Chubb Limited (CB) 8-K Ace Limited Reports Fourth Quarter, Year-end Results

Investor Contact

Helen M. Wilson

Phone: (441) 299-9283

Fax: (441) 292-8675

email: investorrelations@ace.bm

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.

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, judicial, legislative and other governmental 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
	- Consolidated Financial Highlights Excluding A&E and Catastrophe Loss Charges	2
II.	Consolidated Results
	- Consolidated Results - Consecutive Quarters	3-4
	- Computation of Basic and Diluted Earnings Per Share	5
	- Summary Consolidated Balance Sheets	6
	- Consolidated Premiums by Line of Business	7
	- Consolidating Statement of Operations	8-9
III.	Segment Results
	- Insurance-North American	10
	- Insurance-Overseas General	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 share, per share data and ratios)

(Unaudited)

	Three months ended December 31						% Change 4Q-04 vs. 4Q-03		Year ended December 31						% Change YTD -04 vs. YTD-03
	2004			2003					2004			2003
Gross premiums written	$	3,659		$	3,668		0	%	$	16,097		$	14,637		10	%
Net premiums written	$	2,655		$	2,573		3	%	$	11,528		$	10,215		13	%
Net premiums earned	$	2,895		$	2,827		2	%	$	11,136		$	9,602		16	%
Net investment income	$	275		$	228		21	%	$	1,001		$	861		16	%
Net income	$	282		$	444		-36	%	$	1,139		$	1,417		-20	%
Income excluding net realized gains (losses)(1)	$	166		$	328		-49	%	$	988		$	1,197		-17	%
Comprehensive income	$	410		$	496		-17	%	$	1,155		$	1,697		-32	%
Operating cash flow	$	875		$	1,586		-45	%	$	4,953		$	4,224		17	%
Combined ratio
Loss and loss expense ratio		77.9	%		66.8	%				70.7	%		65.0	%
Underwriting and administrative expense ratio		26.1	%		25.1	%				25.9	%		26.5	%
Combined ratio		104.0	%		91.9	%				96.6	%		91.5	%
Annualized ROE*		6.8	%		15.8	%				10.7	%		15.8	%
Annualized ROE, excluding FAS 115*		7.3	%		17.3	%				11.6	%		17.2	%
Diluted earnings per share
Income excluding net realized gains (losses)(1)	$	0.54		$	1.12		-52	%	$	3.30		$	4.21		-22	%
Net income	$	0.94		$	1.53		-39	%	$	3.83		$	5.01		-24	%
Diluted book value per ordinary share	$	32.48		$	29.46		10	%	$	32.48		$	29.46		10	%
Diluted tangible book value per ordinary share	$	23.63		$	20.25		17	%	$	23.63		$	20.25		17	%
Weighted average diluted ordinary shares outstanding		286.0			282.6					285.5			275.7
Debt/ total capitalization		16.3	%		16.9	%				16.3	%		16.9	%

(1) See page 26 Non-GAAP Financial Measures.

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

Financial Highlights Page 1

ACE Limited   Consolidated Financial Highlights Excluding A&E(1) and Catastrophe Loss Charges   (in millions of U.S. dollars, except per share data and ratios)   (Unaudited)

	Three months ended December 31, 2004												Three months ended December 31, 2003
	As reported			A&E(1) loss charge			Catastrophe loss charge			Adjusted(3)			As reported			Catastrophe loss charge			Adjusted(3)
Net premiums earned(2)	$	2,840		$	—		$	—		$	2,840		$	2,779		$	—		$	2,779
Losses and loss expenses(2)	$	2,213		$	(465	)	$	(31	)	$	1,717		$	1,857		$	(35	)	$	1,822
Income tax expense (benefit) (2)	$	(28	)	$	163		$	—		$	135		$	71		$	—		$	71
Net income	$	282		$	302		$	31		$	615		$	444		$	35		$	479
Income excluding net realized gains (losses)(3)	$	166		$	302		$	31		$	499		$	328		$	35		$	363
Combined ratio
Loss and loss expense ratio		77.9	%		-16.3	%		-1.1	%		60.5	%		66.8	%		-1.2	%		65.6	%
Underwriting and administrative expense ratio		26.1	%		0.0	%		0.0	%		26.1	%		25.1	%		0.0	%		25.1	%
Combined ratio		104.0	%		-16.3	%		-1.1	%		86.6	%		91.9	%		-1.2	%		90.7	%
Diluted earnings per share
Income excluding net realized gains (losses)(3)	$	0.54		$	1.06		$	0.11		$	1.71		$	1.12		$	0.12		$	1.24
Net income	$	0.94		$	1.06		$	0.11		$	2.11		$	1.53		$	0.12		$	1.65
	Year ended December 31, 2004												Year ended December 31, 2003
	As reported			A&E(1) loss charge			Catastrophe loss charges			Adjusted(3)			As reported			Catastrophe loss charge			Adjusted(3)
Net premiums earned(2)	$	10,916		$	—		$	11		$	10,927		$	9,418		$	—		$	9,418
Losses and loss expenses(2)	$	7,714		$	(465	)	$	(499	)	$	6,750		$	6,118		$	(112	)	$	6,006
Income tax expense (benefit) (2)	$	276		$	163		$	73		$	512		$	278		$	7		$	285
Net income	$	1,139		$	302		$	437		$	1,878		$	1,417		$	105		$	1,522
Income excluding net realized gains (losses)(3)	$	988		$	302		$	437		$	1,727		$	1,197		$	105		$	1,302
Combined ratio
Loss and loss expense ratio		70.7	%		-4.2	%		-4.7	%		61.8	%		65.0	%		-1.2	%		63.8	%
Underwriting and administrative expense ratio		25.9	%		0.0	%		-0.1	%		25.8	%		26.5	%		0.0	%		26.5	%
Combined ratio		96.6	%		-4.2	%		-4.8	%		87.6	%		91.5	%		-1.2	%		90.3	%
Diluted earnings per share
Income excluding net realized gains (losses)(3)	$	3.30		$	1.06		$	1.53		$	5.89		$	4.21		$	0.38		$	4.59
Net income	$	3.83		$	1.06		$	1.53		$	6.42		$	5.01		$	0.38		$	5.39

(1) Asbestos, environmental and other run-off loss charges (A&E).

(2) ACE Limited consolidated excluding Life

(3) See page 26 Non-GAAP Financial Measures.

