332
Administrative expenses		102			121			14		29			266			20			286
Underwriting income (loss)		80			58			61		(29	)		170			17			187
Life underwriting income		—			—			3		—			3			—			3
Net investment income - property and casualty		101			37			21		(5	)		154			49			203
Other income (expense)		—			—			—		—			—			1			1
Interest expense		5			—			—		37			42			1			43
Income tax expense (benefit)		42			25			3		(13	)		57			8			65
Income (loss) excluding net realized gains (losses)		134			70			82		(58	)		228			58			286
Net realized gains (losses)		25			2			13		(5	)		35			72			107
Tax benefit (expense) on net realized gains (losses)		(3	)		—			1		—			(2	)		(20	)		(22	)
Net income (loss)	$	156		$	72		$	96	$	(63	)	$	261		$	110		$	371

Segment 2004 Qtr Page 7

ACE Limited

Consolidating Statement of Operations

Six months ended June 30, 2004 and 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
June 30, 2004
Gross premiums written	$	4,007		$	3,174		$	943	$	—		$	8,124		$	223		$	8,347
Net premiums written		2,541			2,303			933		—			5,777			222			5,999
Net premiums earned		2,185			2,110			675		—			4,970			313			5,283
Losses and loss expenses		1,533			1,226			333		—			3,092			175			3,267
Policy acquisition costs		212			380			138		—			730			20			750
Administrative expenses		218			277			34		59			588			34			622
Underwriting income (loss)		222			227			170		(59	)		560			84			644
Life underwriting income (includes investment income)		—			—			22		—			22			—			22
Net investment income - property and casualty		211			103			56		(1	)		369			89			458
Other income (expense)		(6	)		(7	)		—		1			(12	)		(11	)		(23	)
Interest expense		10			—			—		78			88			3			91
Income tax expense (benefit)		116			104			4		(28	)		196			23			219
Income (loss) excluding net realized gains (losses)		301			219			244		(109	)		655			136			791
Net realized gains (losses)		83			27			2		15			127			(27	)		100
Tax benefit (expense) on net realized gains (losses)		(15	)		(8	)		—		—			(23	)		(8	)		(31	)
Net income (loss)	$	369		$	238		$	246	$	(94	)	$	759		$	101		$	860
June 30, 2003
Gross premiums written	$	3,312		$	2,650		$	811	$	—		$	6,773		$	650		$	7,423
Net premiums written		1,902			1,897			788		—			4,587			658			5,245
Net premiums earned		1,673			1,674			517		—			3,864			424			4,288
Losses and loss expenses		1,149			1,012			259		—			2,420			322			2,742
Policy acquisition costs		184			315			97		—			596			28			624
Administrative expenses		190			235			29		53			507			38			545
Underwriting income (loss)		150			112			132		(53	)		341			36			377
Life underwriting income		—			—			5		—			5			—			5
Net investment income - property and casualty		202			72			40		(12	)		302			100			402
Other income (expense)		(6	)		(1	)		1		—			(6	)		1			(5	)
Interest expense		11			—			—		74			85			3			88
Income tax expense (benefit)		81			48			7		(27	)		109			17			126
Income (loss) excluding net realized gains (losses)		254			135			171		(112	)		448			117			565
Net realized gains (losses)		7			(11	)		16		(14	)		(2	)		69			67
Tax benefit (expense) on net realized gains (losses)		—			5			1		—			6			(20	)		(14	)
Net income (loss)	$	261		$	129		$	188	$	(126	)	$	452		$	166		$	618

Segment 2004 YTD Page 8

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Insurance - North American
Gross premiums written	$	2,102		$	1,905		$	1,764		$	1,819		$	1,648		$	4,007		$	3,312		$	6,895
Net premiums written		1,329			1,212			1,048			1,065			969			2,541			1,902			4,015
Net premiums earned		1,178			1,007			991			990			920			2,185			1,673			3,654
Losses and loss expenses		837			696			660			712			637			1,533			1,149			2,521
Policy acquisition costs		111			101			108			95			101			212			184			387
Administrative expenses		115			103			109			103			102			218			190			402
Underwriting income		115			107			114			80			80			222			150			344
Net investment income		107			104			103			98			101			211			202			403
Other income (expense)		(3	)		(3	)		(8	)		—			—			(6	)		(6	)		(14	)
Interest expense		5			5			6			5			5			10			11			22
Income tax expense (benefit)		61			55			50			48			42			116			81			179
Income excluding net realized gains (losses)		153			148			153			125			134			301			254			532
Net realized gains (losses)		31			52			24			8			25			83			7			39
Tax benefit (expense) on net realized gains (losses)		(8	)		(7	)		—			—			(3	)		(15	)		—			—
Net income	$	176		$	193		$	177		$	133		$	156		$	369		$	261		$	571
Combined ratio
Loss and loss expense ratio		71.1	%		69.1	%		66.6	%		71.9	%		69.2	%		70.2	%		68.7	%		69.0	%
Policy acquisition cost ratio		9.5	%		10.0	%		10.9	%		9.6	%		10.9	%		9.7	%		11.0	%		10.6	%
Administrative expense ratio		9.7	%		10.3	%		11.1	%		10.4	%		11.1	%		10.0	%		11.3	%		11.0	%
Combined ratio		90.3	%		89.4	%		88.6	%		91.9	%		91.2	%		89.9	%		91.0	%		90.6	%
Large losses and other items
Large losses (before tax)	$	—		$	—		$	—		$	20		$	—		$	—		$	—		$	20
Prior period development	$	42		$	15		$	14		$	30		$	22		$	57		$	47		$	91
% Change versus prior year period
Gross premiums written		28	%		14	%		8	%		2	%		15	%		21	%		23	%		13	%
Net premiums written		37	%		30	%		28	%		23	%		35	%		34	%		54	%		38	%
Net premiums earned		28	%		34	%		34	%		51	%		52	%		31	%		55	%		48	%
Other ratios
Net premiums written/gross premiums written		63	%		64	%		59	%		59	%		59	%		63	%		57	%		58	%

