Third Quarter Earnings Reports: ACE Limited; Arch Capital

ACE Limited:
Q3 2011 Q3 2010
Gross premiums written– $5.9 bn $5.0 bn
9 months – 2011 —- 2010
$15.967 bn – $14.946 bn

Net premiums written – $4.343 bn $3.295 bn
9 months – 2011 2010
$11.742 bn $9.932 bn
Net Income (loss) —– ($31 mn) $675 mn
9 months 2011 2010
$835 mn $2.107 bn
Operating income $759 mn $688 mn
9 months 2011 2010
$1.713 bn $1.955 bn
Q3 2011 Q3 2010
Net realized gains (losses) ($760 mn ) ($50mn )
9 months 2011 2010
($878 mn) $127 mn
Net investment income $564 mn $516 mn
9 months 2011 2010
$1.677 bn $1.538 bn

Q3 Combined ratio: 90.3 percent (88.4 percent in Q3 2010)
9 months combined ratio: 95.2 percent (90.2 percent in 2010)

Chairman and CEO Evan G. Greenberg commented: “ACE had outstanding operating results in what were very difficult financial market conditions. All principal businesses performed well and contributed positively to the operating results in the quarter. Revenue increased 31 percent and after-tax operating income was $759 million, up 10 percent and a record for our company. Our performance in the quarter was led by excellent current accident year underwriting results that benefited from both underwriting discipline and risk management.

“As a result of an historic drop in interest rates – the lowest level in over 100 years – and an equity market correction driven by Federal Reserve action and a flight to safety by investors, we incurred a substantial charge to book value from a negative mark to market in our variable annuity reinsurance business and our corporate fixed income investment portfolio. In our judgment, the majority of this mark will be transient and will reverse over time making a positive contribution to book value in future quarters.”

The full report, as well as additional and supplemental information and instructions for accessing the earnings conference call may be obtained on the company’s website at: www.acegroup.com

Arch Capital:
Q3 2011 Q3 2010
Gross premiums written– $860.29 Mn $831.8 mn
9 months – 2011 — 2010
$2.74 bn – $2.6 bn

Net premiums written – $691.4 mn $636 mn
9 months – 2011 2010
$2.16 bn- $2.02 bn
Net Income ——– $162.5 mn $141.5 mn
9 months 2011 2010
$273.7 mn $589 mn
Operating income $107.5 mn $130.6 mn
9 months 2011 2010
$176.7 mn $361.5 mn
Q3 2011 Q3 2010
Net pretax investment income $28.5 mn $68.6 mn
9 months 2011 2010
$94.8 mn $175.2 mn

Q3 Combined ratio: 94.3 percent (90.4 percent in Q3 2010)
9 months combined ratio: 101.1 percent (92.4 percent in 2010)

Arch’s earnings report also noted that it had net foreign exchange gains in Q3 2011 of just under $60 million, compared to a loss of more than $65 million in Q3 2010.

The full report, as well as additional and supplemental information and instructions for accessing the earnings conference call may be obtained on the company’s web site – website at http://www.archcapgroup.bm.

Sources, ACE Limited, Arch Capital

Topics Profit Loss