-
Global P&C net premiums written, which exclude Agriculture, up 5.8%
for the quarter and 6.9% for the year in constant dollars
-
P&C underwriting income up 7.1% for the quarter and 7.2% for the year,
driven by strong current accident year underwriting income excluding
catastrophe losses, up 23.3% for the quarter and 13% for the year;
current accident year combined ratio excluding catastrophe losses of
89.5% for the quarter and 89.3% for the year
-
Record net investment income of $577 million for the quarter; for the
year, net investment income of $2.3 billion, up 5.1%
-
Full-year operating cash flow of $4.5 billion
-
In the quarter, unfavorable foreign currency movement negatively
impacted book value by $596 million and reduced Global P&C net
premiums written growth by 2.8 percentage points
ZURICH--(BUSINESS WIRE)--
ACE Limited (NYSE: ACE) today reported net income for the quarter ended
December 31, 2014, of $1.66 per share, compared with $2.90 per share for
the same quarter last year.(1) Operating income was $2.47 per
share, compared with $2.39 per share for the same quarter last year.
Book value per share declined 0.4% from September 30, 2014, to $90.02,
primarily due to unfavorable foreign currency movement. Excluding
foreign currency movement, book value per share increased 1.6%. Tangible
book value per share decreased 1.9% to $72.61, primarily due to
unfavorable foreign currency movement and the impact of goodwill and
intangibles relating to the acquisition closed during the quarter.
Tangible book value per share increased 2.4% excluding the impact of
foreign currency movement and the acquisition closed during the quarter.
Operating return on equity for the quarter was 11.8%. The property and
casualty (P&C) combined ratio for the quarter was 88.5%.
|
|
|
|
Fourth Quarter Summary
|
|
(in millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Per Share - Diluted)
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, net of tax
|
|
$
|
827
|
|
|
$
|
824
|
|
0.4
|
%
|
|
$
|
2.47
|
|
|
$
|
2.39
|
|
3.3
|
%
|
|
Adjusted net realized gains (losses), net of tax
|
|
(272
|
)
|
|
174
|
|
NM
|
|
(0.81
|
)
|
|
0.51
|
|
NM
|
|
Net income
|
|
$
|
555
|
|
|
$
|
998
|
|
(44.4
|
)%
|
|
$
|
1.66
|
|
|
$
|
2.90
|
|
(42.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2014, net income was $8.42 per share,
compared with $10.92 per share for 2013. Operating income was $9.79 per
share, compared with $9.35 per share for 2013, an increase of 4.7%. Book
value and tangible book value per share increased 6.1% and 5.3%,
respectively, from December 31, 2013. Excluding foreign currency
movement, book value per share increased 8.8%. Tangible book value per
share increased 11.3% excluding the impact of foreign currency movement
and acquisitions closed during the year. Operating return on equity for
the year was 12%. The P&C combined ratio for the year ended December 31,
2014, was 87.7%.
|
|
|
|
Full Year Summary
|
|
(in millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Per Share - Diluted)
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, net of tax
|
|
$
|
3,320
|
|
|
$
|
3,217
|
|
3.2
|
%
|
|
$
|
9.79
|
|
|
$
|
9.35
|
|
4.7
|
%
|
|
Adjusted net realized gains (losses), net of tax
|
|
(467
|
)
|
|
541
|
|
NM
|
|
(1.37
|
)
|
|
1.57
|
|
NM
|
|
Net income
|
|
$
|
2,853
|
|
|
$
|
3,758
|
|
(24.1
|
)%
|
|
$
|
8.42
|
|
|
$
|
10.92
|
|
(22.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited,
commented: “ACE had excellent operating results for the fourth quarter
which contributed to another record year. Quarterly and annual results
were driven by growth in both underwriting and investment income. Record
full-year after-tax operating income of $3.3 billion was up 4.7% per
share with a strong operating ROE of 12%.
“Our P&C combined ratio was 88.5% for the quarter and 87.7% for the year
with fourth quarter and full-year underwriting income both up over 7%.