Insurance-North American Page 9

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Insurance - Overseas General
Gross premiums written	$	1,500		$	1,674		$	1,341		$	1,200		$	1,244		$	3,174		$	2,650		$	5,191
Net premiums written		1,105			1,198			982			872			916			2,303			1,897			3,751
Net premiums earned		1,076			1,034			1,007			882			860			2,110			1,674			3,563
Losses and loss expenses		625			601			603			529			518			1,226			1,012			2,144
Policy acquisition costs		196			184			197			170			163			380			315			682
Administrative expenses		139			138			130			121			121			277			235			486
Underwriting income	$	116		$	111		$	77		$	62		$	58		$	227		$	112		$	251
Net investment income		55			48			44			39			37			103			72			155
Other income (expense)		(4	)		(3	)		(3	)		(3	)		—			(7	)		(1	)		(7	)
Interest expense		—			—			—			—			—			—			—			—
Income tax expense		60			44			24			12			25			104			48			84
Income excluding net realized gains (losses)	$	107		$	112		$	94		$	86		$	70		$	219		$	135		$	315
Net realized gains (losses)		3			24			1			4			2			27			(11	)		(6	)
Tax benefit (expense) on net realized gains (losses)		(1	)		(7	)		—			—			—			(8	)		5			5
Net income	$	109		$	129		$	95		$	90		$	72		$	238		$	129		$	314
Combined ratio
Loss and loss expense ratio		58.1	%		58.1	%		59.8	%		59.9	%		60.3	%		58.1	%		60.5	%		60.2	%
Policy acquisition cost ratio		18.2	%		17.9	%		19.6	%		19.3	%		18.9	%		18.0	%		18.8	%		19.2	%
Administrative expense ratio		13.0	%		13.3	%		12.9	%		13.7	%		14.0	%		13.1	%		14.0	%		13.6	%
Combined ratio		89.3	%		89.3	%		92.3	%		92.9	%		93.2	%		89.2	%		93.3	%		93.0	%
Large losses and other items
Large losses (before tax)	$	—		$	—		$	—		$	10		$	—		$	—		$	—		$	10
Prior period development	$	(4	)	$	(8	)	$	11		$	35		$	12		$	(12	)	$	11		$	57
% Change versus prior year period
Gross premiums written		21	%		19	%		11	%		19	%		32	%		20	%		39	%		26	%
Net premiums written		21	%		22	%		23	%		26	%		49	%		21	%		54	%		38	%
Net premiums earned		25	%		27	%		50	%		36	%		52	%		26	%		56	%		49	%
Other ratios
Net premiums written/gross premiums written		74	%		72	%		73	%		73	%		74	%		73	%		72	%		72	%

Insurance-Overseas General Page 10

ACE Limited

Segment Results - Consecutive Quarters - 2

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Insurance - Overseas General
Gross premiums written
ACE Global Markets	$	424		$	391		$	458		$	351		$	422		$	815		$	768		$	1,577
ACE International		1,076			1,283			883			849			822			2,359			1,882			3,614
Total	$	1,500		$	1,674		$	1,341		$	1,200		$	1,244		$	3,174		$	2,650		$	5,191
Net premiums written
ACE Global Markets	$	315		$	272		$	294		$	253		$	295		$	587		$	551		$	1,098
ACE International		790			926			688			619			621			1,716			1,346			2,653
Total	$	1,105		$	1,198		$	982		$	872		$	916		$	2,303		$	1,897		$	3,751
Net premiums earned
ACE Global Markets	$	286		$	280		$	295		$	244		$	256		$	566		$	504		$	1,043
ACE International		790			754			712			638			604			1,544			1,170			2,520
Total	$	1,076		$	1,034		$	1,007		$	882		$	860		$	2,110		$	1,674		$	3,563
Net premiums written/gross premiums written
ACE Global Markets		74.3	%		69.6	%		64.2	%		72.1	%		69.9	%		72.0	%		71.7	%		69.6	%
ACE International		73.4	%		72.2	%		77.9	%		72.9	%		75.5	%		72.7	%		71.5	%		73.4	%
Total NPW/GPW		73.7	%		71.6	%		73.2	%		72.7	%		73.6	%		72.6	%		71.6	%		72.3	%
Loss ratio
ACE Global Markets		60.7	%		60.6	%		63.2	%		61.2	%		61.4	%		60.7	%		61.3	%		61.8	%
ACE International		57.1	%		57.2	%		58.4	%		59.4	%		59.8	%		57.2	%		60.1	%		59.5	%
Total loss ratio		58.1	%		58.1	%		59.8	%		59.9	%		60.3	%		58.1	%		60.5	%		60.2	%
Expense ratio
ACE Global Markets		31.4	%		33.0	%		33.1	%		35.7	%		35.7	%		32.2	%		36.3	%		35.3	%
ACE International		31.0	%		30.4	%		32.3	%		32.0	%		31.7	%		30.7	%		31.4	%		31.8	%
Total expense ratio		31.2	%		31.2	%		32.5	%		33.0	%		32.9	%		31.1	%		32.8	%		32.8	%
Combined ratio
ACE Global Markets		92.1	%		93.6	%		96.3	%		96.9	%		97.1	%		92.9	%		97.6	%		97.1	%
ACE International		88.1	%		87.6	%		90.7	%		91.4	%		91.5	%		87.9	%		91.5	%		91.3	%
Total combined ratio		89.3	%		89.3	%		92.3	%		92.9	%		93.2	%		89.2	%		93.3	%		93.0	%