Financial Highlights (2) Page 2

ACE Limited   Consolidated Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

ACE Limited Consolidated

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Property and Casualty(1)
Gross premiums written	$	3,575		$	3,854		$	3,969		$	4,155		$	3,330			15,553		$	13,398
Net premiums written		2,574			2,641			2,798			2,979			2,250			10,992			8,991
Net premiums earned		2,744			2,682			2,600			2,370			2,307			10,396			8,317
Losses and loss expenses		2,116			2,118			1,636			1,456			1,429			7,326			5,224
Policy acquisition costs		406			378			381			349			363			1,514			1,280
Administrative expenses		335			321			298			290			295			1,244			1,073
P& C underwriting income (loss)	$	(113	)	$	(135	)	$	285		$	275		$	220		$	312		$	740
Financial Services underwriting income (loss)		(3	)		(11	)		26			58			4			70			62
Life underwriting income (loss) excluding investment income		11			5			3			3			(2	)		22			(16	)
Net investment income		275			252			236			238			228			1,001			861
Other (income) expense		—			(21	)		6			17			19			2			27
Net realized gains (losses)		128			(33	)		43			57			128			195			252
Interest expense		44			48			47			44			44			183			177
Income tax expense		(28	)		54			127			123			71			276			278
Net income (loss)	$	282		$	(3	)	$	413		$	447		$	444		$	1,139		$	1,417
Net realized gains (losses)		128			(33	)		43			57			128			195			252
Tax expense on net realized gains (losses)		12			1			10			21			12			44			32
Income excluding net realized gains (losses)(2)	$	166		$	31		$	380		$	411		$	328		$	988		$	1,197
% Change versus prior year period(1)
Gross premiums written		7	%		17	%		22	%		18	%		13	%		16	%		21	%
Net premiums written		14	%		23	%		25	%		26	%		32	%		22	%		40	%
Net premiums earned		19	%		25	%		27	%		31	%		41	%		25	%		50	%
Other ratios
Net premiums written/gross premiums written		72	%		69	%		70	%		72	%		68	%		71	%		67	%
Effective tax rate on income excluding net realized gains (losses)		-32	%		63	%		24	%		20	%		15	%		19	%		17	%
ROE
Annualized ROE*		6.8	%		0.9	%		16.9	%		18.7	%		15.8	%		10.7	%		15.8	%
Annualized ROE, excluding FAS 115*		7.3	%		0.9	%		17.7	%		20.4	%		17.3	%		11.6	%		17.2	%

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

(2) See page 26 Non-GAAP Financial Measures.

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

Consolidated Results Page 3

ACE Limited   Consolidated Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

ACE Limited Consolidated

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Combined ratio
Loss and loss expense ratio		77.9	%		80.0	%		63.1	%		60.5	%		66.8	%		70.7	%		65.0	%
Policy acquisition cost ratio		14.3	%		13.6	%		14.3	%		14.1	%		13.6	%		14.1	%		14.2	%
Administrative expense ratio		11.8	%		11.6	%		11.3	%		12.3	%		11.5	%		11.8	%		12.3	%
Combined ratio		104.0	%		105.2	%		88.7	%		86.9	%		91.9	%		96.6	%		91.5	%
Property and Casualty (1)
	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Combined ratio
Loss and loss expense ratio		77.1	%		78.9	%		62.9	%		61.5	%		61.9	%		70.5	%		62.8	%
Policy acquisition cost ratio		14.8	%		14.1	%		14.6	%		14.7	%		15.8	%		14.6	%		15.4	%
Administrative expense ratio		12.2	%		12.0	%		11.5	%		12.2	%		12.8	%		12.0	%		12.9	%
Combined ratio		104.1	%		105.0	%		89.0	%		88.4	%		90.5	%		97.1	%		91.1	%
Large losses and other items
Asbestos, environmental and other run-off losses	$	465		$	—		$	—		$	—		$	—		$	465		$	—
Catastrophe and other large losses	$	31		$	457		$	—		$	—		$	35		$	488		$	112
Prior period development(2)	$	109		$	12		$	25		$	(6	)	$	14		$	140		$	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 4

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 December 31						Year ended December 31
	2004			2003			2004			2003
Numerator
Income excluding net realized gains (losses)(1)	$	166		$	328		$	988		$	1,197
Perpetual preferred dividend		(12	)		(11	)		(45	)		(26	)
Mezzanine equity dividend		—			—			—			(10	)
Income to ordinary shares, excl. net realized gains (losses)		154			317			943			1,161
Net realized gains (losses), net of income tax		116			116			151			220
Net income available to the holders of ordinary shares	$	270		$	433		$	1,094		$	1,381
Rollforward of ordinary shares
Ordinary shares - beginning of period		284,112,866			278,480,910			279,897,193			262,679,356
Issued under employee stock purchase plan		45			326			239,776			288,726
Stock (cancelled) granted		(52,375	)		(167,902	)		790,984			898,869
Issued for option exercises		417,989			1,583,859			3,550,572			4,215,968
Mezzanine equity conversion		—			—			—			11,814,274
Ordinary shares - end of period		284,478,525			279,897,193			284,478,525			279,897,193
Denominator
Weighted average shares outstanding		281,308,706			276,705,797			280,271,225			270,620,114
Effect of other dilutive securities		4,739,358			5,941,845			5,216,629			5,035,855
Adj. wtd. avg. shares outstanding and assumed conversions		286,048,064			282,647,642			285,487,854			275,655,969
Basic earnings per share
Income excluding net realized gains (losses)(1)	$	0.55		$	1.14		$	3.36		$	4.29
Net realized gains (losses)		0.41			0.42			0.54			0.81
Net income	$	0.96		$	1.56		$	3.90		$	5.10
Diluted earnings per share
Income excluding net realized gains (losses)(1)	$	0.54		$	1.12		$	3.30		$	4.21
Net realized gains (losses)		0.40			0.41			0.53			0.80
Net income	$	0.94		$	1.53		$	3.83		$	5.01

(1) See page 26 Non-GAAP Financial Measures.

Earning per share Page 5

ACE Limited   Summary Consolidated Balance Sheets   (in millions of U.S. dollars, except per share data)

	December 31 2004		September 30 2004		June 30 2004		March 31 2004		December 31 2003
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
Assets
Fixed maturities available for sale, at fair value	$	21,739	$	20,791	$	18,348	$	19,920	$	18,645
Equity securities, at fair value		1,229		960		953		539		544
Securities on loan, at fair value		1,038		1,044		1,515		1,183		684
Short-term investments		3,199		3,360		4,040		3,290		2,928
Other investments		1,301		1,228		1,216		643		645
Total investments		28,506		27,383		26,072		25,575		23,446
Cash		534		626		663		614		562
Insurance and reinsurance balances receivable		3,272		3,379		3,567		3,493		2,837
Reinsurance recoverable		15,254		14,268		14,374		14,062		14,081
Deferred policy acquisition costs		944		975		969		1,108		1,005
Prepaid reinsurance premiums		1,320		1,653		1,652		1,578		1,372
Goodwill		2,612		2,612		2,614		2,699		2,711
Deferred tax assets		1,161		1,015		1,115		997		1,090
Other assets		2,739		2,544		2,625		2,352		2,449
Total assets	$	56,342	$	54,455	$	53,651	$	52,478	$	49,553
Liabilities
Unpaid losses and loss expenses	$	31,513	$	29,603	$	28,224	$	27,697	$	27,155
Unearned premiums		5,923		6,466		6,555		6,930		6,051
Future policy benefits for life and annuity contracts		509		521		505		496		492
Insurance and reinsurance balances payable		2,308		2,273		2,280		2,145		1,903
Deposit liabilities		343		220		221		217		212
Securities lending collateral		1,059		1,068		1,542		1,208		698
Payable for investments purchased		717		879		726		570		369
Accounts payable, accrued expenses and other liabilities		1,727		1,539		1,496		1,436		1,468
Short-term debt		146		146		546		546		546
Long-term debt		1,849		1,849		1,849		1,349		1,349
Trust preferred securities		412		412		487		487		475
Total liabilities		46,506		44,976		44,431		43,081		40,718
Shareholders’ equity
Total shareholders’ equity, excl. AOCI		9,100		8,871		8,915		8,543		8,115
Accumulated other comprehensive income (AOCI)		736		608		305		854		720
Total shareholders’ equity		9,836		9,479		9,220		9,397		8,835
Total liabilities and shareholders’ equity	$	56,342	$	54,455	$	53,651	$	52,478	$	49,553
Diluted book value per ordinary share	$	32.48	$	31.29	$	30.46	$	31.36	$	29.46
Diluted tangible book value per ordinary share	$	23.63	$	22.44	$	21.61	$	22.41	$	20.25

