ACE Reports Fourth Quarter Operating Income of $824 Million or $2.39 Per Share, Up 67%, P&C Net Premiums Written up 20% in

  ACE Reports Fourth Quarter Operating Income of $824 Million or $2.39 Per
  Share, Up 67%, P&C Net Premiums Written up 20% in Constant Dollars, and
  Operating Return on Equity of 12.1%

 Record Full-Year Operating Income of $3.2 Billion, up 23%; Combined Ratio of
              89.3% and 88%, Respectively, for Quarter and Year

  *Record full-year operating and net income of $9.35 per share and $10.92
    per share, respectively
  *P&C current accident year combined ratio for the year excluding
    catastrophe losses was 90%, resulting in P&C underwriting income up 111%
  *Book value up 4.7% for the year, or 11.1% excluding unrealized losses,
    with operating ROE of 12.2%
  *Full-year net investment income of over $2.1 billion, down 1.7%

Business Wire

ZURICH -- January 28, 2014

ACE Limited (NYSE: ACE) today reported net income for the quarter ended
December31, 2013, of $2.90 per share, compared with $2.22 per share for the
same quarter last year.^(1) Operating income was $2.39 per share, compared
with $1.43 per share for the same quarter last year. ^ Book value and tangible
book value per share increased 2.2% and 3.0%, respectively, from September30,
2013. Book value and tangible book value per share now stand at $84.83 and
$68.93, respectively. Operating return on equity for the quarter was 12.1%.
The property and casualty (P&C) combined ratio for the quarter was 89.3%.

                                                                             
Fourth Quarter Summary
(in millions, except per share amounts)
(Unaudited)
                                                                
                                                 (Per Share - Diluted)
                   2013     2012     Change    2013      2012      Change
                                                                       
Operating
income, net of     $ 824     $ 492     67.5  %   $ 2.39     $ 1.43     67.1  %
tax
Net realized
gains (losses),    174     273     (36.3)%   0.51     0.79     (35.4)%
net of tax
Net income         $ 998   $ 765   30.5  %   $ 2.90   $ 2.22   30.6  %
                                                                             

For the year ended December31, 2013, net income was $10.92 per share,
compared with $7.89 per share for 2012. Operating income was $9.35 per share,
compared with $7.65 per share for 2012. Book value increased $1.3 billion, up
4.7% from December 31, 2012, and tangible book value increased $865 million,
up 3.8%, and up 6.5% excluding acquisitions. The P&C combined ratio for the
year ended December31, 2013, was 88.0%.

                                       
Full Year Summary
(in millions, except per share amounts)
(Unaudited)
                                                                  
                                                 (Per Share – Diluted)
                 2013       2012      Change   2013         2012    Change
                                                                        
Operating                      $
income, net of   $ 3,217      2,624    22.6%     $ 9.35      $ 7.65   22.2%
tax
Net realized
gains            541       82        NM       1.57        0.24    NM
(losses), net
of tax
Net income       $ 3,758    $       38.9%      $ 10.92   $ 7.89  38.4%
                               2,706
                                                                        

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited,
commented: “ACE had an excellent fourth quarter and a record year. Both our
quarterly and annual results were driven by very strong premium revenue growth
globally and an exceptional underwriting performance. Put simply, we are
growing while achieving good margins – it’s about growth in areas where prices
are attractive and securing improved terms including rate in areas where
they’re not.

“Record full-year after-tax operating income was $3.2 billion or $9.35 per
share, up 23%. At our core we are an underwriting company, and our P&C
combined ratio for the year of 88% produced $1.8 billion of underwriting
income, up over 110%. On a current accident year basis excluding catastrophe
losses, which is an important way to assess the health of our underlying
business, the P&C combined ratio was 90% for the year, almost three points
better than 2012. Of course, like the rest of the industry, we benefited from
light catastrophe losses during the year. In addition, we run our balance
sheet prudently starting with our loss reserves, and as a consequence we also
benefited from positive prior year reserve development.

“Complementing the excellent underwriting results and a product of our strong
cash flow was net investment income of $2.1 billion, which was down less than
2% for the year – a good result given the low interest rate environment. Our
record earnings produced a strong operating ROE of over 12% while per share
book value grew 5% for the year, or 11% if you exclude the unrealized losses
from our investment portfolio as interest rates rose.

“Excluding crop insurance, P&C net premiums written grew 11% last year on a
constant-dollar basis. Premium growth in our commercial and specialty P&C
businesses, in particular, continued to benefit from our underwriting
portfolio management efforts as well as a favorable U.S. rate environment that
has continued into the new year. We are off to a great start in January, and
remembering we are in a risk business, I expect we will have a good year in
2014 as we continue to take advantage of the many growth opportunities we see
around the globe including the U.S.”