Our excellent underwriting results were driven by a particularly strong
current accident year performance, which reflects the fundamental
strength of our current year business. Current accident year
underwriting income excluding catastrophes was up 23% for the quarter
and 13% for the year.
“Net investment income was a record $577 million in the quarter and $2.3
billion for the year, up more than 5%. We benefited from strong
operating cash flow and achieved an exceptional result given the
historically low interest rate environment.
“For the quarter and year, global P&C net premiums written grew about 6%
and 7%, respectively, on a constant-dollar basis with the strong dollar
negatively impacting growth by about 2.8 percentage points in the
quarter and 1.2 percentage points for the year. Per share book value
declined modestly in the quarter and grew 6.1% for the year with foreign
exchange negatively impacting book value by $596 million in the quarter
and $747 million for the year. Excluding foreign currency movement, book
value per share grew 8.8% for the year. There has been a rapid investor
flight to the dollar in search of safety, driven by the decline in oil
prices, economic uncertainty in many countries and regions, and
geopolitical tensions. ACE is a truly global multinational insurer, and
we are dollar-based. Our diversified presence, product and customer
capabilities, and distribution focus in 54 countries are a unique source
of earnings strength that enables us to take advantage of so many
opportunities around the globe over time.
“In the quarter, we closed our acquisition of the large corporate P&C
business of Brazil’s Itaú Seguros and announced our intention to
purchase the U.S. high net worth personal lines business of Fireman’s
Fund. These are just two of many investments we made last year in the
future of our company that will strengthen our presence and capabilities
and increase our ability to produce sustainable outperformance. We are
off to a good start in January and we remain confident in our strategy
and are relentless in our drive to execute with excellence.”
Operating highlights for the quarter and full year ended December 31,
2014, were as follows:
|
(in millions of U.S. dollars except for
percentages)
|
|
4Q
2014
|
|
4Q
2013
|
|
Change
|
|
Full Year
2014
|
|
Full Year
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P&C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
$
|
3,803
|
|
|
$
|
3,712
|
|
|
2.4
|
%
|
|
$
|
15,787
|
|
|
$
|
15,053
|
|
|
4.9
|
%
|
|
Net premiums written constant-dollar
|
|
|
|
|
$
|
3,621
|
|
|
5.0
|
%
|
|
|
|
|
$
|
14,913
|
|
|
5.9
|
%
|
|
Underwriting income
|
|
$
|
444
|
|
|
$
|
416
|
|
|
7.1
|
%
|
|
$
|
1,898
|
|
|
$
|
1,772
|
|
|
7.2
|
%
|
|
Combined ratio
|
|
|
88.5
|
%
|
|
|
89.3
|
%
|
|
|
|
|
87.7
|
%
|
|
|
88.0
|
%
|
|
|
|
Current accident year underwriting income excluding catastrophe
losses
|
|
$
|
406
|
|
|
$
|
330
|
|
|
23.3
|
%
|
|
$
|
1,659
|
|
|
$
|
1,469
|
|
|
13.0
|
%
|
|
Current accident year combined ratio excluding catastrophe losses
|
|
|
89.5
|
%
|
|
|
91.5
|
%
|
|
|
|
|
89.3
|
%
|
|
|
90.0
|
%
|
|
|
|
Global P&C (excludes Agriculture)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
$
|
3,559
|
|
|
$
|
3,456
|
|
|
3.0
|
%
|
|
$
|
14,197
|
|
|
$
|
13,426
|
|
|
5.7
|
%
|
|
Net premiums written constant-dollar
|
|
|
|
|
$
|
3,365
|
|
|
5.8
|
%
|
|
|
|
|
$
|
13,286
|
|
|
6.9
|
%
|
|
Underwriting income
|
|
$
|
385
|
|
|
$
|
438
|
|
|
(12.0
|
)%
|
|
$
|
1,762
|
|
|
$
|
1,683
|
|
|
4.8
|
%
|
|
Combined ratio
|
|
|
89.1
|
%
|
|
|
87.4
|
%
|
|
|
|
|
87.4
|
%
|
|
|
87.1
|
%
|
|
|
|
Current accident year underwriting income excluding catastrophe
losses
|