Consol Bal Sheet Page 6

ACE Limited   Consolidated Premiums by Line of Business   (in millions of U.S. dollars)   (Unaudited)

ACE Limited Consolidated

	4Q-04		% of Total Consolidated		4Q-03		% of Total Consolidated		% Change 4Q-04 vs. 4Q-03		Full Year 2004		% of Total Consolidated		Full Year 2003		% of Total Consolidated		% Change 2004 vs. 2003
Net premiums written
Property and all other	$	725	27	%	$	734	29	%	-1	%	$	3,439	30	%	$	3,048	30	%	13	%
Casualty		1,560	59	%		1,285	50	%	21	%		6,420	55	%		4,994	49	%	29	%
Personal accident		289	11	%		231	9	%	25	%		1,133	10	%		949	9	%	19	%
Total P&C		2,574	97	%		2,250	87	%	14	%		10,992	95	%		8,991	88	%	22	%
Global Re - life		55	2	%		47	2	%	17	%		220	2	%		185	2	%	19	%
Financial Services		26	1	%		276	11	%	-91	%		316	3	%		1,039	10	%	-70	%
Total Consolidated	$	2,655	100	%	$	2,573	100	%	3	%	$	11,528	100	%	$	10,215	100	%	13	%
Net premiums earned
Property and all other	$	900	31	%	$	829	29	%	9	%	$	3,350	30	%	$	2,899	30	%	16	%
Casualty		1,547	53	%		1,230	44	%	26	%		5,913	53	%		4,498	47	%	31	%
Personal accident		297	10	%		248	9	%	20	%		1,133	10	%		920	10	%	23	%
Total P&C		2,744	94	%		2,307	82	%	19	%		10,396	93	%		8,317	87	%	25	%
Global Re - life		55	2	%		48	2	%	15	%		220	2	%		184	2	%	20	%
Financial Services		96	4	%		472	16	%	-80	%		520	5	%		1,101	11	%	-53	%
Total Consolidated	$	2,895	100	%	$	2,827	100	%	2	%	$	11,136	100	%	$	9,602	100	%	16	%

Line of Business Page 7

ACE Limited   Consolidating Statement of Operations   Three months ended December 31, 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
December 31, 2004
Gross premiums written	$	1,898		$	1,392	$	285		$	—		$	3,575		$	29		$	3,604
Net premiums written		1,208			1,087		279			—			2,574			26			2,600
Net premiums earned		1,259			1,126		359			—			2,744			96			2,840
Losses and loss expenses		1,359			547		204			6			2,116			97			2,213
Policy acquisition costs		114			224		68			—			406			—			406
Administrative expenses		135			138		15			47			335			2			337
Underwriting income (loss)		(349	)		217		72			(53	)		(113	)		(3	)		(116	)
Life underwriting income (includes investment income)		—			—		20			—			20			—			20
Net investment income - property and casualty		129			69		39			—			237			29			266
Other (income) expense		1			15		(1	)		—			15			(15	)		—
Net realized gains (losses)		32			18		67			(2	)		115			13			128
Interest expense		6			—		—			38			44			—			44
Income tax expense (benefit)		(96	)		84		12			(32	)		(32	)		4			(28	)
Net income (loss)		(99	)		205		187			(61	)		232			50			282
Net realized gains (losses)		32			18		67			(2	)		115			13			128
Tax expense (benefit) on net realized gains (losses)		5			5		—			—			10			2			12
Income (loss) excluding net realized gains (losses) (1)	$	(126	)	$	192	$	120		$	(59	)	$	127		$	39		$	166
December 31, 2003
Gross premiums written	$	1,764		$	1,341	$	225		$	—		$	3,330		$	289		$	3,619
Net premiums written		1,048			982		220			—			2,250			276			2,526
Net premiums earned		991			1,007		309			—			2,307			472			2,779
Losses and loss expenses		660			603		166			—			1,429			428			1,857
Policy acquisition costs		108			197		58			—			363			16			379
Administrative expenses		109			130		17			39			295			24			319
Underwriting income (loss)		114			77		68			(39	)		220			4			224
Life underwriting income (includes investment income)		—			—		6			—			6			—			6
Net investment income - property and casualty		103			44		24			(4	)		167			53			220
Other (income) expense		8			3		(1	)		9			19			—			19
Net realized gains (losses)		24			1		8			3			36			92			128
Interest expense		6			—		—			37			43			1			44
Income tax expense (benefit)		50			24		5			(18	)		61			10			71
Net income (loss)		177			95		102			(68	)		306			138			444
Net realized gains (losses)		24			1		8			3			36			92			128
Tax expense (benefit) on net realized gains (losses)		—			—		1			—			1			11			12
Income (loss) excluding net realized gains (losses) (1)	$	153		$	94	$	95		$	(71	)	$	271		$	57		$	328

(1) See page 26 Non-GAAP Financial Measures.

Segment 2004 Qtr Page 8

ACE Limited   Consolidating Statement of Operations   Years ended December 31, 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
December 31, 2004
Gross premiums written	$	8,124		$	5,858		$	1,571		$	—		$	15,553		$	320		$	15,873
Net premiums written		5,098			4,370			1,524			—			10,992			316			11,308
Net premiums earned		4,678			4,322			1,396			—			10,396			520			10,916
Losses and loss expenses		3,902			2,426			973			25			7,326			388			7,714
Policy acquisition costs		440			803			271			—			1,514			22			1,536
Administrative expenses		482			554			65			143			1,244			40			1,284
Underwriting income (loss)		(146	)		539			87			(168	)		312			70			382
Life underwriting income (includes investment income)		—			—			55			—			55			—			55
Net investment income - property and casualty		460			233			126			2			821			147			968
Other (income) expense		5			25			(1	)		(1	)		28			(26	)		2
Net realized gains (losses)		124			47			34			7			212			(17	)		195
Interest expense		21			—			—			157			178			5			183
Income tax expense (benefit)		68			238			15			(80	)		241			35			276
Net income (loss)		344			556			288			(235	)		953			186			1,139
Net realized gains (losses)		124			47			34			7			212			(17	)		195
Tax expense (benefit) on net realized gains (losses)		22			14			—			—			36			8			44
Income (loss) excluding net realized gains (losses)(1)	$	242		$	523		$	254		$	(242	)	$	777		$	211		$	988
December 31, 2003
Gross premiums written	$	6,895		$	5,191		$	1,312		$	—		$	13,398		$	1,046		$	14,444
Net premiums written		4,015			3,751			1,225			—			8,991			1,039			10,030
Net premiums earned		3,654			3,563			1,100			—			8,317			1,101			9,418
Losses and loss expenses		2,521			2,144			559			—			5,224			894			6,118
Policy acquisition costs		387			682			211			—			1,280			61			1,341
Administrative expenses		402			486			62			123			1,073			84			1,157
Underwriting income (loss)	$	344		$	251		$	268		$	(123	)	$	740		$	62		$	802
Life underwriting income		—			—			17			—			17			—			17
Net investment income - property and casualty		403			155			87			(19	)		626			202			828
Other (income) expense		14			7			(3	)		9			27			—			27
Net realized gains (losses)		39			(6	)		34			(5	)		62			190			252
Interest expense		22			—			—			149			171			6			177
Income tax expense (benefit)		179			79			14			(58	)		214			64			278
Net income (loss)		571			314			395			(247	)		1,033			384			1,417
Net realized gains (losses)		39			(6	)		34			(5	)		62			190			252
Tax expense (benefit) on net realized gains (losses)		—			(5	)		—			—			(5	)		37			32
Income (loss) excluding net realized gains (losses) (1)	$	532		$	315		$	361		$	(242	)	$	966		$	231		$	1,197

(1) See page 26 Non-GAAP Financial Measures.