Insurance-Overseas General 2 Page 11

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Global Reinsurance
Property and casualty
Gross premiums written	$	367		$	576		$	225		$	276		$	349		$	943		$	811		$	1,312
Net premiums written		364			569			220			217			345			933			788			1,225
Net premiums earned		346			329			309			274			269			675			517			1,100
Losses and loss expenses		174			159			166			134			143			333			259			559
Policy acquisition costs		74			64			58			56			51			138			97			211
Administrative expenses		15			19			17			16			14			34			29			62
P&C underwriting income		83			87			68			68			61			170			132			268
Life
Gross premiums written		56			53			49			49			46			109			95			193
Net premiums written		55			51			47			47			44			106			91			185
Net premiums earned		54			51			48			46			42			105			90			184
Losses and loss expenses		44			42			44			45			44			86			92			181
Policy acquisition costs		6			5			5			5			2			11			6			16
Administrative expenses		1			1			1			—			1			2			2			3
Net investment income		8			8			8			10			8			16			15			33
Life underwriting income		11			11			6			6			3			22			5			17
Total underwriting income		94			98			74			74			64			192			137			285
Net investment income - property and casualty		29			27			24			23			21			56			40			87
Other income (expense)		—			—			1			1			—			—			1			3
Interest expense		—			—			—			—			—			—			—			—
Income tax expense		1			3			4			3			3			4			7			14
Income excluding net realized gains (losses)		122			122			95			95			82			244			171			361
Net realized gains (losses)		12			(10	)		8			10			13			2			16			34
Tax benefit (expense) on net realized gains (losses)		—			—			(1	)		—			1			—			1			—
Net income	$	134		$	112		$	102		$	105		$	96		$	246		$	188		$	395
P&C combined ratio
Loss and loss expense ratio		50.2	%		48.5	%		53.9	%		48.9	%		53.1	%		49.4	%		50.0	%		50.9	%
Policy acquisition cost ratio		21.4	%		19.4	%		18.9	%		20.4	%		18.8	%		20.4	%		18.7	%		19.2	%
Administrative expense ratio		4.5	%		5.6	%		5.5	%		5.7	%		5.3	%		5.0	%		5.7	%		5.6	%
P&C combined ratio		76.1	%		73.5	%		78.3	%		75.0	%		77.2	%		74.8	%		74.4	%		75.7	%
Large losses and other items
Large losses (before tax)	$	—		$	—		$	35		$	12		$	30		$	—		$	35		$	82
Prior period development	$	(13	)	$	(13	)	$	(11	)	$	(3	)	$	(13	)	$	(26	)	$	(13	)	$	(27	)

Global Reinsurance Page 12

ACE Limited

Segment Results - Consecutive Quarters - 2

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Global Reinsurance -Property & Casualty
% Change versus prior year period
Gross premiums written		5	%		25	%		99	%		48	%		63	%		16	%		38	%		48	%
Net premiums written		6	%		28	%		134	%		66	%		75	%		18	%		43	%		58	%
Net premiums earned		29	%		33	%		42	%		41	%		79	%		31	%		95	%		62	%
Other ratios
Net premiums written/gross premiums written		99	%		99	%		98	%		79	%		99	%		99	%		97	%		93	%
Global Reinsurance - By Division
Gross premiums written
Tempest Europe	$	60		$	126		$	63		$	60		$	97		$	186		$	220		$	343
Tempest USA		224			253			148			147			133			477			233			528
Tempest Bermuda		83			197			14			69			119			280			358			441
Total	$	367		$	576		$	225		$	276		$	349		$	943		$	811		$	1,312
Net premiums written
Tempest Europe	$	54		$	122		$	53		$	52		$	94		$	176		$	209		$	314
Tempest USA		224			252			148			144			132			476			231			523
Tempest Bermuda		86			195			19			21			119			281			348			388
Total	$	364		$	569		$	220		$	217		$	345		$	933		$	788		$	1,225
Net premiums earned
Tempest Europe	$	75		$	75		$	72		$	55		$	63		$	150		$	132		$	259
Tempest USA		189			169			138			127			112			358			198			463
Tempest Bermuda		82			85			99			92			94			167			187			378
Total	$	346		$	329		$	309		$	274		$	269		$	675		$	517		$	1,100
Net premiums written/gross premiums written
Tempest Europe		90	%		97	%		84	%		87	%		97	%		95	%		95	%		92	%
Tempest USA		100	%		100	%		100	%		98	%		99	%		100	%		99	%		99	%
Tempest Bermuda		104	%		99	%		136	%		30	%		100	%		100	%		97	%		88	%
Total NPW/GPW		99	%		99	%		98	%		79	%		99	%		99	%		97	%		93	%