|
$
|
347
|
|
|
$
|
350
|
|
|
(0.7
|
)%
|
|
$
|
1,476
|
|
|
$
|
1,386
|
|
|
6.6
|
%
|
|
Current accident year combined ratio excluding catastrophe losses
|
|
|
90.2
|
%
|
|
|
89.9
|
%
|
|
|
|
|
89.4
|
%
|
|
|
89.4
|
%
|
|
|
|
Agriculture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
$
|
244
|
|
|
$
|
256
|
|
|
(5.0
|
)%
|
|
$
|
1,590
|
|
|
$
|
1,627
|
|
|
(2.3
|
)%
|
|
Underwriting income (loss)
|
|
$
|
59
|
|
|
$
|
(22
|
)
|
|
NM
|
|
$
|
136
|
|
|
$
|
89
|
|
|
52.8
|
%
|
|
Combined ratio
|
|
|
81.8
|
%
|
|
|
105.2
|
%
|
|
|
|
|
91.1
|
%
|
|
|
94.7
|
%
|
|
|
|
Current accident year underwriting income (loss) excluding
catastrophe losses
|
|
$
|
59
|
|
|
$
|
(20
|
)
|
|
NM
|
|
$
|
183
|
|
|
$
|
83
|
|
|
121.1
|
%
|
|
Current accident year combined ratio excluding catastrophe losses
|
|
|
82.4
|
%
|
|
|
104.8
|
%
|
|
|
|
|
87.8
|
%
|
|
|
95.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
P&C net premiums earned for the quarter increased 2.1%, and Global P&C
net premiums earned increased 5.4% in constant dollars. For the year,
P&C net premiums earned increased 6.2%, and Global P&C net premiums
earned increased 8.2% in constant dollars.
-
The P&C expense ratio for the quarter was 29.9%, compared with 28.0%
last year. The Global P&C expense ratio, which excludes Agriculture,
was 32.2% compared with 31.7% last year. The Agriculture expense ratio
for the quarter was 4.6% compared with (1.1)% last year. For the year,
the P&C expense ratio was 29.4% compared with 28.4% last year. The
Global P&C expense ratio for the year was 32.1% compared with 31.5%
last year.
-
Total P&C pre-tax and after-tax catastrophe losses including
reinstatement premiums for the quarter were $69 million (1.7
percentage points of the combined ratio) and $64 million,
respectively, compared with $36 million (1.0 percentage point of the
combined ratio) and $31 million, respectively, last year. For the
year, total P&C pre-tax and after-tax catastrophe losses including
reinstatement premiums were $288 million and $249 million,
respectively, compared with $227 million and $197 million,
respectively, last year.
-
Favorable prior period development pre-tax for the quarter, net of a
$130 million pre-tax charge for asbestos and environmental and other
run-off businesses, was $107 million (2.7 percentage points of the
combined ratio) compared with $122 million (3.2 percentage points of
the combined ratio) net of a comparable $91 million pre-tax charge
last year.
-
Operating cash flow was $1.3 billion for the quarter and $4.5 billion
for the year.
-
Net loss reserves increased $659 million for the year after adjusting
for foreign exchange.
-
Net investment income for the quarter was $577 million compared with
$557 million last year. Net investment income for the year was $2.3
billion compared with $2.1 billion last year.
-
Net realized and unrealized losses pre-tax totaled $61 million for the
quarter, which included net realized losses of $161 million and net
unrealized gains of $100 million. Net realized losses included a loss
of $153 million from derivative accounting related to variable annuity
reinsurance.
-
Net income in 2014 was negatively impacted relative to 2013 for both
the quarter and year as a result of the mark-to-market accounting
associated with the company’s variable annuity reinsurance business.
The relative difference is primarily due to interest rates, which fell
during 2014 after rising during 2013.
-
The operating effective tax rate was 12.7% for the quarter. The
effective tax rate computed using net income was 29.5% for the
quarter, due principally to a deferred tax charge related to
unrealized foreign exchange losses during the quarter.