Segment 2004 YTD Page 9

ACE Limited   Segment Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

Insurance - North American

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Gross premiums written	$	1,898		$	2,219		$	2,102		$	1,905		$	1,764		$	8,124		$	6,895
Net premiums written		1,208			1,349			1,329			1,212			1,048			5,098			4,015
Net premiums earned		1,259			1,234			1,178			1,007			991			4,678			3,654
Losses and loss expenses		1,359			1,010			837			696			660			3,902			2,521
Policy acquisition costs		114			114			111			101			108			440			387
Administrative expenses		135			129			115			103			109			482			402
Underwriting income (loss)		(349	)		(19	)		115			107			114			(146	)		344
Net investment income		129			120			107			104			103			460			403
Other (income) expense		1			(2	)		3			3			8			5			14
Net realized gains (losses)		32			9			31			52			24			124			39
Interest expense		6			5			5			5			6			21			22
Income tax expense		(96	)		33			69			62			50			68			179
Net income (loss)		(99	)		74			176			193			177			344			571
Net realized gains (losses)		32			9			31			52			24			124			39
Tax expense on net realized gains (losses)		5			2			8			7			—			22			—
Income excluding net realized gains (losses) (1)	$	(126	)	$	67		$	153		$	148		$	153		$	242		$	532
Combined ratio
Loss and loss expense ratio		108.0	%		81.8	%		71.1	%		69.1	%		66.6	%		83.4	%		69.0	%
Policy acquisition cost ratio		9.0	%		9.3	%		9.5	%		10.0	%		10.9	%		9.4	%		10.6	%
Administrative expense ratio		10.7	%		10.5	%		9.7	%		10.3	%		11.1	%		10.3	%		11.0	%
Combined ratio		127.7	%		101.6	%		90.3	%		89.4	%		88.6	%		103.1	%		90.6	%
Large losses and other items (before tax)
Asbestos, environmental and other run-off losses	$	459		$	—		$	—		$	—		$	—		$	459		$	—
Catastrophe losses (before tax)	$	—		$	126		$	—		$	—		$	—		$	126		$	20
Prior period development	$	96		$	42		$	42		$	15		$	14		$	195		$	91
% Change versus prior year period
Gross premiums written		8	%		22	%		28	%		14	%		8	%		18	%		13	%
Net premiums written		15	%		27	%		37	%		30	%		28	%		27	%		38	%
Net premiums earned		27	%		25	%		28	%		34	%		34	%		28	%		48	%
Other ratios
Net premiums written/gross premiums written		64	%		61	%		63	%		64	%		59	%		63	%		58	%

(1) See page 26 Non-GAAP Financial Measures.

Insurance-North America Page 10

ACE Limited   Segment Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

Insurance - Overseas General

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Gross premiums written	$	1,392		$	1,292		$	1,500		$	1,674		$	1,341		$	5,858		$	5,191
Net premiums written		1,087			980			1,105			1,198			982			4,370			3,751
Net premiums earned		1,126			1,086			1,076			1,034			1,007			4,322			3,563
Losses and loss expenses		547			653			625			601			603			2,426			2,144
Policy acquisition costs		224			199			196			184			197			803			682
Administrative expenses		138			139			139			138			130			554			486
Underwriting income	$	217		$	95		$	116		$	111		$	77		$	539		$	251
Net investment income		69			61			55			48			44			233			155
Other (income) expense		15			3			4			3			3			25			7
Net realized gains (losses)		18			2			3			24			1			47			(6	)
Interest expense		—			—			—			—			—			—			—
Income tax expense		84			42			61			51			24			238			79
Net income	$	205		$	113		$	109		$	129		$	95		$	556		$	314
Net realized gains (losses)		18			2			3			24			1			47			(6	)
Tax expense (benefit) on net realized gains (losses)		5			1			1			7			—			14			(5	)
Income excluding net realized gains (losses) (1)	$	192		$	112		$	107		$	112		$	94		$	523		$	315
Combined ratio
Loss and loss expense ratio		48.6	%		60.1	%		58.1	%		58.1	%		59.8	%		56.1	%		60.2	%
Policy acquisition cost ratio		19.9	%		18.3	%		18.2	%		17.9	%		19.6	%		18.6	%		19.2	%
Administrative expense ratio		12.2	%		12.8	%		13.0	%		13.3	%		12.9	%		12.8	%		13.6	%
Combined ratio		80.7	%		91.2	%		89.3	%		89.3	%		92.3	%		87.5	%		93.0	%
Large losses and other items
Asbestos, environmental and other run-off losses	$	6		$	—		$	—		$	—		$	—		$	6		$	—
Large losses (before tax)	$	—		$	53		$	—		$	—		$	—		$	53		$	10
Prior period development	$	26		$	(8	)	$	(4	)	$	(8	)	$	11		$	6		$	57
% Change versus prior year period
Gross premiums written		4	%		8	%		21	%		19	%		11	%		13	%		26	%
Net premiums written		11	%		12	%		21	%		22	%		23	%		17	%		38	%
Net premiums earned		12	%		23	%		25	%		27	%		50	%		21	%		49	%
Other ratios
Net premiums written/gross premiums written		78	%		76	%		74	%		72	%		73	%		75	%		72	%

(1) See page 26 Non-GAAP Financial Measures.

Insurance-Overseas General Page 11

ACE Limited   Segment Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

Global Reinsurance

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Property and casualty
Gross premiums written	$	285		$	343		$	367		$	576		$	225		$	1,571		$	1,312
Net premiums written		279			312			364			569			220			1,524			1,225
Net premiums earned		359			362			346			329			309			1,396			1,100
Losses and loss expenses		204			436			174			159			166			973			559
Policy acquisition costs		68			65			74			64			58			271			211
Administrative expenses		15			16			15			19			17			65			62
P&C underwriting income (loss)		72			(155	)		83			87			68			87			268
Life
Gross premiums written		55			60			56			53			49			224			193
Net premiums written		55			59			55			51			47			220			185
Net premiums earned		55			60			54			51			48			220			184
Losses and loss expenses		38			48			44			42			44			172			181
Policy acquisition costs		5			6			6			5			5			22			16
Administrative expenses		1			1			1			1			1			4			3
Net investment income		9			8			8			8			8			33			33
Life underwriting income		20			13			11			11			6			55			17
Total underwriting income (loss)		92			(142	)		94			98			74			142			285
Net investment income - property and casualty		39			31			29			27			24			126			87
Other (income) expense		(1	)		—			—			—			(1	)		(1	)		(3	)
Net realized gains (losses)		67			(35	)		12			(10	)		8			34			34
Interest expense		—			—			—			—			—			—			—
Income tax expense		12			(1	)		1			3			5			15			14
Net income (loss)		187			(145	)		134			112			102			288			395
Net realized gains (losses)		67			(35	)		12			(10	)		8			34			34
Tax expense (benefit) on net realized gains (losses)		—			—			—			—			1			—			—
Income (loss) excluding net realized gains (losses) (1)	$	120		$	(110	)	$	122		$	122		$	95		$	254		$	361
P&C combined ratio
Loss and loss expense ratio		57.0	%		120.2	%		50.2	%		48.5	%		53.9	%		69.7	%		50.9	%
Policy acquisition cost ratio		19.0	%		18.0	%		21.4	%		19.4	%		18.9	%		19.4	%		19.2	%
Administrative expense ratio		4.0	%		4.5	%		4.5	%		5.6	%		5.5	%		4.6	%		5.6	%
P&C combined ratio		80.0	%		142.7	%		76.1	%		73.5	%		78.3	%		93.7	%		75.7	%
Large losses and other items
Large losses (before tax)	$	31		$	278		$	—		$	—		$	35		$	309		$	82
Prior period development	$	(13	)	$	(22	)	$	(13	)	$	(13	)	$	(11	)	$	(61	)	$	(27	)

