ACE Reports Fourth Quarter Operating Income of $492 Million after Superstorm Sandy Losses of $393 Million After-Tax; Book Value

  ACE Reports Fourth Quarter Operating Income of $492 Million after Superstorm
  Sandy Losses of $393 Million After-Tax; Book Value up 2.1% in Quarter with
  Operating ROE of 8%

  * Book value and tangible book value up 13.1% and 15.5% for the year
  * Full-year net income up over 75% and operating income up over 12%
  * Full-year combined ratio was 93.9%; operating ROE was 11.0%
  * Total net premiums written up 6.0% for the year in constant dollars and
    9.1% excluding crop insurance
  * Full-year underwriting income was $1.2 billion, up over 11%
  * Full-year investment income was $2.2 billion, down 2.8%
  * Operating cash flow was $4 billion for the year

Business Wire

ZURICH -- January 29, 2013

ACE Limited (NYSE: ACE) today reported net income for the quarter ended
December 31, 2012, of $2.22 per share, compared with $2.15 per share for the
same quarter last year.^(1) Income excluding net realized gains (losses) was
$1.43 per share, compared with $1.90 per share for the same quarter last
year.^(2) After-tax catastrophe losses for the fourth quarter 2012 were $400
million, net of reinsurance and including reinstatement premiums, or $1.16 per
share, compared with $137 million, or $0.40 per share, for the same quarter
last year. Book value and tangible book value increased 2.1% and 2.7%,
respectively, from September 30, 2012. Book value and tangible book value per
share now stand at $80.90 and $66.28, respectively. Operating return on equity
(ROE) for the quarter was 8.0%.^(2) The property and casualty (P&C) combined
ratio for the quarter was 105.5%, which includes net pre-tax losses from
Superstorm Sandy of $502 million ($393 million after-tax) and a pre-tax charge
for asbestos and environmental and other run-off business of $140 million ($90
million after-tax). Operating income includes a tax benefit of $121 million
from the favorable resolution of prior years’ tax matters.

Fourth Quarter Summary
(in millions, except per share amounts)
(Unaudited)
                                                                       
                                                  (Per Share - Diluted)
                     2012      2011      Change   2012       2011       Change
                                                                             
Net income           $ 765     $ 735     4   %    $ 2.22     $ 2.15     3   %
Net realized
gains (losses),      273       87        214 %    0.79       0.25       216 %
net of tax
Income excluding
net realized
gains                $ 492     $ 648     (24 )%   $ 1.43     $ 1.90     (25 )%

(losses), net of
tax ^ (2)
                                                                             

For the year ended December 31, 2012, net income was $7.89 per share, compared
with $4.52 per share for 2011. Income excluding net realized gains (losses)
was $7.65 per share, compared with $6.84 per share for 2011. Book value
increased $3.2 billion, up 13.1% from December 31, 2011, and tangible book
value increased $3.0 billion, up 15.5%. The P&C combined ratio for the year
was 93.9%.

Full Year Summary
(in millions, except per share amounts)
(Unaudited)
                                                                       
                                                  (Per Share - Diluted)
                 2012        2011        Change   2012       2011       Change
                                                                         
Net income       $ 2,706     $ 1,540     76  %    $ 7.89     $ 4.52     75  %
Net realized
gains            82          (791    )   NM       0.24       (2.32  )   NM
(losses),
net of tax
Income
excluding
net realized
gains
   (losses),
   net of        $ 2,624     $ 2,331     13  %    $ 7.65     $ 6.84     12  %
   tax ^ (2)
                                                                             

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited,
commented: “ACE had a good fourth quarter, which contributed to an excellent
year. Even with the impact of Superstorm Sandy, we produced over $490 million
of operating income and increased book value per share 2%. These results
continue to demonstrate the strength of our underwriting culture and balance
sheet, and the benefits of our globally diversified business.

“For the year, after-tax operating income was $2.6 billion, up 13% from 2011.
We produced $1.2 billion in underwriting income – an increase of 11% over
prior year – and a combined ratio of 93.9%. This is an excellent underwriting
result, particularly given the worst drought conditions in the U.S. in 25
years as well as the losses from Sandy. We also produced strong investment
results, with investment income down less than 3% – a good performance
considering record low interest rates. Our operating ROE was 11% and per share
book value grew 12% for the year, bringing three-year and five-year compounded
annual book value per share growth to 11.4% and 10.7%, respectively.

