ACE Limited (NYSE: ACE) today reported net operating income of $511 million for the full year ended December 31, 2002 compared with a loss of $69 million last year, (including a loss of $559 million after tax related to the September 11, 2001 tragedy). Net operating earnings per share for 2002 were $1.80 compared with a net operating loss per share of $0.40 per share for 2001. Net income including realized losses for the year was $77 million compared with a net loss of $146 million for fiscal 2001. Earnings per share were $0.19 for the current year compared with a loss per share of $0.74 last year. The fully diluted book value per share of the Company at December 31, 2002 was $24.16 compared with $23.59 at year-end 2001.
For the quarter ended December 31, 2002, ACE reported a net operating loss of $99 million (after a charge of $354 million related to prior year asbestos and environmental reserves) compared with net operating income of $42 million for the same quarter in 2001. The operating loss per common share was $0.41 compared with net operating earnings of $0.14 per share for the same quarter last year. The net loss for the fourth quarter, including realized losses, was $168 million compared with net income of $46 million for the same quarter in 2001. On a per share basis, the loss was $0.67 per share for the current quarter compared with earnings per share of $0.15 for the Company a year ago. 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.
Brian Duperreault, Chairman and Chief Executive Officer of ACE Limited, commented: "The charge for prior years’ asbestos exposure overshadowed what was actually a very good year for ACE. Our core property and casualty business grew rapidly, generating significant cash flow and very satisfactory underwriting profitability. As planned, Life Reinsurance declined significantly and Financial Services, which we have always said is erratic, declined moderately."
Net premiums written increased 7 percent over the prior quarter a year ago. Property and casualty net premiums written (exclusive of Life Reinsurance and Financial Services) increased by 54 percent compared with the fourth quarter of 2001. Life Reinsurance and the Financial Services segments declined 86 percent and 43 percent, respectively.
Net premiums written for the year ended December 31, 2002, increased by 27 percent compared with 2001. Property and casualty net premiums written (excluding the Financial Services segment and the Life Reinsurance division) increased 43 percent over prior year levels.
Net investment income rose to $202 million for the 2002 fourth quarter compared with $192 million in the prior year. For the full year, net investment income, excluding net realized losses, was $802 million compared with $785 million on the same basis for fiscal 2001. During the 2002 fourth quarter, ACE had net realized losses, net of tax, of $69 million, compared with net realized gains of $4 million for the same quarter in 2001. For the year ended December 31, 2002, net realized losses, after taxes, were $417 million compared with net realized losses of $50 million for fiscal 2001.
Please refer to the ACE Financial Supplement, which is posted on the Company’s website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverables, asbestos reserves, financial guaranty, and invested assets. ACE’s website reference (url) is http://media.corporate-ir.net/media_files/NYS/ace/reports/fin_supp_December_31_2002.xls .
ACE Limited (NYSE: ACE) will host a live webcast of its fourth quarter, year-end earnings conference call on Thursday, February 6, 2003, beginning at 8:30 a.m. EST. The public may access both the webcast, available on a listen-only basis, and the financial supplement at www.acelimited.com . Please refer to our website under "Investor Information, Calendar of Events", one half hour before, for further webcast details. Individuals who access the webcast will be asked to identify themselves and their affiliation. A replay of the webcast will be available following the live webcast on Thursday, February 6, 2003 until Thursday, February 20, 2003.
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. For example, the Company’s forward-looking statements concerning growth and profitability could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative developments, litigation tactics, the amount and timing of reinsurance recoverables, actual market developments, rating agency action, possible terrorism or the outbreak of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