Similar to the third quarter presentation and consistent with how management
views the business, the results of the company’s agriculture business, given
its size and nature, are identified separately from the balance of the
company’s P&C business, which is called “global P&C.” Global P&C includes the
company’s Insurance – North American P&C, Insurance – Overseas General and
Global Reinsurance segments. Operating highlights for the quarter and full
year ended December31, 2013, were as follows: ^(1)

                                                                
(in millions of       4Q       4Q       %        Full       Full       %
U.S. dollars except                   Change   Year      Year      Change
for percentages)      2013     2012              2013       2012
P&C
Net premiums          $3,712   $3,140   18.2%    $15,053    $14,096    6.8%
written
Net premiums
written                        $3,098   19.8%               $13,958    7.8%
constant-dollar
^(2)
Underwriting income   $416     $(184)   NM       $1,772     $839       111.2%
(loss)
Combined ratio        89.3%    105.5%            88.0%      93.9%
Current accident
year combined ratio   91.5%    91.4%             90.0%      92.8%
excluding
catastrophe losses
Global P&C
(excludes
Agriculture)
Net premiums          $3,456   $3,056   13.1%    $13,426    $12,237    9.7%
written
Net premiums
written                        $3,014   14.7%               $12,099    11.0%
constant-dollar
Underwriting income   $438     $(185)   NM       $1,683     $899       87.3%
(loss)
Combined ratio        87.4%    106.0%            87.1%      92.4%
Current accident
year combined ratio   89.9%    90.8%             89.4%      91.1%
excluding
catastrophe losses
Agriculture
Net premiums          $256     $84      203.6%   $1,627     $1,859     (12.5)%
written
Underwriting income   $(22)    $1       NM       $89        $(60)      NM
(loss)
Combined ratio        105.2%   99.5%             94.7%      103.2%
                                                                       

^(2) Excluding acquisitions, P&C net premiums written increased 15.5% for the
quarter and 5.2% for the year on a constant-dollar basis.

  *The P&C expense ratio for the quarter was 28.0% compared with 30.0% last
    year. The global P&C expense ratio (excludes Agriculture) was 31.7%
    compared with 32.6% last year. For the year, the P&C expense ratio was
    28.4% compared with 28.2% last year. The global P&C expense ratio
    (excludes Agriculture) for the year was 31.5% compared with 32.4% last
    year.
  *Total pre-tax and after-tax catastrophe losses including reinstatement
    premiums for the quarter were $36 million (1.0 percentage point of the
    combined ratio) and $31 million, respectively. Total pre-tax and after-tax
    catastrophe losses including reinstatement premiums last year were $511
    million and $400 million, respectively.
  *Favorable prior period development pre-tax for the quarter, net of a $91
    million charge for asbestos and environmental and other run-off
    businesses, was $122 million, representing 3.2 percentage points of the
    combined ratio, compared with $37 million last year.
  *Operating cash flow was $1.3 billion for the quarter and $4.0 billion for
    the year.
  *Net loss reserves increased $508 million for the year after adjusting for
    foreign exchange.
  *Net investment income for the quarter was $557 million compared with $567
    million last year. The current quarterly investment income run rate is
    estimated at $540 million. Net investment income for the year was $2.1
    billion, down 1.7% compared to last year.
  *Net realized and unrealized losses pre-tax totaled approximately $21
    million for the quarter, which included net realized gains of $179 million
    and net unrealized losses of $200 million. Net realized gains from
    derivative accounting related to variable annuity reinsurance were $149
    million and included a $92 million realized gain related to an
    out-of-period adjustment for an error in a market valuation model.
  *Operating return on equity was 12.1% for the quarter and 12.2% for the
    year. Return on equity computed using net income was 14.0% for the quarter
    and 13.3% for the year.
  *Book value per share increased 2.2% to $84.83 compared with $82.98 at
    September30, 2013, and increased 4.9% from $80.90 at December31, 2012.
  *Tangible book value per share increased 3.0% to $68.93 from $66.91 at
    September30, 2013, and increased 4.0% from $66.28 at December31, 2012.
    Tangible book value was negatively affected by goodwill and intangibles
    relating to the acquisitions of Fianzas Monterrey and ABA Seguros.
    Excluding the impact of the acquisitions, tangible book value per share
    increased 6.7% 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 December31, 2013, include:

  *Insurance – North American P&C: Net premiums written increased 11.8% for
    the quarter. The combined ratio was 86.2% compared with 114.3%. The
    current accident year combined ratio excluding catastrophe losses was
    87.2% compared with 88.4%. For the year, the combined ratio was 86.9%
    compared with 94.8% last year. The current accident year combined ratio
    excluding catastrophe losses was 87.6% compared with 89.9% last year.
  *Insurance – North American Agriculture: Net premiums written increased
    203.6% for the quarter primarily due to decreased premium cessions to the
    U.S. government as a result of the government's crop insurance profit and
    loss calculation formula when compared to last year. The combined ratio
    was 105.2% compared with 99.5%. The current quarter combined ratio was
    higher than expected primarily due to lower corn yields in a few states.
    For the year, the combined ratio was 94.7% compared with 103.2%.
  *Insurance – Overseas General: Net premiums written increased 15.1% for the
    quarter, or 18.2% on a constant-dollar basis. The combined ratio was 88.1%
    compared with 95.4%. The current accident year combined ratio excluding
    catastrophe losses was 91.6% compared with 92.5%. For the year, the
    combined ratio was 87.2% compared with 89.7% last year.The current
    accident year combined ratio excluding catastrophe losses was 90.5%
    compared with 92.2%.
  *Global Reinsurance: Net premiums written increased 5.5% for the quarter.
    The combined ratio was 68.4% compared with 101.7%. The current accident
    year combined ratio excluding catastrophe losses was 73.6% compared with
    69.9%. For the year, the combined ratio was 65.9% compared with 77.5% last
    year. The current accident year combined ratio excluding catastrophe
    losses was 70.9% compared with 72.8%.
  *Life segment: Operating income was $86 million compared with $74 million
    for the fourth quarter of last year. Net premiums written and deposits
    collected, excluding life reinsurance, increased 3.0% on a constant-dollar
    basis. For the year, net premiums written and deposits collected,
    excluding life reinsurance, increased 10.8% on a constant-dollar basis.

Please refer to the ACE Limited Financial Supplement, dated December 31, 2013,
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 Limited will hold its fourth quarter earnings conference call on
Wednesday, January 29, 2014, beginning at 8:30 a.m. Eastern. The earnings
conference call will be available via live webcast at www.acegroup.com or by
dialing 888-300-2318 (within the United States) or 719-325-2325
(international), passcode 6526575. 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 12, 2014, 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 6526575.

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. The below 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).

Operating income, P&C underwriting income, operating ROE, P&C combined ratio,
and P&C combined ratio excluding catastrophe losses and prior period
development (PPD) includes realized gains and losses associated with fair
value changes on our 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. As such, we view changes in the fair value of these
derivatives as part of the results of our operations and therefore realized
gains and losses from these derivatives are reclassified to losses and loss
expenses. Pre-tax losses from fair value changes in these derivatives were $1
million for the year ended December 31, 2013.

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.

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 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). Current accident year underwriting income is
underwriting income adjusted to exclude PPD. We believe it is useful to
exclude PPD as these unexpected loss developments on historical reserves are
not indicative of our current underwriting performance. 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 GAAP. P&C underwriting income and consolidated underwriting
income are also 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 return on equity (ROE) or ROE calculated using income excluding net
realized gains (losses) is an annualized 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.

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 & casualty business that may be obscured by
these items.

Net premiums written on a constant-dollar basis and P&C net premiums written
on a constant-dollar basis are financial measures which exclude 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. P&C net premiums written excluding acquisitions on a
constant-dollar basis exclude the net premiums written of Fianzas Monterrey
and ABA Seguros acquired in 2013 in order to adjust for the distortive effect
of acquisitions.

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 properly 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.

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 excluding acquisitions is shareholders' equity less
goodwill and other intangible assets. However, the goodwill and other
intangible assets related to the 2013 acquisitions of Fianzas Monterrey and
ABA Seguros are added back in order to adjust for the distortive effect of
acquisitions. Tangible book value per common share excluding acquisitions is
tangible book value excluding acquisitions 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.