Global Reinsurance 2 Page 13

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Financial Services
Gross premiums written	$	15		$	208		$	289		$	107		$	118		$	223		$	650		$	1,046
Net premiums written		14			208			276			105			132			222			658			1,039
Net premiums earned		134			179			472			205			215			313			424			1,101
Losses and loss expenses		89			86			428			144			161			175			322			894
Policy acquisition costs		9			11			16			17			17			20			28			61
Administrative expenses		10			24			24			22			20			34			38			84
Underwriting income		26			58			4			22			17			84			36			62
Net investment income		36			53			53			49			49			89			100			202
Other income (expense)		—			(11	)		—			(1	)		1			(11	)		1			—
Interest expense		1			2			1			2			1			3			3			6
Income tax expense		10			13			(1	)		11			8			23			17			27
Income excluding net realized gains (losses)		51			85			57			57			58			136			117			231
Net realized gains (losses)		(32	)		5			92			29			72			(27	)		69			190
Tax benefit (expense) on net realized gains (losses)		(1	)		(7	)		(11	)		(6	)		(20	)		(8	)		(20	)		(37	)
Net income	$	18		$	83		$	138		$	80		$	110		$	101		$	166		$	384
Combined ratio
Loss and loss expense ratio		66.1	%		48.0	%		90.6	%		70.2	%		74.9	%		55.8	%		75.9	%		81.2	%
Policy acquisition cost ratio		7.0	%		5.9	%		3.2	%		8.7	%		7.8	%		6.4	%		6.5	%		5.5	%
Administrative expense ratio		7.5	%		13.7	%		5.1	%		10.6	%		9.5	%		11.0	%		9.1	%		7.7	%
Combined ratio		80.6	%		67.6	%		98.9	%		89.5	%		92.2	%		73.2	%		91.5	%		94.4	%
Large losses and other items
Loss portfolio transfers(1)	$	—		$	—		$	270		$	4		$	—		$	—		$	—		$	274
Prior period development	$	(5	)	$	(2	)	$	44		$	(2	)	$	(9	)	$	(7	)	$	(1	)	$	43
% Change versus prior year period
Gross premiums written		-87	%		-61	%		21	%		-78	%		-63	%		-66	%		-19	%		-32	%
Net premiums written		-89	%		-60	%		21	%		-78	%		-58	%		-66	%		-17	%		-31	%
Net premiums earned		-38	%		-14	%		62	%		-45	%		-6	%		-26	%		-8	%		-2	%
Other ratios
Net premiums written/gross premiums written		93	%		100	%		96	%		98	%		112	%		100	%		101	%		99	%

(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.

Financial Services Page 14

ACE Limited

Financial Services

Sale of Assured Guaranty

(in millions of U.S. dollars)

(Unaudited)

Sale of Assured Guaranty Ltd.

On April 28, 2004, the Company completed the sale of 65.3 percent of its financial and mortgage guaranty reinsurance and insurance businesses (transferred business) through the initial public offering (IPO) of 49 million common shares of Assured Guaranty Ltd. (Assured Guaranty) at $18.00 per share. Assured Guaranty was incorporated in Bermuda in August 2003 for the sole purpose of becoming a holding company for the transferred business.

Pursuant to the completion of the IPO on April 28, 2004, the Company received proceeds, net of related offering costs, of approximately $835 million. The transaction resulted in a pre-tax loss of $6.7 million, that reduces net realized gains in the consolidated income statement, and an after-tax loss of $18.1 million, which consists of the following:

Loss on sale of financial and mortgage guaranty businesses	$	(49.7	)
Income tax expense		11.4
After tax reduction in book value		(61.1	)
Realization of accumulated other comprehensive income on companies sold		43.0
After tax loss	$	(18.1	)

A description of each component of the loss is as follows:

• The loss on the sale of the financial and mortgage guaranty businesses of $49.7 million represents the difference between the carrying value of the Company’s interest in Assured Guaranty sold and net proceeds of the Offering.

• Income tax expense of $11.4 million principally relates to federal income taxes incurred from the transfer of ACE’s U.S. financial and mortgage guaranty operations to Assured Guaranty and attributed to the Assured Guaranty shares sold by the Company. The income tax expense results from a higher basis in the assets of the transferred subsidiaries for financial reporting purposes compared to the corresponding tax basis. In connection with its sale and pursuant to a tax allocation agreement, Assured Guaranty will make a tax election that will have the effect of increasing the tax basis of tangible and intangible assets to fair value. Future tax benefits that Assured Guaranty derives from this election will be payable to ACE and recognized by ACE when realized by Assured Guaranty.

• The realization of accumulated other comprehensive income on companies sold of $43.0 million principally relates to the unrealized appreciation of available-for-sale securities included in the carrying value of the interest in Assured Guaranty sold; such gains had no effect on shareholders’ equity.

Financial Services 2 Page 15

ACE Limited

Loss Reserve Rollforward

(in millions of U.S. dollars)

(Unaudited)