-
Operating return on equity was 11.8% for the quarter and 12.0% for the
year. Return on equity computed using net income was 7.5% for the
quarter and 9.8% for the year.
-
Share repurchases totaled $430 million, or approximately 3.8 million
shares, during the quarter. Since the inception of the November 2013
share repurchase authorization, the company has repurchased
approximately 14.5 million shares for $1.5 billion through
December 31, 2014.
-
Book value per share decreased 0.4% to $90.02 from $90.38 at
September 30, 2014, and increased 6.1% from $84.83 at December 31,
2013. Unfavorable foreign currency movement negatively impacted book
value by $596 million in the quarter and $747 million for the year.
-
Tangible book value per share decreased 1.9% to $72.61 from $74.05 at
September 30, 2014, and increased 5.3% from $68.93 at December 31,
2013. Excluding unfavorable foreign currency movement of $747 million,
tangible book value per share increased 8.6% for the year. Goodwill
and intangibles relating to the acquisitions of the large corporate
P&C business of Itaú Seguros, S.A. and The Siam Commercial Samaggi
Insurance PCL had an additional negative impact of 2.7%. Excluding the
impact of both unfavorable foreign currency movement and the
acquisitions, tangible book value per share increased 11.3% for the
year.
Details of financial results by business segment are available in the
ACE Limited Financial Supplement. Key segment items for the quarter and
full year ended December 31, 2014, include:
-
Insurance – North American P&C (excluding Agriculture): Net premiums
written increased 4.2% for the quarter. The combined ratio was 90.2%
for the quarter compared with 86.2%. The combined ratio was 88.4% for
the year compared with 86.9%. The current accident year combined ratio
excluding catastrophe losses was 89.1% for the quarter compared with
87.2%. The current accident year combined ratio excluding catastrophe
losses for the year was 88.0% compared with 87.6%. Favorable prior
period development in the quarter of $11 million included $130 million
of adverse development for legacy asbestos and environmental liability
exposures.
-
Insurance – North American Agriculture: Net premiums written decreased
5.0% for the quarter. The combined ratio was 81.8% for the quarter
compared with 105.2%. The combined ratio was 91.1% for the year
compared with 94.7%. The current accident year combined ratio
excluding catastrophe losses was 82.4% for the quarter compared with
104.8%. The current accident year combined ratio excluding catastrophe
losses for the year was 87.8% compared with 95.1%.
-
Insurance – Overseas General: Net premiums written increased 3.0% for
the quarter, or 8.4% on a constant-dollar basis. The combined ratio
was 86.3% for the quarter compared with 88.1%. The combined ratio was
85.8% for the year compared with 87.2%. The current accident year
combined ratio excluding catastrophe losses was 89.4% for the quarter
compared with 91.6%. The current accident year combined ratio
excluding catastrophe losses for the year was 89.9% compared with
90.5%.
-
Global Reinsurance: Net premiums written decreased 9.4% for the
quarter. The combined ratio was 76.5% for the quarter compared with
68.4%. The combined ratio was 72.3% for the year compared with 65.9%.
The current accident year combined ratio excluding catastrophe losses
was 76.2% for the quarter compared with 73.6%. The current accident
year combined ratio excluding catastrophe losses for the year was
75.6% compared with 70.9%.
-
Life: Operating income was $76 million for the quarter compared with
$86 million last year. The decrease was primarily due to a one-time
tax benefit last year. International life insurance net premiums
written and deposits collected increased 20.5% for the quarter on a
constant-dollar basis. For the year, international life insurance net
premiums written and deposits collected increased 18.4% on a
constant-dollar basis.
Please refer to the ACE Limited Financial
Supplement, dated December 31, 2014, which is posted on the
company's website in the Investor Information section, and access
Financial Reports for more detailed information on individual segment
performance, together with additional disclosure on reinsurance
recoverable, loss reserves, investment portfolio and capital structure.