NM - not meaningful comparison

Cautionary Statement Regarding Forward-Looking Statements:

Forward-looking statements made in this press release, such as those related
to economic outlook and insurance market conditions, and company performance
including 2014 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.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
                                                     2013          2012
                                                                   
Assets
Investments                                          $  60,928     $   60,264
Cash                                                 579           615
Insurance and reinsurance balances receivable        5,026         4,147
Reinsurance recoverable on losses and loss           11,227        12,078
expenses
Other assets                                         16,750       15,441
      Total assets                                   $  94,510    $   92,545
                                                                   
Liabilities
Unpaid losses and loss expenses                      $  37,443     $   37,946
Unearned premiums                                    7,539         6,864
Other liabilities                                    20,703       20,204
      Total liabilities                              65,685       65,014
                                                                   
Shareholders' equity
      Total shareholders' equity                     28,825       27,531
      Total liabilities and shareholders' equity     $  94,510    $   92,545
                                                                   
Book value per common share                          $  84.83      $   80.90
                                                                
                                                                       


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
                               2013        2012        2013         2012
                                                                    
Gross premiums written         $ 5,462     $ 5,146     $ 22,828     $ 21,593
Net premiums written           4,216       3,657       17,025       16,075
Net premiums earned            4,363       3,848       16,613       15,677
Losses and loss expenses       2,517       2,683       9,348        9,653
Policy benefits                136         142         515          521
Policy acquisition costs       702         636         2,659        2,446
Administrative expenses        570        553        2,211       2,096    
Underwriting income (loss)     438         (166    )   1,880        961
                                                                    
Net investment income          557         567         2,144        2,181
Net realized gains (losses)    154         272         504          78
Interest expense               70          63          275          250
Other income (expense):
    Gains (losses) from        9           11          16           29
    separate account assets
    Other                      (2      )   9           (31      )   (23      )
Income tax expense (benefit)   88         (135    )   480         270      
Net income                     $ 998      $ 765      $ 3,758     $ 2,706  
                                                                    
Diluted earnings per share:
Operating income               $ 2.39      $ 1.43      $ 9.35       $ 7.65
Net income                     $ 2.90      $ 2.22      $ 10.92      $ 7.89
                                                                    
Weighted average diluted       344.2       343.7       344.1        342.7
shares outstanding
                                                                    
Loss and loss expense ratio    61.3    %   75.5    %   59.6     %   65.7     %
Policy acquisition cost        15.6    %   16.2    %   15.7     %   15.3     %
ratio
Administrative expense ratio   12.4    %   13.8    %   12.7     %   12.9     %
Combined ratio                 89.3    %   105.5   %   88.0     %   93.9     %
                                                                 
                                                                             


ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
                                                            
                                                               
                               Three Months Ended      Year Ended
                               December 31             December 31
                               2013        2012        2013         2012
                                                                    
Gross Premiums Written
                                                                    
Insurance – North American     $ 2,439     $ 2,236     $ 8,720      $ 8,120
P&C
Insurance – North American     217         292         2,661        2,621
Agriculture
Insurance – Overseas General   2,126       1,925       8,314        7,702
Global Reinsurance             154         149         1,057        1,070
Life                           526        544        2,076       2,080    
Total                          $ 5,462    $ 5,146    $ 22,828    $ 21,593 
                                                                    
Net Premiums Written
                                                                    
Insurance – North American     $ 1,602     $ 1,434     $ 5,915      $ 5,349
P&C
Insurance – North American     256         84          1,627        1,859
Agriculture
Insurance – Overseas General   1,699       1,476       6,520        5,863
Global Reinsurance             155         146         991          1,025
Life                           504        517        1,972       1,979    
Total                          $ 4,216    $ 3,657    $ 17,025    $ 16,075 
                                                                    
Net Premiums Earned
                                                                    
Insurance – North American     $ 1,511     $ 1,345     $ 5,721      $ 5,147
P&C
Insurance – North American     426         263         1,678        1,872
Agriculture
Insurance – Overseas General   1,700       1,497       6,333        5,740
Global Reinsurance             245         254         976          1,002
Life                           481        489        1,905       1,916    
Total                          $ 4,363    $ 3,848    $ 16,613    $ 15,677 
                                                                    
Operating Income (loss)
                                                                    
Insurance – North American     $ 402       $ 171       $ 1,446      $ 1,100
P&C
Insurance – North American     (20     )   (1      )   63           (38      )
Agriculture
Insurance – Overseas General   279         246         1,094        994
Global Reinsurance             145         74          576          499
Life                           86          74          307          324
Corporate                      (68     )   (72     )   (269     )   (255     )
Total                          $ 824      $ 492      $ 3,217     $ 2,624  
                                                             
                                                                             

Contact:

ACE Limited
Investor Contact:
Helen M. Wilson, 441-299-9283
helen.wilson@acegroup.com
or
Media Contact:
Arnella J. Forde, 212-703-7066
arnella.forde@acegroup.com
 
Press spacebar to pause and continue. Press esc to stop.