(1) See page 26 Non-GAAP Financial Measures.

Global Reinsurance Page 12

ACE Limited   Segment Results - Consecutive Quarters - 2   (in millions of U.S. dollars)   (Unaudited)

Global Reinsurance - Property & Casualty

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
% Change versus prior year period
Gross premiums written		27	%		24	%		5	%		25	%		99	%		20	%		48	%
Net premiums written		27	%		44	%		6	%		28	%		134	%		24	%		58	%
Net premiums earned		16	%		32	%		29	%		33	%		42	%		27	%		62	%
Other ratios
Net premiums written/gross premiums written		98	%		91	%		99	%		99	%		98	%		97	%		93	%
Global Reinsurance - By Division
Gross premiums written
Tempest Europe	$	64		$	76		$	60		$	126		$	63		$	326		$	343
Tempest USA		204			205			224			253			148			886			528
Tempest Bermuda		17			62			83			197			14			359			441
Total	$	285		$	343		$	367		$	576		$	225		$	1,571		$	1,312
Net premiums written
Tempest Europe	$	61		$	74		$	54		$	122		$	53		$	311		$	314
Tempest USA		204			204			224			252			148			884			523
Tempest Bermuda		14			34			86			195			19			329			388
Total	$	279		$	312		$	364		$	569		$	220		$	1,524		$	1,225
Net premiums earned
Tempest Europe	$	76		$	77		$	75		$	75		$	72		$	303		$	259
Tempest USA		204			194			189			169			138			756			463
Tempest Bermuda		79			91			82			85			99			337			378
Total	$	359		$	362		$	346		$	329		$	309		$	1,396		$	1,100
Net premiums written/gross premiums written
Tempest Europe		95	%		97	%		90	%		97	%		84	%		95	%		92	%
Tempest USA		100	%		100	%		100	%		100	%		100	%		100	%		99	%
Tempest Bermuda		82	%		55	%		104	%		99	%		136	%		92	%		88	%
Total NPW/GPW		98	%		91	%		99	%		99	%		98	%		97	%		93	%

Global Reinsurance 2 Page 13

ACE Limited   Segment Results - Consecutive Quarters   (in millions of U.S. dollars)   (Unaudited)

Financial Services

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			FullYear 2004			Full Year 2003
Gross premiums written	$	29		$	68		$	15		$	208		$	289		$	320		$	1,046
Net premiums written		26			68			14			208			276			316			1,039
Net premiums earned		96			111			134			179			472			520			1,101
Losses and loss expenses		97			116			89			86			428			388			894
Policy acquisition costs		—			2			9			11			16			22			61
Administrative expenses		2			4			10			24			24			40			84
Underwriting income (loss)		(3	)		(11	)		26			58			4			70			62
Net investment income		29			29			36			53			53			147			202
Other (income) expense		(15	)		(22	)		—			11			—			(26	)		—
Net realized gains (losses)		13			(3	)		(32	)		5			92			(17	)		190
Interest expense		—			2			1			2			1			5			6
Income tax expense		4			—			11			20			10			35			64
Net income		50			35			18			83			138			186			384
Net realized gains (losses)		13			(3	)		(32	)		5			92			(17	)		190
Tax expense (benefit) on net realized gains (losses)		2			(2	)		1			7			11			8			37
Income excluding net realized gains (losses) (1)	$	39		$	36		$	51		$	85		$	57		$	211		$	231
Combined ratio
Loss and loss expense ratio		101.3	%		104.7	%		66.1	%		48.0	%		90.6	%		74.6	%		81.2	%
Policy acquisition cost ratio		-0.1	%		2.3	%		7.0	%		5.9	%		3.2	%		4.3	%		5.5	%
Administrative expense ratio		1.8	%		2.7	%		7.5	%		13.7	%		5.1	%		7.5	%		7.7	%
Combined ratio		103.0	%		109.7	%		80.6	%		67.6	%		98.9	%		86.4	%		94.4	%
Large losses and other items
Loss portfolio transfers(2)	$	8		$	19		$	—		$	—		$	270		$	27		$	274
Large losses (before tax)	$	—		$	11		$	—		$	—		$	—		$	11		$	—
Prior period development	$	(8	)	$	(14	)	$	(5	)	$	(2	)	$	44		$	(29	)	$	43
% Change versus prior year period
Gross premiums written		-90	%		-36	%		-87	%		-61	%		21	%		-69	%		-32	%
Net premiums written		-91	%		-35	%		-89	%		-60	%		21	%		-70	%		-31	%
Net premiums earned		-80	%		-46	%		-38	%		-14	%		62	%		-53	%		-2	%
Other ratios
Net premiums written/gross premiums written		90	%		100	%		93	%		100	%		96	%		99	%		99	%

(1) See page 26 Non-GAAP Financial Measures.

(2) 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. Also, in the fourth quarter of 2004 the Company accrued $5.4 million in realized gains on sale related to the 338(h)(10) tax election entered into with Assured Guaranty as part of the IPO transaction. The transaction resulted in a pre-tax loss of $1.3 million, that reduces net realized gains in the consolidated income statement, and an after-tax loss of $14.6 million, which consists of the following:

Loss on sale of financial and mortgage guaranty businesses	$	(44.3	)
Income tax expense		13.3
After tax reduction in book value		(57.6	)
Realization of accumulated other comprehensive income on companies sold		43.0
After tax loss	$	(14.6	)

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

• The loss on the sale of the financial and mortgage guaranty businesses of $44.3 million represents the difference between the carrying value of the Company’s interest in Assured Guaranty sold and net proceeds of the Offering of $49.7 million and $5.4 million of income relating to the tax election.

• Income tax expense of $13.3 million principally relates to $11.4 million of 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 (338(h)(10)) will be payable to ACE and recognized by ACE when realized by Assured Guaranty. In the fourth quarter the Company received $5.4 million related to this election and recorded tax expense of $1.9 million.