ACE will hold its fourth quarter earnings conference call on Wednesday,
January 28, 2015, beginning at 8:30 a.m. Eastern. The earnings
conference call will be available via live webcast at www.acegroup.com
or by dialing 888-297-0339 (within the United States) or 719-457-2506
(international), passcode 1087118. Please refer to the ACE Group website
in the Investor Information section under Calendar of Events for
details. A replay of the call will be available until Wednesday,
February 11, 2015, and the archived webcast will be available for
approximately one month. To listen to the replay, please dial
888-203-1112 (in the United States) or 719-457-0820 (international),
passcode 1087118.
About ACE Group
ACE Group is one of the world’s largest multiline property and casualty
insurers. With operations in 54 countries, ACE provides commercial and
personal property and casualty insurance, personal accident and
supplemental health insurance, reinsurance and life insurance to a
diverse group of clients. ACE Limited, the parent company of ACE Group,
is listed on the New York Stock Exchange (NYSE: ACE) and is a component
of the S&P 500 index. Additional information can be found at: www.acegroup.com.
(1) All comparisons are with the same period last year unless
specifically stated.
Regulation G - Non-GAAP Financial Measures
In presenting our results, we 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 and financial condition. However, they should not
be viewed as a substitute for measures determined in accordance with
generally accepted accounting principles (GAAP).
Adjusted net realized gains (losses), net of tax,
includes net realized gains (losses) and net realized gains (losses)
recorded in other income (expense) related to unconsolidated
subsidiaries, and excludes realized gains and losses on crop
derivatives. These derivatives were purchased to provide economic
benefit, in a manner similar to reinsurance protection, in the event
that a significant decline in commodity pricing will impact underwriting
results. We view gains and losses on these derivatives as part of the
results of our underwriting operations, and therefore realized gains and
losses from these derivatives are reclassified to adjusted losses and
loss expenses. The P&C combined ratio includes adjusted losses and loss
expenses in the ratio numerator.
Net premiums written on a constant-dollar basis
is a financial measure which excludes the impact of foreign exchange. We
believe it is useful to evaluate the trends in net premiums written,
exclusive of the effect of fluctuations in exchange rates between the
U.S. dollar and the currencies in which our international business is
transacted, as these exchange rates could fluctuate significantly
between periods and distort the analysis of trends. The impact is
determined by assuming constant foreign exchange rates between periods
by translating prior period results using the same local currency
exchange rates as the comparable current period.
Underwriting income, P&C underwriting income, and
Global P&C underwriting income are calculated by subtracting
losses and loss expenses, policy benefits, policy acquisition costs and
administrative expenses from net premiums earned. P&C underwriting
income also includes gains (losses) on crop derivatives. We use
underwriting income and operating ratios to monitor the results of our
operations without the impact of certain factors, including net
investment income, other income (expense), interest and income tax
expense and adjusted net realized gains (losses). Current accident year
underwriting income excluding catastrophe losses is underwriting income
adjusted to exclude catastrophe losses and prior period development
(PPD). We believe it is useful to exclude catastrophe losses, as they
are not predictable as to timing and amount, and PPD as these unexpected
loss developments on historical reserves are not indicative of our
current underwriting performance. We believe the use of these measures
enhances the understanding of our results of operations by highlighting
the underlying profitability of our insurance business.
Operating income or income excluding adjusted net
realized gains (losses), net of tax is a common performance
measurement for insurance companies. We believe this presentation
enhances the understanding of our results of operations by highlighting
the underlying profitability of our insurance business. We exclude
adjusted net realized gains (losses) because the amount of these gains
(losses) is heavily influenced by the availability of market
opportunities.
P&C combined ratio excluding catastrophe losses
and PPD or current accident year P&C combined ratio excluding
catastrophe losses exclude impacts of catastrophe losses and PPD.
We believe this measure provides a better evaluation of our core
underwriting performance and enhances the understanding of the trends in
our property and casualty business that may be obscured by these items.
Global P&C performance metrics comprise
consolidated operating results (including corporate) and exclude the
operating results of the company’s Life and Insurance – North American
Agriculture segments. We believe that these measures are useful and
meaningful to investors as they are used by management to assess the
company’s global P&C operations which are the most economically similar.