“Net premiums globally grew 6% for the year and in constant dollars – 9%
excluding our crop insurance business. Our premium revenue growth is
benefitting from an improved price environment in the U.S., our large and
growing business presence around the world in Asia, Latin America and Europe,
and our unique and balanced portfolio of insurance products including
commercial, specialty and personal P&C, personal accident and life. Insurance
pricing in the U.S. continues to improve and price increases are spreading to
more product classes – a trend that has continued into the first quarter. With
low interest rates pressuring industry returns, we expect this orderly and
rational trend of price increases to continue. For our company, a continued
focus on underwriting discipline, enhanced through the use of portfolio
management and data analytics, is contributing significantly to both our
premium growth and underwriting profitability, and we expect this discipline
will continue to make a notable difference in our results going forward.”

Operating highlights for the quarter and full year ended December 31, 2012,
were as follows: ^(1)

  * For the quarter, P&C net premiums written increased 0.3%, and 0.7% on a
    constant-dollar basis. Excluding the company’s crop insurance business,
    P&C net premiums written increased 7.2%, and 7.8% on a constant-dollar
    basis. For the year, P&C net premiums written increased 4.7%, and 6.3% on
    a constant-dollar basis. Excluding the crop insurance business, P&C net
    premiums written for the year increased 8.0%, and 9.9% on a
    constant-dollar basis.
  * Total pre-tax and after-tax catastrophe losses including reinstatement
    premiums for the quarter were $511 million, and $400 million,
    respectively, which included Superstorm Sandy losses of $502 million and
    $393 million pre-tax and after-tax, respectively. Total pre-tax and
    after-tax catastrophe losses for the same quarter in 2011 were $155
    million and $137 million, respectively.
  * The P&C combined ratio for the quarter was 105.5%, which includes losses
    from Superstorm Sandy and a pre-tax charge for asbestos and environmental
    and other run-off business reserve strengthening of $140 million ($90
    million after-tax).
  * The P&C current accident year combined ratio for the quarter excluding
    catastrophe losses improved to 91.4% compared with 92.0% last year.
    Excluding crop insurance and catastrophe losses, the P&C current accident
    year combined ratio for the quarter was 90.9% compared with 92.9% last
    year.
  * Favorable prior period development pre-tax for the quarter, including the
    charge for asbestos and environmental, was $37 million, representing 1.1
    percentage points of the combined ratio. The quarter included a reserve
    charge for asbestos and environmental and other run-off business of $140
    million of which $118 million was a pre-tax addition to our asbestos and
    environmental reserves.
  * The P&C expense ratio for the quarter was 30.0% compared with 29.6% last
    year. For the year, the P&C expense ratio was 28.2% compared with 28.7% in
    2011.
  * Operating cash flow was $970 million for the quarter and $4.0 billion for
    the year.
  * Net loss reserves increased $780 million for the year.
  * The underwriting loss ^(2) for the quarter was $90 million. Underwriting
    income ^(2) for the year was up 11.2% to $1.24 billion compared with $1.12
    billion in 2011.
  * Net investment income for the quarter was $567 million compared with $565
    million in 2011. The quarterly amount included $42 million of greater than
    expected private equity and other distributions and the income benefit of
    an insurance contract classified as a deposit. Net investment income for
    the year was $2.2 billion, down 2.8% compared to last year.
  * The operating effective tax rate ^(2) for the quarter and year included a
    tax benefit of $121 million from the favorable resolution of prior years’
    tax matters.
  * Net realized and unrealized gains pre-tax for the quarter totaled $189
    million, which included net realized gains from derivative accounting
    related to variable annuity reinsurance of $173 million, including the
    effect of foreign exchange.
  * Operating return on equity ^(2) was 8.0% for the quarter and 11.0% for the
    year. Return on equity computed using net income was 11.2% and 10.4% for
    the year.
  * Book value per share ^(2) increased 1.9% to $80.90 from $79.36 at
    September 30, 2012, and increased 12.0% from $72.22 at December 31,
    2011.^(3)
  * Tangible book value per share ^(2) increased 2.5% to $66.28 from $64.67 at
    September 30, 2012, and increased 14.3% from $57.97 at December 31, 2011.