	Total									Ongoing									Run-off(1)
	Unpaid Losses									Unpaid Losses									Unpaid Losses
	Gross			Ceded			Net			Gross			Ceded			Net			Gross			Ceded			Net
Balance at December 31, 2002	$	24,315		$	12,997		$	11,318		$	15,832		$	6,798		$	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			16,366			7,025			9,341			8,270			6,111			2,159
Losses and loss expenses incurred		2,511			1,052			1,459			2,463			1,020			1,443			48			32			16
Losses and loss expenses paid		(2,415	)		(1,357	)		(1,058	)		(1,964	)		(1,134	)		(830	)		(451	)		(223	)		(228	)
Other (incl. foreign exch. revaluation)		208			123			85			208			123			85			—			—			—
Balance at June 30, 2003		24,940			12,954			11,986			17,073			7,034			10,039			7,867			5,920			1,947
Losses and loss expenses incurred		2,552			1,033			1,519			2,472			977			1,495			80			56			24
Losses and loss expenses paid		(1,833	)		(863	)		(970	)		(1,557	)		(663	)		(894	)		(276	)		(200	)		(76	)
Other (incl. foreign exch. revaluation)		(22	)		(19	)		(3	)		(12	)		(19	)		7			(10	)		—			(10	)
Balance at September 30, 2003		25,637			13,105			12,532			17,976			7,329			10,647			7,661			5,776			1,885
Losses and loss expenses incurred		2,812			956			1,856			2,779			932			1,847			33			24			9
Losses and loss expenses paid		(1,810	)		(1,104	)		(706	)		(1,433	)		(797	)		(636	)		(377	)		(307	)		(70	)
Other (incl. foreign exch. revaluation) (2)		516			235			281			513			235			278			3			—			3
Balance at December 31, 2003		27,155			13,192			13,963			19,835			7,699			12,136			7,320			5,493			1,827
Losses and loss expenses incurred		2,298			756			1,542			2,256			724			1,532			42			32			10
Losses and loss expenses paid		(1,873	)		(781	)		(1,092	)		(1,652	)		(682	)		(970	)		(221	)		(99	)		(122	)
Other (incl. foreign exch. revaluation)		117			110			7			117			110			7			—						—
Balance at March 31, 2004		27,697			13,277			14,420			20,556			7,851			12,705			7,141			5,426			1,715
Losses and loss expenses incurred		2,451			727			1,724			2,481			761			1,720			(30	)		(34	)		4
Losses and loss expenses paid		(1,692	)		(593	)		(1,099	)		(1,401	)		(479	)		(922	)		(291	)		(114	)		(177	)
Other (incl. foreign exch. revaluation) (3)		(232	)		166			(398	)		(232	)		166			(398	)		—			—			—
Balance at June 30, 2004	$	28,224		$	13,577		$	14,657		$	21,404		$	8,299		$	13,105		$	6,820		$	5,278		$	1,542

(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.

(2) Other includes approximately $220 million of gross losses and $140 million of reinsurance recoverable related to ACE increasing its participation in the Lloyds syndicate to 100%.

(3) Other includes reductions in reserves related to the sale of Assured Guaranty Ltd.

Loss Reserve Rollforward Page 16

ACE Limited

Asbestos and Environmental Reserves

(in millions of U.S. dollars)

(Unaudited)

	Asbestos									Asbestos - December 31, 2003*
	Gross			Ceded			Net			Gross 3 year survival ratio	Gross 1 year survival ratio
Balance at December 31, 2003	$	2,899		$	2,622		$	277		10.3x	9.9x
Prior period development		—			—			—
Losses and loss expenses paid		(96	)		(48	)		(48	)
Foreign exchange revaluation		21			11			10
Balance at March 31, 2004	$	2,824		$	2,585		$	239
Prior period development		6			4			2
Losses and loss expenses paid		(138	)		(88	)		(50	)
Foreign exchange revaluation		(7	)		2			(9	)
Balance at June 30, 2004	$	2,685		$	2,503		$	182

	Environmental & Other Latent Exposures
	Gross			Ceded			Net
Balance at December 31, 2003	$	1,148		$	898		$	250
Prior period development		—			—			—
Losses and loss expenses paid		(47	)		(13	)		(34	)
Foreign exchange revaluation		3			1			2
Balance at March 31, 2004	$	1,104		$	886		$	218
Prior period development		—			—			—
Losses and loss expenses paid		(56	)		(18	)		(38	)
Foreign exchange revaluation		(3	)		(1	)		(2	)
Balance at June 30, 2004	$	1,045		$	867		$	178

* The survival ratios are adversely affected by the timing of certain previously agreed upon settlements. These payments were anticipated in our 2002 asbestos study.

Loss Reserves - A&E Page 17

ACE Limited

Reinsurance Recoverable Analysis

(in millions of U.S. dollars)

(Unaudited)

	June 30 2004			March 31 2004			December 31 2003			December 31 2002
Net Reinsurance Recoverable by Division
Reinsurance recoverable on paid losses & loss expenses
Active operations(1)	$	716		$	761		$	835		$	951
Brandywine(2)		478			405			419			385
Westchester(3)		28			26			23			27
Total	$	1,222		$	1,192		$	1,277		$	1,363
Reinsurance recoverable on unpaid losses & loss expenses
Active operations(1)	$	9,397		$	8,954		$	8,494		$	7,839
Brandywine(2)		4,229			4,340			4,729			5,237
Westchester(3)		525			539			541			491
Total	$	14,151		$	13,833		$	13,764		$	13,567
Gross reinsurance recoverable
Active operations(1)	$	10,113		$	9,715		$	9,329		$	8,790
Brandywine(2)		4,707			4,745			5,148			5,622
Westchester(3)		553			565			564			518
Total	$	15,373		$	15,025		$	15,041		$	14,930
Bad debt reserve
Active operations(1)	$	(554	)	$	(510	)	$	(482	)	$	(431	)
Brandywine(2)		(416	)		(424	)		(449	)		(478	)
Westchester(3)		(29	)		(29	)		(29	)		(30	)
Total	$	(999	)	$	(963	)	$	(960	)	$	(939	)
Net reinsurance recoverable
Active operations(1)	$	9,559		$	9,205		$	8,847		$	8,359
Brandywine(2)		4,291			4,321			4,699			5,144
Westchester(3)		524			536			535			488
Total	$	14,374		$	14,062		$	14,081		$	13,991

(1) Active operations include the run-off operations of CIS and certain other divisions.

(2) The Active operations’ obligations with respect to further funding of the run-off of Century Indemnity Company, a Brandywine subsidiary, are limited under the Brandywine Restructuring Order (the “Order”). Under the Order, the Company provided $800 million aggregate excess of loss reinsurance agreement, with respect to the Brandywine Runoff. (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 filed Form 10-K for the year ended December 31, 2003 for additional information about the Order and other Company obligations.) At June 30, 2004, approximately $466 million in losses and recoverable bad debt reserves were ceded by Century to the aggregate excess of loss reinsurance agreement.

