ACE Limited (NYSE: ACE) today reported a net loss excluding net realized gains (losses) of $390.1 million for the quarter ended September 30, 2001, or a loss, after deducting preferred dividends, of $1.72 per share, compared with income excluding net realized gains (losses) of $150.6 million for the quarter ended September 30, 2000, or earnings per share of $0.62. The net loss for the quarter ended September 30, 2001 was $442.6 million compared with net income of $140.8 million in 2000 and the loss per share, after deducting preferred dividends, was $1.95 for the current quarter compared with earnings per share of $0.58 for the same quarter last year. Earnings (loss) per share calculations above are based on the weighted average number of shares calculated in accordance with FAS 128 on a diluted basis. Under FAS 128, the incremental shares from assumed conversions are not included in computing diluted loss per share amounts. The fully diluted book value per share of the Company at September 30, 2001 was $22.10. Certain amounts noted above have been restated from the third quarter earnings highlights issued on October 25, 2001.
The Company's third quarter results were reduced by $558.8 million after tax ($636.9 million on a pre-tax basis) as a result of the September 11, 2001 tragedy. Excluding the impact of this event, the Company's income excluding net realized gains (losses) for the quarter ended September 30, 2001 would have been $168.7 million and earnings per share excluding net realized gains (losses), after deducting preferred dividends, would have been $0.68 per share on a diluted basis.
Brian Duperreault, chairman and chief executive officer of ACE Limited, commented: "The tragedy of September 11 has materially altered the business of insurance. It has created uncertainty and significantly increased insurance demand. With our global platform and increased capital, ACE is well positioned to meet this demand."
Gross premiums written during the quarter increased by 25 percent to $2.5 billion, compared with $2 billion for the comparable quarter last year.
Net premiums written during the quarter increased by 9 percent to $1.3 billion compared with $1.2 billion for the same quarter last year. Net premiums earned during the quarter increased to $1.4 billion from $1.2 billion for the same quarter last year.
For the first nine months of fiscal 2001, gross premiums written increased by 26 percent to $7.5 billion compared with the same period last year and net premiums written increased by 17 percent to $4.5 billion compared with the first nine months of fiscal 2000. Net premiums earned for the nine months ended September 30, 2001 were $4.2 billion compared with $3.4 billion for the same period last year.
Net investment income, which excludes net realized gains (losses) on investments, was $192.9 million for the fiscal 2001 third quarter, compared with $197.6 million for the same quarter last year. For the first nine months of fiscal 2001, net investment income, was $593.6 million compared with $561.5 million for the same period last year. During the 2001 third quarter, ACE had net realized losses, net of tax, of $52.5 million, compared with net realized losses of $9.8 million for the same quarter last year. For the nine months ended September 30, 2001, net realized losses, net of tax, were $54.7 million, compared with net realized gains of $11.5 million for the nine months ended September 30, 2000.
On October 25, 2001, ACE announced that it agreed to sell in a public offering 28.6 million ordinary shares at a price per share of $35.00, resulting in net proceeds of $980 million. ACE also granted the underwriters of the offering an option to purchase an additional 4.29 million ordinary shares at the same price to cover over-allotments. This option was exercised on Monday, October 29, 2001 and will result in additional proceeds of $147 million.
The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients. The ACE Group conducts its business on a global basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: www.acelimited.com.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
Any forward-looking statements made in this press release reflect the Company's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. Among other things, the impact of the recent tragedy on the Company's financial results will depend on the number of insureds and reinsureds affected by the disaster, the amount and timing of losses actually incurred and reported by insureds and reinsureds and governmental responses to the tragedy. Availability of capacity to clients will depend on opportunities presented and the application of underwriting guidelines. Also, competition in the industry, levels of new and renewal business achieved, market acceptance, the frequency of unpredictable catastrophic events, actual loss experience and economic, market, regulatory, insurance and reinsurance business conditions and other factors identified in the Company's filings with the Securities and Exchange Commission could affect the forward-looking statements contained in this press release. 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 Corporate Announcements - Third Quarter, 2001
September 28, 2001 - Sovereign Announces Its Election to the Berne Union
Sovereign Risk Insurance Ltd. announced its election to the International Union of Credit and Investment Insurers (the Berne Union). Sovereign's application for membership was approved at the Berne Union's annual meeting in Biarritz, France on September 19. The Berne Union has a total of fifty-one members from forty-two countries and locations. Sovereign is one of only three private sector political risk insurers to become eligible for, and be approved as, a member of the Berne Union.
September 25, 2001 - ACE USA Diversified Products Enters Strategic Alliance with RelMark Program Managers
The Diversified Products division of ACE USA announced it has selected RelMark Program Managers to manage a program for fire sprinkler contractors. ACE USA Diversified Products writes customized commercial lines programs through program agents who are experts in particular niche markets. RelMark Program Managers of Exton, PA. will have authority for underwriting, marketing and administration on behalf of ACE USA Diversified Products.
September 17, 2001 - ACE Establishes Fund for Victims' Families
ACE Limited announced that it has established a fund to aid the families of the victims of the September 11 attacks in the United States. The fund will be administered by charitable trusts operated by ACE Foundations in Bermuda and Philadelphia and will provide one million dollars a year for a period of five years to families affected by the disasters in New York, Washington and Pennsylvania.
September 7, 2001 - Sovereign Risk Announces Completion of Samurai/US Dollar Capital Markets Transaction in Brazil
Sovereign Risk Insurance Ltd. has announced the issuance of two political risk insurance policies in connection with a capital markets transaction covering a two-tranche Yen and US Dollar-denominated notes issue by Banco Itau. The policies were issued in support of an aggregate amount of US$350 million of notes, US$250 million equivalent of which was denominated in Japanese yen. The issue represents two "firsts" for Brazil -- it is both the first wrapped A-rated deal and the first subordinated bond offering in Brazil.
August 23, 2001 - INAMAR Introduces ORCA, Online Real-Time Communications Access
INAMAR, the marine insurance products and services arm of the ACE Group of Companies, announced the initial release of a new system - ORCA, Online Real-Time Communications Access. This Internet-based system will be available to appointed recreational marine specialist insurance agents and will provide automated boat and insurance quoting on a 24/7 basis using innovative underwriting tools.
August 9, 2001 - ACE Opens Global Headquarters in Bermuda
ACE Limited, the holding company for the ACE Group of Companies, opened its new global headquarters in Hamilton, Bermuda. An official opening ceremony attended by the Premier of Bermuda, the Honorable Jennifer Smith DHumL, JP, MP, Members of Parliament, Chairman & Chief Executive Officer of ACE, Brian Duperreault, members of ACE's Board of Directors as well as other invited dignitaries and guests was held at 5.00 p.m., Thursday, August 9, 2001 at the new global headquarters on Woodbourne Avenue.
July 31, 2001 - Sovereign Announces Financial Results for Fourth Year of Operations
Sovereign Risk Insurance Ltd. announced financial results for its fourth year of operations. For the fiscal year July 1, 2000 - June 30, 2001, Sovereign underwrote 52 new political risk insurance policies. Sovereign's gross premium revenue was $52.5 million, with net revenue of $40.7 million. This compares with $31.3 million in gross premium revenue and $23.5 million in net revenue in FY 1999/2000. Sovereign's combined ratio for the year was 40% and expense ratio was 11%.