We exclude the Insurance – North American Agriculture and Life segments
because the results of these businesses do not always correlate with the
results of our global P&C operations.
Life net premiums written and deposits collected,
excluding life reinsurance, is adjusted to include deposits
collected on universal life and investment contracts (life deposits) and
exclude results from our life reinsurance business. Life deposits are
not reflected as revenues in our consolidated statements of operations
in accordance with GAAP. We include life deposits in presenting growth
in our Life business because new life deposits are an important
component of production and key to our efforts to grow our business. We
exclude results associated with life reinsurance as there is no new life
reinsurance business currently being written.
Operating return on equity (ROE) or ROE calculated
using operating income is an annualized financial measure. The
ROE numerator includes income adjusted to exclude adjusted net realized
gains (losses), net of tax. The ROE denominator includes the average
shareholders' equity for the period adjusted to exclude unrealized gains
(losses) on investments, net of tax. To annualize a quarterly rate,
multiply by four. Annualized ROE calculated using operating income is a
useful measure as it enhances the understanding of the return on
shareholders' equity by highlighting the underlying profitability
relative to shareholders' equity excluding the effect of unrealized
gains and losses on our investments.
Tangible book value per common share is
shareholders' equity less goodwill and other intangible assets divided
by the shares outstanding. We believe that goodwill and other intangible
assets are not indicative of our underlying insurance results or trends
and make book value comparisons to less acquisitive peer companies less
meaningful.
Tangible book value per common share excluding
2014 acquisitions is shareholders' equity less goodwill and other
intangible assets divided by the shares outstanding. The numerator adds
back the goodwill and other intangible assets related to the 2014
acquisitions of the large corporate P&C insurance business of Itaú
Seguros, S.A. and The Siam Commercial Samaggi Insurance PCL in order to
control for the distortive effect of acquisitions. In addition, we
disclose per share measures that exclude the impact of foreign currency
fluctuations during the year in order to adjust for the distortive
effects of fluctuations in exchange rates.
Other income (expense) – operating excludes
from consolidated Other income (expense) the portion of net realized
gains and losses related to unconsolidated entities and gains and losses
from fair value changes in separate account assets that do not qualify
for separate account reporting under GAAP. Net realized gains (losses)
related to unconsolidated entities is excluded from operating income in
order to enhance the understanding of our core results of operations as
they are heavily influenced by, and fluctuate in part according to
market conditions.
See reconciliation of Non-GAAP Financial Measures on pages 22-24 in the
Financial Supplement. These measures should not be viewed as a
substitute for net income, return on equity, or effective tax rate
determined in accordance with GAAP.
NM - not meaningful comparison
Cautionary Statement Regarding
Forward-Looking Statements:
Forward-looking statements made in this press release, such as those
related to company performance including 2015 performance and growth