(3) As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At June 30, 2004, the remaining unimpaired limit in the reinsurance cover was approximately $600 million.

Reinsurance Recoverable Page 18

ACE Limited

Reinsurance Recoverable Analysis

(in millions of U.S. dollars)

(Unaudited)

	March 31, 2004
	Recoverable		Bad Debt		% of Gross
Reinsurance Recoverable for Active Operations
Categories
Top 10 reinsurers	$	4,414	$	71	1.6	%
Other reinsurers balances >$20 million		2,414		77	3.2	%
Other reinsurers balances <$20 million		941		110	11.7	%
Mandatory pools and government agencies		696		3	0.4	%
Captives		796		1	0.1	%
Other(1)		454		248	54.6	%
Total	$	9,715	$	510	5.2	%

At March 31, 2004, $7.1 billion of the active operations’ recoverables were from rated reinsurers, of which 86% were rated the equivalent of A- or better by nationally recognized rating agencies. The Company held collateral of $2.1 billion, of which $1.4 billion was matched and usable against existing recoverables.

Top 10 Reinsurers (net of collateral)(2)	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
Berkshire Hathaway Insurance Group	AIOI Insurance	Gerling Group
CIGNA	Allianz Group	Hartford Insurance Group
Electric Insurance Company	American International Group	Independence Blue Cross (Amerihealth)
GE Global Insurance Group	Arch Capital	ING - Internationale Nederlanden Group
Hannover	Aspen Insurance Holdings Ltd	Liberty Mutual Insurance Companies
Lloyd’s of London	AVIVA	Overseas Partners Ltd
Munich Re	AXA	Renaissance Re Holdings Ltd
St. Paul Travelers Companies	Chubb Insurance Group	Royal & Sun Alliance Insurance Group
Swiss Re Group	CNA Insurance Companies	SCOR Group
XL Capital Group	Converium Group	Sompo Japan
	DaimlerChrysler Insurance Company	Toa Reinsurance Company
	Equitas	Trenwick Group
	Everest Re Group	White Mountains Insurance Group
	Fairfax Financial	WR Berkley Corp
	FM Global Group	Zurich Financial Services Group

⁽¹⁾ Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of the reserve for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.

⁽²⁾ Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.

Rein Rec-Active Page 19

ACE Limited

Reinsurance Recoverable Analysis

(in millions of U.S. dollars)

(Unaudited)

	March 31, 2004
	Recoverable		Bad Debt		% of Gross
Consolidated Reinsurance Recoverable
Categories
Top 10 reinsurers	$	7,885	$	94	1.2	%
Other reinsurers balances >$20 million		3,146		132	4.2	%
Other reinsurers balances <$20 million		1,071		145	13.5	%
Mandatory pools and government agencies		718		3	0.4	%
Structured settlements		425		2	0.5	%
Captives		813		1	0.1	%
Other		967		586	60.6	%
Total	$	15,025	$	963	6.4	%

At March 31, 2004, $11.2 billion of consolidated recoverables were from rated reinsurers, of which 89% were rated the equivalent of A- or better by nationally recognized rating agencies.

Top 10 Reinsurers (net of collateral)(2)	Other Reinsurers Balances Greater Than $20 million (net of collateral)(2)
Berkshire Hathaway Insurance Group	AIOI Insurance	Hartford Insurance Group
CIGNA	Allianz Group	Independence Blue Cross (Amerihealth)
Equitas	American International Group	ING - Internationale Nederlanden Group
GE Global Insurance Group	Arch Capital	IRB - Brasil Resseguros S.A.
Hannover	Aspen Insurance Holdings Ltd	Liberty Mutual Insurance Companies
Lloyd’s of London	AVIVA	Millea Holdings
Munich Re	AXA	Mitsui Sumitomo Insurance Company Ltd
St. Paul Travelers Companies	Chubb Insurance Group	Overseas Partners Ltd
Swiss Re Group	CNA Insurance Companies	QBE Insurance
XL Capital Group	Constellation Reinsurance Co	Renaissance Re Holdings Ltd
	Converium Group	Royal & Sun Alliance Insurance Group
	DaimlerChrysler Insurance Company	SCOR Group
	Dominion Ins. Co. Ltd	Sompo Japan
	Electric Insurance Company	Toa Reinsurance Company
	Everest Re Group	Trenwick Group
	Fairfax Financial	White Mountains Insurance Group
	FM Global Group	WR Berkley Corp
	Gerling Group	Zurich Financial Services Group
	Great American P&C Insurance Companies

⁽¹⁾ Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of the reserve for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.

⁽²⁾ Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.

Rein Rec-Consolidated Page 20

ACE Limited

Reinsurance Recoverable Analysis - 4

(in millions of U.S. dollars)

(Unaudited)

	General Collections (1)			Other (2)			Total
Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses
Gross balance at December 31, 2003	$	730		$	547		$	1,277
Bad debt reserve at 12/31/03		45			358			403
% of gross		6.2	%		65.4	%		31.6	%
Net balance at December 31, 2003	$	685		$	189		$	874
Gross balance at March 31, 2004	$	639		$	553		$	1,192
Bad debt reserve at 3/31/04		44			378			422
% of gross		6.9	%		68.4	%		35.4	%
Net balance at March 31, 2004	$	595		$	175		$	770
Gross balance at June 30, 2004	$	619		$	603		$	1,222
Bad debt reserve at 6/30/04		35			405			440
% of gross		5.7	%		67.2	%		36.8	%
Net balance at June 30, 2004	$	584		$	198		$	782

⁽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.

⁽²⁾ Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of the reserve for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.

