ACE Reports Second Quarter Operating Income of $825 Million, up 4.5%, Global P&C Net Premiums up 7% in Constant Dollars; P&C

  ACE Reports Second Quarter Operating Income of $825 Million, up 4.5%, Global
  P&C Net Premiums up 7% in Constant Dollars; P&C Combined Ratio is 87.5% and
  Operating Return on Equity is 11.8%

  *P&C underwriting income up 10%, driven by strong current accident year
    underwriting income excluding catastrophe losses, which was up 12%, and a
    current accident year combined ratio of 88.7%
  *Net investment income of $556 million, up over 4%
  *Operating cash flow of $846 million
  *Book value per share up 3.8%; book value now exceeds $30 billion. Tangible
    book value per share up 3.9% in the quarter and 7% for the year

Business Wire

ZURICH -- July 22, 2014

ACE Limited (NYSE: ACE) today reported net income for the quarter ended June
30, 2014, of $2.28 per share, compared with $2.59 per share for the same
quarter last year^(1). Operating income was $2.42 per share, compared with
$2.29 per share for the same quarter last year. Book value and tangible book
value per share increased 3.8% and 3.9%, respectively, from March 31, 2014.
Book value and tangible book value per share now stand at $90.19 and $73.77,
respectively. Operating return on equity for the quarter was 11.8%. The
property and casualty (P&C) combined ratio for the quarter was 87.5%.

Second Quarter Summary
(in millions, except per share amounts)
(Unaudited)
                                                              
                                                  (Per Share - Diluted)
                   2014    2013   Change       2014     2013    Change
                                                                      
Operating
income, net of     $ 825     $ 790   4.5   %      $ 2.42     $ 2.29   5.7   %
tax
Adjusted net
realized gains     (46   )  101    NM         (0.14  )  0.30    NM    
(losses), net of
tax
Net income         $ 779   $ 891  (12.5 )%    $ 2.28   $ 2.59  (12.0 )%

For the six months ended June 30, 2014, net income was $4.43 per share,
compared with $5.36 per share for 2013. Operating income was $4.69 per share,
compared with $4.46 per share for 2013. Book value increased $1.5 billion, up
5.2% from December 31, 2013, and tangible book value increased almost $1.4
billion, up 5.9%. The P&C combined ratio for the six months ended June 30,
2014, was 88.2%.

Six Months Ended Summary
(in millions, except per share amounts)
(Unaudited)
                                                               
                                                  (Per Share - Diluted)
               2014      2013     Change       2014     2013    Change
                                                                      
Operating
income, net    $ 1,602     $ 1,536   4.3   %      $ 4.69     $ 4.46   5.2   %
of tax
Adjusted net
realized
gains          (89     )  308      NM         (0.26  )  0.90    NM    
(losses),
net of tax
Net income     $ 1,513   $ 1,844  (18.0 )%    $ 4.43   $ 5.36  (17.4 )%

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited,
commented: “ACE’s excellent second quarter results were marked by strong
earnings, very good premium revenue growth globally and continued expansion of
our business in the majority of markets in which we operate – both developed
and developing. After-tax operating income of $825 million was driven by
strong growth in underwriting and good investment income results, which
together produced an operating ROE of about 12%. Per share book value
increased nearly 4% in the quarter and over 6% for the year.

“P&C underwriting income was up 10% with a combined ratio of 87.5%. The growth
in underwriting was driven by current accident year underwriting income before
catastrophe losses, which was up nearly 12% as a result of global P&C net
earned premium growth of 8.5%, as well as margin improvement in our
international business. On the investment side, net investment income was up
over 4% -- a very good result in this environment which benefited from our
strong growth in invested assets.

“P&C net premiums written excluding agriculture were up 7% in constant
dollars. This premium growth was well distributed across the company by
territory, product line and customer segment with double-digit contributions
from Asia and Latin America and solid single-digit growth in North America and
the continent of Europe. Our ability to generate sustained premium revenue
growth reflects our deepening presence and capabilities in important long-term
growth markets of the world. In two of these, Thailand and Brazil, we either
completed or announced acquisitions in the quarter that meaningfully advance
our company strategically. With the addition of Samaggi Insurance, ACE is now
the largest foreign-owned P&C insurer in Thailand. Similarly, the combination
of our existing business in Brazil and Itaú Seguros’s corporate P&C business,
which we plan to acquire early next year, will make ACE the largest commercial
P&C insurer in that country.”

Operating highlights for the quarter ended June 30, 2014, were as follows:

(in millions of U.S. dollars except  2Q            2Q           
for percentages)                      2014          2013          Change 
                                                                             
P&C
Net premiums written                  $    4,061      $    3,904      4.0    %
Net premiums written                                  $    3,885      4.5    %
constant-dollar
Underwriting income                   $    478        $    434        10.3   %
GAAP combined ratio                       87.7  %        87.9  %
Combined ratio                            87.5  %        87.9  %
Current accident year underwriting    $    432        $    387        11.9   %
income excluding catastrophe losses
Current accident year combined            88.7  %        89.2  %
ratio excluding catastrophe losses
                                                                             
Global P&C (excludes Agriculture)
Net premiums written                  $    3,673      $    3,451      6.4    %
Net premiums written                                  $    3,432      7.0    %
constant-dollar
Underwriting income                   $    451        $    399        13.2   %
Combined ratio                            87.1  %        87.7  %
Current accident year underwriting    $    396        $    349        13.8   %
income excluding catastrophe losses
Current accident year combined            88.7  %        89.2  %
ratio excluding catastrophe losses
                                                                             