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, 2012, include:

  * Insurance-North American: Net premiums written decreased 6.5% for the
    quarter primarily due to increased crop insurance premium cessions to the
    U.S. government as a result of the government’s crop insurance profit and
    loss calculation formula. Excluding the crop insurance business, net
    premiums written increased 6.9%. For the quarter, the combined ratio was
    111.9% compared with 91.0%. For the quarter, the current accident year
    combined ratio excluding catastrophe losses was 90.0% compared with 90.3%
    last year, and excluding the crop insurance business it was 88.5%. For the
    year, the combined ratio was 97.1% compared with 93.8% last year. For the
    year, the current accident year combined ratio excluding catastrophe
    losses was 93.4% compared with 91.5% last year, and excluding the crop
    insurance business it was 90.1%.
  * Insurance-Overseas General: Net premiums written increased 7.1% for the
    quarter, and 8.5% on a constant-dollar basis. The combined ratio was 95.4%
    compared with 94.5%. The current accident year combined ratio excluding
    catastrophe losses was 92.5% compared with 93.4% last year. For the year,
    the combined ratio was 89.7% compared with 94.5% last year. For the year,
    the current accident year combined ratio excluding catastrophe losses was
    92.2% compared with 93.1% last year.
  * Global Reinsurance: Net premiums written increased 12.0% for the quarter.
    The combined ratio was 101.7% compared with 77.1%. The current accident
    year combined ratio excluding catastrophe losses was 69.9% compared with
    75.3% last year. For the year, the combined ratio was 77.5% compared with
    85.6% last year. For the year, the current accident year combined ratio
    excluding catastrophe losses was 72.8% compared with 75.2% last year.
  * Life: Operating income for the quarter was $74 million compared with $79
    million last year. Excluding the life reinsurance business, operating
    income was up $5 million.

Please refer to the ACE Limited Financial Supplement, dated December 31, 2012,
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.

The company also issued 2013 guidance. Operating income is expected to range
between $6.60 and $7.00 per share. Catastrophe losses included in the estimate
are $475 million pre-tax ($395 million after-tax), which are in line with last
year’s catastrophe loss guidance. The operating income projections included in
this guidance are for current accident year results only and by definition do
not include any estimate for prior period reserve development.

ACE will host its fourth quarter earnings conference call and webcast on
Wednesday, January 30, 2013, beginning at 8:30 a.m. Eastern. The earnings
conference call will be available via live and archived webcast at
www.acegroup.com or by dialing 877-681-3375 (within the United States) or
719-325-4880 (international); passcode 3252473. 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 13,
2013 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 3252473.

The ACE Group is one of the world's largest multiline property and casualty
insurers. With operations in 53 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 the 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.

^(2) Non-GAAP Financial Measures:

Operating income or income excluding 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 net realized gains (losses) and net realized gains (losses) included
in other income (expense) related to partially-owned entities because the
amount of these gains (losses) is heavily influenced by, and fluctuates in
part according to, the availability of market opportunities.

Underwriting income (loss) is calculated by subtracting losses and loss
expenses, policy benefits, policy acquisition costs and administrative
expenses from net premiums earned. 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 net realized gains (losses). Life underwriting income
includes net investment income and gains (losses) from fair value changes in
separate account assets that do not qualify for separate account reporting
under generally accepted accounting principles (GAAP). P&C underwriting income
and consolidated underwriting income are non-GAAP financial measures. 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 effective tax rate is a non-GAAP financial measure. The numerator
excludes tax on net realized gains (losses). The denominator excludes net
realized gains (losses), before tax.

Operating return on equity (ROE) or ROE calculated using income excluding net
realized gains (losses) is an annualized non-GAAP financial measure. The ROE
numerator includes income adjusted to exclude 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 income excluding realized gains (losses) 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.

Book value per common share is shareholders' equity divided by the shares
outstanding.

Tangible book value per common share is shareholders' equity less goodwill and
other intangible assets divided by the shares outstanding.

See reconciliation of Non-GAAP Financial Measures on pages 21-22 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.

^(3) The book value amounts reflect the effects of new accounting guidance for
deferred acquisition costs that is retrospectively applied to periods prior to
January 1, 2012. Refer to the Financial Supplement page 1 for further detail.

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 and guidance, pricing and product mix, economic outlook
and insurance market conditions, 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, and economic, political, regulatory,
insurance and reinsurance business conditions, as well as management's
response to these factors, and other factors identified in our 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. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.