• 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	)		(545	)		(1,107	)		(221	)		(236	)		15
Other (incl. foreign exch. revaluation)		117			110			7			117			110			7			—			—			—
Balance at March 31, 2004		27,697			13,277			14,420			20,556			7,988			12,568			7,141			5,289			1,852
Losses and loss expenses incurred		2,452			727			1,725			2,482			761			1,721			(30	)		(34	)		4
Losses and loss expenses paid		(1,692	)		(593	)		(1,099	)		(1,401	)		(399	)		(1,002	)		(291	)		(194	)		(97	)
Other (incl. foreign exch. revaluation) (3)		(233	)		166			(399	)		(233	)		166			(399	)		—			—			—
Balance at June 30, 2004	$	28,224		$	13,577		$	14,647		$	21,404		$	8,516		$	12,888		$	6,820		$	5,061		$	1,759
Losses and loss expenses incurred		3,310			1,076			2,234			3,281			1,058			2,223			29			18			11
Losses and loss expenses paid		(1,958	)		(1,079	)		(879	)		(1,750	)		(754	)		(996	)		(208	)		(325	)		117
Other (incl. foreign exch. revaluation)		27			48			(21	)		(396	)		(375	)		(21	)		423			423			—
Balance at September 30, 2004	$	29,603		$	13,622		$	15,981		$	22,539		$	8,445		$	14,094		$	7,064		$	5,177		$	1,887
Losses and loss expenses incurred		3,727			1,514			2,213			2,687			1,090			1,597			1,040			424			616
Losses and loss expenses paid		(2,348	)		(987	)		(1,361	)		(2,239	)		(939	)		(1,300	)		(109	)		(48	)		(61	)
Other (incl. foreign exch. revaluation)		531			188			343			244			(141	)		385			287			329			(42	)
Balance at December 31, 2004	$	31,513		$	14,337		$	17,176		$	23,231		$	8,455		$	14,776		$	8,282		$	5,882		$	2,400

(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, 2004*
	Gross			Ceded			Net			Gross 3 year survival ratio	Gross 1 year survival ratio
Balance at December 31, 2003 (1)	$	3,067		$	2,769		$	298		13.0	12.0
Prior period development		—			—			—
Losses and loss expenses paid (2)		(96	)		(101	)		5
Foreign exchange revaluation		21			11			10
Balance at March 31, 2004	$	2,992		$	2,679		$	313
Prior period development		6			4			2
Losses and loss expenses paid (2)		(138	)		(120	)		(18	)
Foreign exchange revaluation		(7	)		2			(9	)
Balance at June 30, 2004	$	2,853		$	2,565		$	288
Prior period development		—			—			—
Losses and loss expenses paid (2)		(66	)		(52	)		(14	)
Foreign exchange revaluation and other		(16	)		(16	)		—
Balance at September 30, 2004	$	2,771		$	2,497		$	274
Prior period development		1,061			635			426
Losses and loss expenses paid (2)		(26	)		(35	)		9
Foreign exchange revaluation and other		105			91			14
Balance at December 31, 2004	$	3,911		$	3,188		$	723
	Environmental & Other Latent Exposures
	Gross			Ceded			Net
Balance at December 31, 2003	$	1,205		$	978		$	227
Prior period development		—			—			—
Losses and loss expenses paid (2)		(47	)		(48	)		1
Foreign exchange revaluation		3			1			2
Balance at March 31, 2004	$	1,161		$	931		$	230
Prior period development		—			—			—
Losses and loss expenses paid (2)		(56	)		(52	)		(4	)
Foreign exchange revaluation		(3	)		(1	)		(2	)
Balance at June 30, 2004	$	1,102		$	878		$	224
Prior period development		—			—			—
Losses and loss expenses paid (2)		(38	)		(39	)		1
Foreign exchange revaluation		—			—			—
Balance at September 30, 2004	$	1,064		$	839		$	225
Prior period development		38			9			29
Losses and loss expenses paid (2)		(47	)		(48	)		1
Foreign exchange revaluation		—			—			—
Balance at December 31, 2004	$	1,055		$	800		$	255

(1) Reclassification of asbestos claims from other lines of business for comparative purposes.

(2) Reclassification of losses paid in quarter 1, 2 and 3 for cash received from NICO.

* The survival ratios are adversely affected by the timing of certain previously agreed upon settlements. These payments were anticipated in our 2004 asbestos study.

Loss Reserves - A&E Page 17

ACE Limited   Reinsurance Recoverable Analysis   (in millions of U.S. dollars)   (Unaudited)

Net Reinsurance Recoverable by Division

	December 31 2004			September 30 2004			June 30 2004			March 31 2004			December 31 2003
Reinsurance recoverable on paid losses & loss expenses
Active operations	$	789		$	884		$	932		$	898		$	835
Brandywine		398			502			478			405			419
Westchester		24			23			28			26			23
Total	$	1,211		$	1,409		$	1,438		$	1,329		$	1,277
Reinsurance recoverable on unpaid losses & loss expenses
Active operations(1)	$	9,465		$	9,049		$	9,397		$	8,954		$	8,494
Brandywine		4,789			4,357			4,013			4,203			4,729
Westchester		717			482			525			539			541
Total	$	14,971		$	13,888		$	13,935		$	13,696		$	13,764
Gross reinsurance recoverable
Active operations	$	10,254		$	9,933		$	10,329		$	9,852		$	9,329
Brandywine(1)		5,187			4,859			4,491			4,608			5,148
Westchester		741			505			553			565			564
Total	$	16,182		$	15,297		$	15,373		$	15,025		$	15,041
Bad debt reserve
Active operations	$	(547	)	$	(625	)	$	(634	)	$	(590	)	$	(562	)(2)
Brandywine		(341	)		(379	)		(336	)		(344	)		(369	)(2)
Westchester		(40	)		(25	)		(29	)		(29	)		(29	)
Total	$	(928	)	$	(1,029	)	$	(999	)	$	(963	)	$	(960	)
Net reinsurance recoverable
Active operations	$	9,707		$	9,308		$	9,695		$	9,262		$	8,767
Brandywine		4,846			4,480			4,155			4,264			4,779
Westchester		701			480			524			536			535
Total	$	15,254		$	14,268		$	14,374		$	14,062		$	14,081

(1) Reclassification of cash received from NICO from Active operations recoverable on paid losses to Brandywine recoverable on unpaid losses in 1st, 2nd and 3rd quarters.

(2) Reclassification of prior year bad debt provision from Brandywine to Active operations for comparative purposes.

Reinsurance Recoverable Page 18

ACE Limited   Reinsurance Recoverable Analysis   (in millions of U.S. dollars)   (Unaudited)

Reinsurance Recoverable for Active Operations

	September 30, 2004
	Recoverable		Bad Debt		% of Gross
Categories
Top 10 reinsurers	$	4,762	$	90	1.9	%
Other reinsurers balances >$20 million		2,312		70	3.0	%
Other reinsurers balances <$20 million		830		92	11.1	%
Mandatory pools and government agencies		661		3	0.5	%
Captives		931		1	0.1	%
Other(1)		437		369	84.4	%
Total	$	9,933	$	625	6.3	%

