EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Investor Contact: Helen M. Wilson
(441) 299-9283
Media Contact: Wendy Davis Johnson
(441) 299-9347
ACE INCREASES PRESENCE AT LLOYD'S
ACQUISITION OF TARQUIN LIMITED WILL STRENGTHEN
AVIATION, MARINE AND SPECIALTY P & C LINES
HAMILTON, Bermuda, June 16, 1998 - ACE Limited (NYSE: ACL) and Tarquin
Limited announced today that they have executed a definitive agreement for
the acquisition of Tarquin by ACE. Tarquin is a UK-based holding company
which owns Lloyd's managing agency Charman Underwriting Agencies Ltd.
("CUA"), and Tarquin Underwriting Limited ("TUL"), its corporate capital
provider. ACE is the largest managing agency group in the Lloyd's market in
terms of capacity under a single management. Upon completion of the
acquisition, ACE will manage approximately 9.3 percent of the total
underwriting capacity at Lloyd's.
Under the agreement, ACE expects to issue approximately 14.3 million
ordinary shares, subject to adjustment, to the shareholders of Tarquin and
it is anticipated that the transaction will be accounted for on a "pooling
of interests" basis. Closing is subject to regulatory approval and other
customary closing conditions and should be completed by the end of July
1998. The combined entities are expected to incur approximately $60 million
of non-recurring and transaction-related expenses.
The Charman syndicates 488 and 2488 are leading international underwriters
of short-tail marine, aviation, political risk and specialty
property-casualty insurance and reinsurance. The acquisition will
complement ACE's existing Lloyd's businesses and enhance ACE's already
leading position in both aviation and marine underwriting.
John Charman, Tarquin's managing director, will become chief executive
officer of ACE UK. Leslie Goodman, currently chief executive officer of ACE
UK, will assume the role of chief executive of a strategic development unit
within the ACE group of companies.
William Loschert, chairman of ACE UK, commented: "Tarquin's substantial
international presence, especially in marine, specialty property-casualty
insurance and reinsurance, complements and extends our current strengths
while expanding our access to major global corporate clients. The addition
of these new syndicates, together with our previously announced
restructuring, positions us to take maximum advantage of the many
opportunities in the Lloyd's and international specialty markets."
John Charman, managing director of Tarquin, added: "We relish the
opportunity to build on our past successes as separate companies and are
committed to developing an even more formidable business in Lloyd's . Our
valued international clients will benefit from the financial strength and
flexibility of ACE as well as the broader product lines and global
servicing that will become available to them. We are delighted that we will
become an integral part of such a talented, progressive and successful
insurance and reinsurance group."
Brian Duperreault, chairman, president and chief executive officer of ACE,
said: "This acquisition affords ACE the opportunity to acquire a
highly-respected, successful, innovative team including some of Lloyd's
most talented management and underwriters. This will make ACE one of
Lloyd's largest providers of corporate capital and underscores ACE's
commitment to developing its business in the UK and international markets.
We look forward to working with John Charman and the rest of the Tarquin
team as we continue to build ACE's global business."
The ACE group of companies provides insurance and reinsurance for a diverse
group of international clients. Operating subsidiaries are based in
Bermuda, the United States, the United Kingdom (Lloyd's) and the Republic
of Ireland. At March 31, 1998, ACE Limited had approximately $2.8 billion
in shareholders' equity and approximately $7.0 billion in assets. In April
1998, ACE sold 16.5 million ordinary shares for total proceeds of
approximately $600 million which increased ACE's shareholders' equity to
approximately $3.4 billion.
Attached as Appendix I is U.S. GAAP summary financial information of
Tarquin Limited for the year ended December 31, 1997.
(tables to follow)
Appendix I
Tarquin Limited
Summary Financial Information
(U.S. GAAP basis)
(in thousands of U.S.$)
Consolidated Balance Sheet
As at December 31, 1997
Assets
Investments and cash . . . . . . . . . . . . . . . . . . . . . . $328,843
Insurance balances receivable. . . . . . . . . . . . . . . . . . 117,427
Reinsurance recoverables . . . . . . . . . . . . . . . . . . . . 177,377
Other assets. . . . . . .. . . . . . . . . . . . . . . . . . . . 109,934
--------
$733,581
--------
Liabilities
Losses and loss expenses . . . . . . . . . . . . . . . . . . . . $305,419
Unearned premiums. . . . . . . . . . . . . . . . . . . . . . . . 87,526
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . 139,992
--------
$532,937
--------
Shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . $200,644
--------
$733,581
========
Consolidated Statement of Income
For the year ended December 31, 1997
Revenues
Gross premiums written . . . . . . . . . . . . . . . . . . . . . $290,862
--------
Net premiums written . . . . . . . . . . . . . . . . . . . . . . $215,906
--------
Net premiums earned . . . . . . . . . . . . . . . . . . . . . . $223,193
Net investment income . . . . . . . . . . . . . . . . . . . . . 19,835
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . 13,398
--------
$256,426
Expenses
Losses and loss expenses . . . . . . . . . . . . . . . . . . . . $113,811
Acquisition costs. . . . . . . . . . . . . . . . . . . . . . . . 48,934
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . 18,209
--------
$180,954
Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,472
Income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,895
--------
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,577
========
# # #