Reinsurance Recoverable 4 Page 21

ACE Limited

Investment Portfolio

(in millions of U.S. dollars)

(Unaudited)

	June 30 2004			March 31 2004			December 31 2003
Market Value
Fixed maturities	$	18,348		$	19,920		$	18,645
Securities on loan		1,515			1,183			684
Short-term investments		4,040			3,290			2,928
Cash		663			614			562
Total	$	24,566		$	25,007		$	22,819
Asset Allocation by Market Value
Treasury	$	1,773		$	1,491		$	1,715
Agency		1,217			1,723			1,512
Corporate		6,809			7,201			6,304
Mortgage-backed securities		4,405			4,536			3,894
Asset-backed securities		832			800			737
Municipal		623			1,498			1,445
Non-US		4,203			3,854			3,723
Cash & cash equivalent		4,704			3,904			3,489
Total	$	24,566		$	25,007		$	22,819
Credit Quality by Market Value
AAA	$	12,780		$	13,211		$	12,315
AA		4,159			4,200			3,389
A		3,901			3,847			3,534
BBB		2,048			2,002			1,783
BB		664			653			709
B		973			1,045			1,029
Other		41			49			60
Total	$	24,566		$	25,007		$	22,819
Cost/Amortized Cost
Fixed maturities	$	18,226		$	19,129		$	18,006
Securities on loan		1,488			1,113			650
Short term investments		4,040			3,290			2,928
Cash		663			614			562
Subtotal		24,417			24,146			22,146
Equity securities		846			414			401
Other investments		1,143			595			602
Total	$	26,406		$	25,155		$	23,149
Avg. duration of fixed maturities, adj. for int. rate swaps		3.6 years			3.4 years			3.4 years
Avg. market yield of fixed maturities		4.6	%		3.6	%		4.0	%
Avg. credit quality		AA			AA			AA

Investments Page 22

ACE Limited

Investment Portfolio - 2

(in millions of U.S. dollars)

(Unaudited)

Investment portfolio

Top 10 Exposures - Fixed Maturity Investments excluding Assured Guaranty						Including Assured Guaranty (Single Name Credit Default Swaps)
			(Restated)			(As Originally Reported)
June 30, 2004			March 31, 2004			March 31, 2004
HSBC Holdings Plc	$	187	HSBC Holdings Plc	$	200	General Electric	$	257
Citigroup Inc		174	General Electric		195	Citigroup Inc		214
General Electric		167	Citigroup Inc		166	HSBC Holdings Plc		189
General Motors		130	Goldman Sachs Group Inc		123	Morgan Stanley		145
Goldman Sachs Group Inc		124	Morgan Stanley		117	General Motors		129
Bank of America Corp		121	General Motors		114	Verizon Communications		124
Morgan Stanley		114	Bank of America Corp		106	Goldman Sachs Group Inc		120
JP Morgan Chase & Co.		102	Ford Motor Co		89	Bank of America Corp		116
Ford Motor Co		100	Verizon Communications		83	American International Group		115
Verizon Communications		91	Vodafone Group PLC		82	Ford Motor Co		97

Investments 2 Page 23

ACE Limited

Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

(Unaudited)

	Three months ended June 30, 2004						Six months ended June 30, 2004
	Net Realized Gains (Losses) (1)		Net Unrealized Gains (Losses)		Net Impact		Net Realized Gains (Losses) (1)		Net Unrealized Gains (Losses)		Net Impact
Investment Portfolio Gains (Losses)
Fixed maturities	$	(7)	$	(704)	$	(711)	$	48	$	(529)	$	(481)
Interest rate swaps		27		—		27		13		—		13
Equity securities		40		(27)		13		68		(31)		37
Equity and fixed income derivatives		3		—		3		16		—		16
Foreign exchange gains (losses)		(8)		—		(8)		(3)		—		(3)
Other		(4)		26		22		(11)		30		19
Total inv. portfolio gains (losses)		51		(705)		(654)		131		(530)		(399)
Other FAS 133 adjustments		(8)		—		(8)		(31)		—		(31)
Total gains (losses)		43		(705)		(662)		100		(530)		(430)
Income tax (expense) benefit		(10)		171		161		(31)		123		92
Net gains (losses)	$	33	$	(534)	$	(501)	$	69	$	(407)	$	(338)

(1) Includes impairments of $3M for fixed maturities and $2M for equities. Year to date includes impairments of $4M for fixed maturities and $3M for equities.

	Three months ended June 30, 2003									Six months ended June 30, 2003
	Net Realized Gains (Losses) (2)			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) (2)			Net Unrealized Gains (Losses)			Net Impact
Investment Portfolio Gains (Losses)
Fixed maturities	$	49		$	254		$	303		$	61		$	310		$	371
Interest rate swaps		(5	)		—			(5	)		(14	)		—			(14	)
Equity securities		(4	)		79			75			(54	)		113			59
Equity and fixed income derivatives		20			—			20			20			—			20
Foreign exchange gains (losses)		6			—			6			15			—			15
Other		(11	)		7			(4	)		(11	)		5			(6	)
Total inv. portfolio gains (losses)		55			340			395			17			428			445
Other FAS 133 adjustments		52			—			52			50			—			50
Total gains (losses)		107			340			447			67			428			495
Income tax (expense) benefit		(22	)		(67	)		(89	)		(14	)		(76	)		(90	)
Net gains (losses)	$	85		$	273		$	358		$	53		$	352		$	405

(2) The quarter includes impairments of $1M for fixed maturities, $8M for equities and $16M for other. Year to date includes impairments of $19M for fixed maturities, $54M for equities and $16M for other.