At September 30, 2004, $7.2 billion of the active operations’ recoverables were from rated reinsurers, of which 83.7% were rated the equivalent of A- or better by internationally recognized rating agencies. The Company held collateral of $2.6 billion, of which $1.6 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)
American International Group	AGRI General Ins Co	Hartford Insurance Group
Berkshire Hathaway Insurance Group	AIOI Insurance	Independence Blue Cross (Amerihealth)
CIGNA	Allied World Assurance	Liberty Mutual Insurance Companies
Electric Insurance Company	Arch Capital	Overseas Partners Ltd
GE Insurance Solutions	Aspen Insurance Holdings Ltd	Partner Re
HDI Haftpflichtverband Der Deutschen Industrie VAG	AXA	Platinum Underwriters
Lloyd’s of London	Chubb Insurance Group	Renaissance Re Holdings Ltd
Munich Re	CNA Insurance Companies	Royal & Sun Alliance Insurance Group
Swiss Re Group	DaimlerChrysler Insurance Company	SCOR Group
XL Capital Group	Endurance Specialty	Sompo Japan
	Equitas	St. Paul Travelers Companies
	Everest Re Group	Toa Reinsurance Company
	Fairfax Financial	White Mountains Insurance Group
	Federal Crop Insurance Corp	WR Berkley Corp
	FM Global Group	Zurich Financial Services Group
	Gerling Group

(1) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimate of bad debt reserve associated with Other considers 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)

Consolidated Reinsurance Recoverable

	September 30, 2004
	Recoverable		Bad Debt		% of Gross
Categories
Top 10 reinsurers	$	7,871	$	106	1.3	%
Other reinsurers balances > $20 million		3,158		142	4.5	%
Other reinsurers balances < $20 million		1,246		113	9.1	%
Mandatory pools and government agencies		689		3	0.4	%
Structured settlements		424		2	0.5	%
Captives		945		1	0.1	%
Other		964		662	68.7	%
Total	$	15,297	$	1,029	6.7	%

At September 30, 2004, $11.0 billion of consolidated recoverables were from rated reinsurers, of which 87.7% were rated the equivalent of A- or better by internationally recognized rating agencies.

Top 10 Reinsurers (net of collateral) (2)	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
American International Group	AGRI General Ins Co	Gerling Group
Berkshire Hathaway Insurance Group	AIOI Insurance	Hartford Insurance Group
CIGNA	Allianz Group	Independence Blue Cross (Amerihealth)
Equitas	Allied World Assurance	IRB - Brasil Resseguros S.A.
GE Insurance Solutions	Arch Capital	Liberty Mutual Insurance Companies
HDI Haftpflichtverband Der Deutschen Industrie VAG	Aspen Insurance Holdings Ltd	Millea Holdings
Lloyd’s of London	AVIVA	Overseas Partners Ltd
Munich Re	AXA	Partner Re
Swiss Re Group	Chubb Insurance Group	Platinum Underwriters
XL Capital Group	CNA Insurance Companies	Renaissance Re Holdings Ltd
	Constellation Rein Co	Royal & Sun Alliance Insurance Group
	Converium Group	SCOR Group
	DaimlerChrysler Insurance Company	Sompo Japan
	Dominion Ins. Co. Ltd	St. Paul Travelers Companies
	Electric Insurance Company	Toa Reinsurance Company
	Endurance Specialty	Trenwick Group
	Everest Re Group	White Mountains Insurance Group
	Fairfax Financial	WR Berkley Corp
	Federal Crop Insurance Corp	Zurich Financial Services Group
	FM Global Group

⁽¹⁾ Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimate of bad debt reserve associated with Other considers 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)

Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

	General Collections (1)			Other (2)			Total
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	$	713		$	616		$	1,329
Bad debt reserve at 3/31/04		44			378			422
% of gross		6.2	%		61.4	%		31.8	%
Net balance at March 31, 2004	$	669		$	238		$	907
Gross balance at June 30, 2004	$	728		$	710		$	1,438
Bad debt reserve at 6/30/04		36			405			441
% of gross		4.9	%		57.0	%		30.7	%
Net balance at June 30, 2004	$	692		$	305		$	997
Gross balance at September 30, 2004	$	732		$	677		$	1,409
Bad debt reserve at 9/30/04		46			382			428
% of gross		6.3	%		56.4	%		30.4	%
Net balance at September 30, 2004	$	686		$	295		$	981
Gross balance at December 31, 2004	$	567		$	644		$	1,211
Bad debt reserve at 12/31/04		30			279			309
% of gross		5.3	%		43.3	%		25.5	%
Net balance at December 31, 2004	$	537		$	365		$	902

(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 for Brandywine Group and active operations. 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.

Note: Quarter 1, 2 and 3 balances have been restated for NICO cash received now classified as recoverable on unpaid losses.

Reinsurance Recoverable 4 Page 21

ACE Limited   Investment Portfolio   (in millions of U.S. dollars)   (Unaudited)

	December 31 2004		September 30 2004		June 30 2004		March 31 2004		December 31 2003
Market Value
Fixed maturities	$	21,739	$	20,791	$	18,348	$	19,920	$	18,645
Securities on loan		1,038		1,044		1,515		1,183		684
Short-term investments		3,199		3,360		4,040		3,290		2,928
Cash		534		626		663		614		562
Total	$	26,510	$	25,821	$	24,566	$	25,007	$	22,819
Asset Allocation by Market Value
Treasury	$	1,536	$	1,491	$	1,773	$	1,491	$	1,715
Agency		1,527		1,506		1,217		1,723		1,512
Corporate		7,566		7,418		6,809		7,201		6,304
Mortgage-backed securities		5,010		4,940		4,405		4,536		3,894
Asset-backed securities		1,217		958		832		800		737
Municipal		566		591		623		1,498		1,445
Non-US		5,376		4,955		4,203		3,854		3,723
Cash & cash equivalent		3,712		3,962		4,704		3,904		3,489
Total		26,510	$	25,821	$	24,566	$	25,007	$	22,819
Credit Quality by Market Value
AAA	$	13,800	$	13,250	$	12,780	$	13,211	$	12,315
AA		4,247		4,146		4,159		4,200		3,389
A		4,336		4,378		3,901		3,847		3,534
BBB		2,269		2,248		2,048		2,002		1,783
BB		774		752		664		653		709
B		1,041		994		973		1,045		1,029
Other		43		53		41		49		60
Total		26,510	$	25,821	$	24,566	$	25,007	$	22,819
Cost/Amortized Cost
Fixed maturities	$	21,296	$	20,325	$	18,226	$	19,129	$	18,006
Securities on loan		997		1,000		1,488		1,113		650
Short term investments		3,199		3,360		4,040		3,290		2,928
Cash		534		626		663		614		562
Subtotal		26,026		25,311		24,417		24,146		22,146
Equity securities		1,039		849		846		414		401
Other investments		1,205		1,159		1,143		595		602
Total		28,270	$	27,319	$	26,406	$	25,155	$	23,149
Avg. duration of fixed maturities, adj. for int. rate swaps		3.4 years		3.4 years		3.6 years		3.4 years		3.4 years
Avg. market yield of fixed maturities		4.1%		4.0%		4.6%		3.6%		4.0%
Avg. credit quality		AA		AA		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)
December 31, 2004			September 30, 2004			June 30, 2004			(Restated) March 31, 2004
General Electric Co	$	254	Citigroup Inc	$	225	HSBC Holdings Plc	$	187	HSBC Holdings Plc	$	200
Citigroup Inc		234	HSBC Holdings Plc		219	Citigroup Inc		174	General Electric		195
HSBC Holdings Plc		211	General Electric		219	General Electric		167	Citigroup Inc		166
JP Morgan Chase & Co		147	JP Morgan Chase & Co.		148	General Motors		130	Goldman Sachs Group Inc		123
General Motors Corp		135	General Motors		131	Goldman Sachs Group Inc		124	Morgan Stanley		117
Bank of America Corp		131	Goldman Sachs Group Inc		130	Bank of America Corp		121	General Motors		114
Wells Fargo & Co		128	Morgan Stanley		124	Morgan Stanley		114	Bank of America Corp		106
Morgan Stanley		123	Bank of America Corp		121	JP Morgan Chase & Co.		102	Ford Motor Co		89
Verizon Communications Inc		109	Wells Fargo & Co.		108	Ford Motor Co		100	Verizon Communications		83
American International Group		105	Ford Motor Co		104	Verizon Communications		91	Vodafone Group PLC		82