                              (tables to follow)

ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
                                                                  
                                                                  
                                                   December 31     December 31
                                                   2012            2011
                                                                    
Assets
Investments                                        $   60,264      $   55,676
Cash                                               615             614
Insurance and reinsurance balances receivable      4,147           4,387
Reinsurance recoverable on losses and loss         12,078          12,389
expenses
Other assets                                       15,441          14,255
    Total assets                                   $   92,545      $   87,321
                                                                    
Liabilities
Unpaid losses and loss expenses                    $   37,946      $   37,477
Unearned premiums                                  6,864           6,334
Other liabilities                                  20,204          19,178
    Total liabilities                              65,014          62,989
                                                                    
Shareholders' equity
    Total shareholders' equity                     27,531          24,332
    Total liabilities and shareholders' equity     $   92,545      $   87,321
                                                                    
Book value per common share ^(2)                   $   80.90       $   72.22
                                                                        

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
                             2012        2011          2012         2011
                                                                     
Gross premiums written       $ 5,146     $ 4,864       $ 21,593     $ 20,831
Net premiums written         3,657       3,630         16,075       15,372
Net premiums earned          3,848       3,831         15,677       15,387
Losses and loss expenses     2,683       2,286         9,653        9,520
Policy benefits              142         119           521          401
Policy acquisition costs     636         632           2,446        2,472
Administrative expenses      553         531           2,096        2,068     
Underwriting income (loss)   (166    )   263           961          926
^(2)
                                                                     
Net investment income        567         565           2,181        2,242
Net realized gains           272         83            78           (795     )
(losses)
Interest expense             63          63            250          250
Other income (expense):
    Gains (losses) from
    separate account         11          3             29           (36      )
    assets^(2)
    Other                    9           4             (23      )   (45      )
Income tax expense           (135    )   120           270          502       
(benefit)
Net income                   $ 765       $ 735         $ 2,706      $ 1,540   
                                                                     
Diluted earnings per
share:
Income excluding net
realized gains (losses)      $ 1.43      $ 1.90        $ 7.65       $ 6.84
^(2)
Net income                   $ 2.22      $ 2.15        $ 7.89       $ 4.52
                                                                     
Weighted average diluted     343.7       341.0         342.7        340.8
shares outstanding
                                                                     
Loss and loss expense        75.5    %   63.4    %     65.7     %   66.0     %
ratio
Policy acquisition cost      16.2    %   16.3    %     15.3     %   15.8     %
ratio
Administrative expense       13.8    %   13.3    %     12.9     %   12.9     %
ratio
Combined ratio               105.5   %   93.0    %     93.9     %   94.7     %
                                                                              

ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
                                                                     
                                                                   
                             Three Months Ended        Year Ended
                             December 31               December 31
                             2012        2011          2012         2011
                                                                     
Gross Premiums Written
                                                                     
Insurance - North American   $ 2,528     $ 2,394       $ 10,741     $ 10,360
Insurance - Overseas         1,925       1,818         7,702        7,467
General
Global Reinsurance           149         132           1,070        1,014
Life                         544         520           2,080        1,990     
Total                        $ 5,146     $ 4,864       $ 21,593     $ 20,831  
                                                                     
Net Premiums Written
                                                                     
Insurance - North American   $ 1,518     $ 1,624       $ 7,208      $ 6,851
Insurance - Overseas         1,476       1,378         5,863        5,629
General
Global Reinsurance           146         132           1,025        979
Life                         517         496           1,979        1,913     
Total                        $ 3,657     $ 3,630       $ 16,075     $ 15,372  
                                                                     
Net Premiums Earned
                                                                     
Insurance - North American   $ 1,608     $ 1,662       $ 7,019      $ 6,911
Insurance - Overseas         1,497       1,450         5,740        5,614
General
Global Reinsurance           254         249           1,002        1,003
Life                         489         470           1,916        1,859     
Total                        $ 3,848     $ 3,831       $ 15,677     $ 15,387  
                                                                     
Income Excluding Net
Realized Gains (Losses)
^(2)
                                                                     
Insurance - North American   $ 170       $ 342         $ 1,062      $ 1,177
Insurance - Overseas         246         169           994          691
General
Global Reinsurance           74          125           499          401
Life                         74          79            324          315
Corporate                    (72     )   (67     )     (255     )   (253     )
Total                        $ 492       $ 648         $ 2,624      $ 2,331   

Contact:

ACE Limited
Investor Contact:
Helen M. Wilson, 441-299-9283
helen.wilson@acegroup.com
or
Media Contact:
Stephen M. Wasdick, 212-827-4444
stephen.wasdick@acegroup.com