Investment Gains (Losses) Page 24

ACE Limited

Capital Structure

(in millions of U.S. dollars)

(Unaudited)

	June 30 2004			March 31 2004			December 31 2003			December 31 2002
Total short-term debt	$	546		$	546		$	546		$	146
Total long-term debt(1)		1,849			1,349			1,349			1,749
Total debt		2,395			1,895			1,895			1,895
Total trust preferreds		487			487			475			475
Mezzanine equity(2)		—			—			—			311
Perpetual preferred(3)		557			557			557			—
Ordinary shareholders’ equity		8,663			8,840			8,278			6,389
Total shareholders’ equity	$	9,220		$	9,397		$	8,835		$	6,389
Total capitalization	$	12,102		$	11,779		$	11,205		$	9,070
Tangible shareholders’ equity(4)	$	6,606		$	6,698		$	6,124		$	3,672
Leverage ratios
Debt/ total capitalization		19.8	%		16.1	%		16.9	%		20.9	%
Debt plus trust preferreds/ total capitalization		23.8	%		20.2	%		21.2	%		26.1	%
Debt/ tangible equity		36.3	%		28.3	%		30.9	%		51.6	%
Debt plus trust preferreds and mezzanine equity/ tangible equity		43.6	%		35.6	%		38.7	%		73.0	%
Debt plus total preferred stock/ total capitalization		28.4	%		25.0	%		26.1	%		26.1	%

(1) Long-term debt increased due to the early issuance of $500 million of senior debt which will be used to settle $400 million of short term debt and to redeem $75 million of trust preferred securities in the third quarter of 2004.

(2) The FELINE PRIDES converted in the second quarter of 2003.

(3) Preferred shares $575 million, net of issuance costs $18 million.

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

Capital Structure Page 25

ACE Limited

Non-GAAP Financial Measures

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures

In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. A reconciliation of book value per share to diluted book value per ordinary share is provided on page 27. The following non-GAAP measure is a common performance measurement and is defined as income (loss) excluding net realized gains (losses) on investments and the tax benefit (expense) on net realized gains (losses) on investments. 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. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full Year 2003
Net income, as reported	$	413		$	447		$	444		$	355		$	371		$	860		$	618		$	1,417
Net realized gains (losses)		43			57			128			57			107			100			67			252
Tax benefit (expense) on net realized gains (losses)		(10	)		(21	)		(12	)		(6	)		(22	)		(31	)		(14	)		(32	)
Income excluding net realized gains (losses)	$	380		$	411		$	328		$	304		$	286		$	791		$	565		$	1,197

Reconciliation Non-GAAP Page 26

ACE Limited

Diluted Book Value per Ordinary Share

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

(Unaudited)

Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share

	June 30 2004			March 31 2004			December 31 2003
Shareholders’ equity	$	9,220		$	9,397		$	8,835
Net proceeds from assumed conversions of options		331			622			390
Proceeds from issuance of preferred shares		(557	)		(557	)		(557	)
Numerator for diluted book value per share calculation		8,994			9,462			8,668
Less: goodwill		2,614			2,699			2,711
Numerator for diluted tangible book value per share	$	6,380		$	6,763		$	5,957
Ordinary shares outstanding - end of period		283,604,445			282,714,909			279,897,193
Shares issued from assumed conversions of options		11,670,422			18,951,480			14,305,419
Denominator for diluted and diluted tangible book value		295,274,867			301,666,389			294,202,612
Book value per ordinary share	$	30.55		$	31.27		$	29.57
Diluted book value per ordinary share	$	30.46		$	31.36		$	29.46
Diluted tangible book value per ordinary share	$	21.61		$	22.41		$	20.25

Reconciliation Book Value Page 27

ACE Limited

Comprehensive Income

(in millions of U.S. dollars)

(Unaudited)

Consolidated Statement of Comprehensive Income	2Q-04			1Q-04			4Q-03			3Q-03			2Q-03			YTD 2004			YTD 2003			Full` Year 2003
Net income	$	413		$	447		$	444		$	355		$	371		$	860		$	618		$	1,417
Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments		(622	)		236			3			(165	)		354			(386	)		466			304
Reclassification adjustment for net realized gains (losses) included in net income		(83	)		(61	)		(19	)		(24	)		(14	)		(144	)		(38	)		(81	)
Cumulative translation adjustment		(24	)		2			62			(1	)		57			(22	)		83			144
Minimum pension liability adjustment		1			(2	)		8			(3	)		(59	)		(1	)		(59	)		(54	)
Income tax (expense) benefit related to other comprehensive income items		180			(41	)		(2	)		48			(63	)		139			(79	)		(33	)
Other comprehensive income (loss)		(548	)		134			52			(145	)		275			(414	)		373			280
Comprehensive income (loss)	$	(135	)	$	581		$	496		$	210		$	646		$	446		$	991		$	1,697

Comprehensive Income Page 28

ACE Limited

Glossary

Annualized return on ordinary shareholders’ equity (ROE):Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shareholders’ equity for the period. To annualize a quarterly rate multiply by four.

Combined ratio:The 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. Calculated on a GAAP basis.

Diluted book value per ordinary share: 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.

Diluted tangible book value per ordinary share:Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued.

Effective tax rate:Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).

FAS 115:Unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity.

Life underwriting income:Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses.

NM: Not meaningful.

Ordinary shareholders’ equity:Shareholders’ equity less perpetual preferred shares.

P & C: Property and casualty.

Property and casualty combined ratios:Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios excluding life reinsurance business and financial services segment. Calculated on a GAAP basis.

Return on ordinary shareholders’ equity (ROE):Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shareholders’ equity.

Tangible equity:Shareholders’ equity less goodwill.

Total capitalization:Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders’ equity.

YTD:Year to date.

Glossary Page 29