opportunities, reflect our 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 that could cause actual
results to differ materially, including without limitation, the
following: competition, pricing and policy term trends, the levels of
new and renewal business achieved, the frequency of unpredictable
catastrophic events, actual loss experience, uncertainties in the
reserving or settlement process, integration activities and performance
of acquired companies, new theories of liability, judicial, legislative,
regulatory and other governmental developments, litigation tactics and
developments, investigation developments and actual settlement terms,
the amount and timing of reinsurance recoverable, credit developments
among reinsurers, rating agency action, possible terrorism or the
outbreak and effects of war, economic, political, regulatory,
insurance and reinsurance business conditions, potential strategic
opportunities including acquisitions and our ability to achieve and
integrate them, as well as management's response to these factors, and
other factors identified in our filings with the Securities and Exchange
Commission. Given uncertainties, it is possible the closing of
the above-referenced acquisition could also be delayed or not occur. 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. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
|
|
|
|
ACE Limited
|
|
Summary Consolidated Balance Sheets
|
|
(in millions of U.S. dollars, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
December 31
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Investments
|
|
$
|
62,904
|
|
$
|
60,928
|
|
Cash
|
|
655
|
|
579
|
|
Insurance and reinsurance balances receivable
|
|
5,426
|
|
5,026
|
|
Reinsurance recoverable on losses and loss expenses
|
|
11,992
|
|
11,227
|
|
Other assets
|
|
17,271
|
|
16,750
|
|
|
Total assets
|
|
$
|
98,248
|
|
$
|
94,510
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Unpaid losses and loss expenses
|
|
$
|
38,315
|
|
$
|
37,443
|
|
Unearned premiums
|
|
8,222
|
|
7,539
|
|
Other liabilities
|
|
22,124
|
|
20,703
|
|
|
Total liabilities
|
|
68,661
|
|
65,685
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
29,587
|
|
28,825
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
98,248
|
|
$
|
94,510
|
|
|
|
|
|
|
|
|
|
Book value per common share
|
|
$
|
90.02
|
|
$
|
84.83
|
|
|
|
|
|
|
|
|
|
|
|
ACE Limited
|
|
Summary Consolidated Financial Data
|
|
(in millions of U.S. dollars, except share, per share data, and
ratios)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31
|
|
December 31
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
$
|
5,746
|
|
|
$
|
5,462
|
|
|
$
|
23,390
|
|
|
$
|
22,828
|
|
|
Net premiums written
|
|
4,326
|
|
|
4,216
|
|
|
17,799
|
|
|
17,025
|
|
|
Net premiums earned
|
|
4,370
|
|
|
4,363
|
|
|
17,426
|
|
|
16,613
|
|
|
Losses and loss expenses
|
|
2,416
|
|
|
2,517
|
|
|
9,649
|
|
|
9,348
|
|
|
Policy benefits
|
|
134
|
|
|
136
|
|
|
517
|
|
|
515
|
|
|
Policy acquisition costs
|
|
764
|
|
|
702
|
|
|
3,075
|
|
|
2,659
|
|
|
Administrative expenses
|
|
590
|
|
|
570
|
|
|
2,245
|
|
|
2,211
|
|
|
Net investment income
|
|
577
|
|
|
557
|
|
|
2,252
|
|
|
2,144
|
|
|
Net realized gains (losses)
|
|
(210
|
)
|
|
154
|
|
|
(507
|
)
|
|
504
|
|
|
Interest expense
|
|
67
|
|
|
70
|
|
|
280
|
|
|
275
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Gains (losses) from separate account assets
|
|
(3
|
)
|
|
9
|
|
|
2
|
|
|
16
|
|
|
|
Other
|
|
24
|
|
|
(2
|
)
|
|
80
|
|
|
(31
|
)
|
|
Income tax expense
|
|
232
|
|
|
88
|
|
|
634
|
|
|
480
|
|
|
Net income
|
|
$
|
555
|
|
|
$
|
998
|
|
|
$
|