Investments 2 Page 23

ACE Limited   Realized and Unrealized Gains (Losses)   (in millions of U.S. dollars)   (Unaudited)

	Three months ended December 31, 2004									Year ended December 31, 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	$	45		$	(26	)	$	19		$	112		$	(195	)	$	(83	)
Interest rate swaps		(1	)		—			(1	)		8			—			8
Equity securities		9			80			89			84			54			138
Equity and fixed income derivatives		11			—			11			25			—			25
Foreign exchange gains (losses)		3			—			3			1			—			1
Other		—			26			26			(21	)		52			31
Total inv. portfolio gains (losses)		67			80			147			209			(89	)		120
Other FAS 133 adjustments		61			—			61			(14	)		—			(14	)
Total gains (losses)		128			80			208			195			(89	)		106
Income tax expense (benefit)		12			7			19			44			(39	)		5
Net gains (losses)	$	116		$	73		$	189		$	151		$	(50	)	$	101

(1) The quarter includes impairments of $3M for fixed maturities, $4M for equities and $2M for other investments. Year to date includes impairments for $18M for fixed maturities, $9M for equities and $12M for other investments.

	Three months ended December 31, 2003									Year ended December 31, 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	$	23		$	(68	)	$	(45	)	$	100		$	22	$	122
Interest rate swaps		3			—			3			(6	)		—		(6	)
Equity securities		12			49			61			(41	)		189		148
Equity and fixed income derivatives		12			—			12			40			—		40
Foreign exchange gains (losses)		3			—			3			21			—		21
Other		(12	)		3			(9	)		(25	)		12		(13	)
Total inv. portfolio gains (losses)		41			(16	)		25			89			223		312
Other FAS 133 adjustments		87			—			87			163			—		163
Total gains (losses)		128			(16	)		112			252			223		475
Income tax expense (benefit)		12			(13	)		(1	)		32			15		47
Net gains (losses)	$	116		$	(3	)	$	113		$	220		$	208	$	428

(2) The quarter includes impairments of $4M for fixed maturities and $2M for equities and $9M for other. Year to date includes impairments of $29M for fixed maturities and $63M for equities and $29M for other.

Investment Gains (Losses) Page 24

ACE Limited   Capital Structure   (in millions of U.S. dollars)   (Unaudited)

	December 31 2004			September 30 2004			June 30 2004			March 31 2004			December 31 2003			December 31 2002
Total short-term debt	$	146		$	146		$	546		$	546		$	546		$	146
Total long-term debt	$	1,849		$	1,849			1,849			1,349			1,349			1,749
Total debt		1,995			1,995			2,395			1,895			1,895			1,895
Total trust preferreds		412			412			487			487			475			475
Mezzanine equity (1)		—			—			—			—			—			311
Perpetual preferred (2)		557			557			557			557			557			—
Ordinary shareholders’ equity		9,279			8,922			8,663			8,840			8,278			6,389
Total shareholders’ equity	$	9,836		$	9,479		$	9,220		$	9,397		$	8,835		$	6,389
Total capitalization	$	12,243		$	11,886		$	12,102		$	11,779		$	11,205		$	9,070
Tangible shareholders’ equity (3)	$	7,224		$	6,867		$	6,606		$	6,698		$	6,124		$	3,672
Leverage ratios
Debt/ total capitalization		16.3	%		16.8	%		19.8	%		16.1	%		16.9	%		20.9	%
Debt plus trust preferreds/ total capitalization		19.7	%		20.3	%		23.8	%		20.2	%		21.2	%		26.1	%
Debt/ tangible equity		27.6	%		29.1	%		36.3	%		28.3	%		30.9	%		51.6	%
Debt plus trust preferreds and mezzanine equity/ tangible equity		33.3	%		35.1	%		43.6	%		35.6	%		38.7	%		73.0	%
Debt plus total preferred stock/ total capitalization		24.2	%		24.9	%		28.4	%		25.0	%		26.1	%		26.1	%

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

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

(3) 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.

In presenting our segment operating results we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting losses and loss expenses, life and annuity benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense and net realized gains (losses).

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).

	4Q-04		3Q-04			2Q-04		1Q-04		4Q-03		Full Year 2004		Full Year 2003
Net income (loss), as reported	$	282	$	(3	)	$	413	$	447	$	444	$	1,139	$	1,417
Net realized gains (losses)		128		(33	)		43		57		128		195		252
Tax expense on net realized gains (losses)		12		1			10		21		12		44		32
Income excluding net realized gains (losses)	$	166	$	31		$	380	$	411	$	328	$	988	$	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

	December 31 2004			September 30 2004			June 30 2004			March 31 2004			December 31 2003
Shareholders’ equity	$	9,836		$	9,479		$	9,220		$	9,397		$	8,835
Net proceeds from assumed conversions of options		312			315			331			622			390
Proceeds from issuance of preferred shares		(557	)		(557	)		(557	)		(557	)		(557	)
Numerator for diluted book value per share calculation		9,591			9,237			8,994			9,462			8,668
Less: goodwill		2,612			2,612			2,614			2,699			2,711
Numerator for diluted tangible book value per share	$	6,979		$	6,625		$	6,380		$	6,763		$	5,957
Ordinary shares outstanding - end of period		284,478,525			284,112,866			283,604,445			282,714,909			279,897,193
Shares issued from assumed conversions of options		10,830,932			11,061,417			11,670,422			18,951,480			14,305,419
Denominator for diluted and diluted tangible book value		295,309,457			295,174,283			295,274,867			301,666,389			294,202,612
Book value per ordinary share	$	32.62		$	31.40		$	30.55		$	31.27		$	29.57
Diluted book value per ordinary share	$	32.48		$	31.29		$	30.46		$	31.36		$	29.46
Diluted tangible book value per ordinary share	$	23.63		$	22.44		$	21.61		$	22.41		$	20.25

Reconciliation Book Value Page 27

ACE Limited   Comprehensive Income   (in millions of U.S. dollars)   (Unaudited)

	4Q-04			3Q-04			2Q-04			1Q-04			4Q-03			Full Year 2004			Full Year 2003
Consolidated Statement of Comprehensive Income
Net income (loss)	$	282		$	(3	)	$	413		$	447		$	444		$	1,139		$	1,417
Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments		176			393			(622	)		236			3			183			304
Reclassification adjustment for net realized gains (losses) included in net income		(96	)		(32	)		(83	)		(61	)		(19	)		(272	)		(81	)
Cumulative translation adjustment		128			21			(24	)		2			62			127			144
Minimum pension liability adjustment		(45	)		3			1			(2	)		8			(43	)		(54	)
Income tax (expense) benefit related to other comprehensive income items		(35	)		(83	)		180			(41	)		(2	)		21			(33	)
Other comprehensive income (loss)		128			302			(548	)		134			52			16			280
Comprehensive income (loss)	$	410		$	299		$	(135	)	$	581		$	496		$	1,155		$	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