2,853
|
|
|
$
|
3,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
2.47
|
|
|
$
|
2.39
|
|
|
$
|
9.79
|
|
|
$
|
9.35
|
|
|
Net income
|
|
$
|
1.66
|
|
|
$
|
2.90
|
|
|
$
|
8.42
|
|
|
$
|
10.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
334.6
|
|
|
344.2
|
|
|
339.0
|
|
|
344.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P&C combined ratio
|
|
|
|
|
|
|
|
|
|
Loss and loss expense ratio
|
|
58.6
|
%
|
|
61.3
|
%
|
|
58.3
|
%
|
|
59.6
|
%
|
|
Policy acquisition cost ratio
|
|
16.6
|
%
|
|
15.6
|
%
|
|
16.8
|
%
|
|
15.7
|
%
|
|
Administrative expense ratio
|
|
13.3
|
%
|
|
12.4
|
%
|
|
12.6
|
%
|
|
12.7
|
%
|
|
P&C combined ratio
|
|
88.5
|
%
|
|
89.3
|
%
|
|
87.7
|
%
|
|
88.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
P&C underwriting income
|
|
$
|
444
|
|
|
$
|
416
|
|
|
$
|
1,898
|
|
|
$
|
1,772
|
|
|
Other income (expense) - operating
|
|
$
|
(25
|
)
|
|
$
|
(27
|
)
|
|
$
|
(111
|
)
|
|
$
|
(123
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACE Limited
|
|
Consolidated Supplemental Segment Information
|
|
(in millions of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31
|
|
December 31
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Premiums Written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance – North American P&C
|
|
$
|
2,539
|
|
|
|
$
|
2,439
|
|
|
|
$
|
9,036
|
|
|
|
$
|
8,720
|
|
|
Insurance – North American Agriculture
|
|
302
|
|
|
|
217
|
|
|
|
2,378
|
|
|
|
2,661
|
|
|
Insurance – Overseas General
|
|
2,212
|
|
|
|
2,126
|
|
|
|
8,853
|
|
|
|
8,314
|
|
|
Global Reinsurance
|
|
140
|
|
|
|
154
|
|
|
|
994
|
|
|
|
1,057
|
|
|
Life
|
|
553
|
|
|
|
526
|
|
|
|
2,129
|
|
|
|
2,076
|
|
|
Total
|
|
$
|
5,746
|
|
|
|
$
|
5,462
|
|
|
|
$
|
23,390
|
|
|
|
$
|
22,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Premiums Written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance – North American P&C
|
|
$
|
1,669
|
|
|
|
$
|
1,602
|
|
|
|
$
|
6,263
|
|
|
|
$
|
5,915
|
|
|
Insurance – North American Agriculture
|
|
244
|
|
|
|
256
|
|
|
|
1,590
|
|
|
|
1,627
|
|
|
Insurance – Overseas General
|
|
1,749
|
|
|
|
1,699
|
|
|
|
6,999
|
|
|
|
6,520
|
|
|
Global Reinsurance
|
|
141
|
|
|
|
155
|
|
|
|
935
|
|
|
|
991
|
|
|
Life
|
|
523
|
|
|
|
504
|
|
|
|
2,012
|
|
|
|
1,972
|
|
|
Total
|
|
$
|
4,326
|
|
|
|
$
|
4,216
|
|
|
|
$
|
17,799
|
|
|
|
$
|
17,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Premiums Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance – North American P&C
|
|
$
|
1,560
|
|
|
|
$
|
1,511
|
|
|
|
$
|
6,107
|
|
|
|
$
|
5,721
|
|
|
Insurance – North American Agriculture
|
|
327
|
|
|
|
426
|
|
|
|
1,526
|
|
|
|
1,678
|
|
|
Insurance – Overseas General
|
|
1,758
|
|
|
|
1,700
|
|
|
|
6,805
|
|
|
|
6,333
|
|
|
Global Reinsurance
|
|
226
|
|
|
|
245
|
|
|
|
1,026
|
|
|
|
976
|
|
|
Life
|
|
499
|
|
|
|
481
|
|
|
|
1,962
|
|
|
|
1,905
|
|
|
Total
|
|
$
|
4,370
|
|
|
|
$
|
4,363
|
|
|
|
$
|
17,426
|
|
|
|
$
|
16,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance – North American P&C
|
|
$
|
372
|
|
|
|
$
|
402
|
|
|
|
$
|
1,498
|
|
|
|
$
|
1,446
|
|
|
Insurance – North American Agriculture
|
|
45
|
|
|
|
(20
|
)
|
|
|
96
|
|
|
|
63
|
|
|
Insurance – Overseas General
|
|
294
|
|
|
|
279
|
|
|
|
1,163
|
|
|
|
1,094
|
|
|
Global Reinsurance
|
|
127
|
|
|
|
145
|
|
|
|
562
|
|
|
|
576
|
|
|
Life
|
|
76
|
|
|
|
86
|
|
|
|
297
|
|
|
|
307
|
|
|
Corporate
|
|
(87
|
)
|
|
|
(68
|
)
|
|
|
(296
|
)
|
|
|
(269
|
)
|
|
Total
|
|
$
|
827
|
|
|
|
$
|
824
|
|
|
|
$
|
3,320
|
|
|
|
$
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: ACE Limited