Agriculture
Net premiums written                  $    388        $    453        (14.2) %
Underwriting income                   $    27         $    35         (22.7) %
Combined ratio                            91.8  %        89.9  %
Current accident year underwriting    $    36         $    38         (5.5)  %
income excluding catastrophe losses
Current accident year combined            89.1  %        89.1  %
ratio excluding catastrophe losses

  *P&C net premiums earned increased 7.1%, or 7.4% on a constant-dollar
    basis. Global P&C net premiums earned increased 8.5%, or 8.8% on a
    constant-dollar basis.
  *The P&C expense ratio for the quarter was 29.3% compared with 29.2% last
    year. The Global P&C expense ratio, which excludes Agriculture, was 31.4%
    compared with 31.7% last year.
  *Total pre-tax and after-tax catastrophe losses including reinstatement
    premiums were $80 million (2.1 percentage points of the combined ratio)
    and $67 million, respectively, compared with $81 million (2.3 percentage
    points of the combined ratio) and $66 million, respectively, last year.
  *Favorable prior period development pre-tax and after-tax for the quarter
    were $126 million (3.3 percentage points of the combined ratio) and $106
    million, respectively, compared with $128 million (3.6 percentage points
    of the combined ratio) and $109 million, respectively, last year.
  *Operating cash flow was $846 million for the quarter.
  *Net loss reserves increased $298 million in the quarter and the net
    paid-to-incurred ratio was 90% for the quarter.
  *Net investment income for the quarter increased 4.2% to $556 million.
  *Net realized and unrealized gains pre-tax totaled $523 million for the
    quarter, which included net realized losses of $45 million and net
    unrealized gains of $568 million.
  *Operating return on equity was 11.8% for the quarter and 11.5%
    year-to-date. Return on equity computed using net income was 10.4% for the
    quarter and 10.2% year-to-date.
  *Share repurchases totaled $237 million, or approximately 2.3 million
    shares, during the quarter. Since the inception of the November 2013 share
    repurchase authorization, the company has repurchased approximately 7.1
    million shares for $699 million through July 21, 2014.
  *Book value per share increased 3.8% to $90.19 from $86.90 at March 31,
    2014, and increased 6.3% from $84.83 at December 31, 2013.
  *Tangible book value per share increased 3.9% to $73.77 from $70.97 at
    March 31, 2014, and increased 7.0% from $68.93 at December 31, 2013.

Details of financial results by business segment are available in the ACE
Limited Financial Supplement. Key segment items for the quarter ended June 30,
2014, include:

  *Insurance - North American P&C: Net premiums written increased 6.9%. The
    combined ratio was 87.1% compared with 87.6%. The current accident year
    combined ratio excluding catastrophe losses was 87.3%, unchanged from last
    year.
  *Insurance - North American Agriculture: Net premiums written decreased
    14.2% driven by lower commodity prices. The combined ratio was 91.8%
    compared with 89.9%. The current accident year combined ratio excluding
    catastrophe losses was 89.1%, unchanged from last year.
  *Insurance - Overseas General: Net premiums written increased 8.0%, or 8.8%
    on a constant-dollar basis. The combined ratio was 87.1% compared with
    88.2%. The current accident year combined ratio excluding catastrophe
    losses was 89.3% compared with 90.5%.
  *Global Reinsurance: Net premiums written decreased 4.9% for the quarter.
    The combined ratio was 69.9% compared with 62.2%. The current accident
    year combined ratio excluding catastrophe losses was 75.4% compared with
    70.0%.
  *Life segment: Operating income was $72 million compared with $76 million.
    Net premiums written and deposits collected, excluding life reinsurance,
    increased 14.2% on a constant-dollar basis. International life net
    premiums written increased 17.9% on a constant-dollar basis.

Please refer to the ACE Limited Financial Supplement, dated June 30, 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 second quarter earnings conference call on Wednesday, July
23, 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 888-318-7470
(within the United States) or 719-325-2490 (international), passcode 5083653.
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, August 6, 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 5083653.

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
from fair value changes 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 changes in the fair value of 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) from
fair value changes 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.

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 company performance, growth opportunities, and the anticipated acquisition
of the large corporate P&C business of Itaú Seguros, S.A., 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, the risk that
the acquisition from Itaú Seguros, S.A. will not close, new theories of
liability, judicial, legislative, regulatory and other governmental
developments, litigation 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. ACE undertakes 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)

                                                               
                                                      June 30      December 31
                                                      2014        2013
                                                                   
Assets
Investments                                           $ 63,620     $   60,928
Cash                                                  594          579
Insurance and reinsurance balances receivable         5,316        5,026
Reinsurance recoverable on losses and loss expenses   10,768       11,227
Other assets                                          17,149      16,750
      Total assets                                    $ 97,447    $   94,510
                                                                   
Liabilities
Unpaid losses and loss expenses                       $ 37,177     $   37,443
Unearned premiums                                     8,296        7,539
Other liabilities                                     21,649      20,703
      Total liabilities                               67,122      65,685
                                                                   
Shareholders' equity
      Total shareholders' equity                      30,325      28,825
      Total liabilities and shareholders' equity      $ 97,447    $   94,510
                                                                   
Book value per common share                           $ 90.19      $   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          Six Months Ended
                         June 30                     June 30
                         2014        2013        2014         2013     
                                                                    
Gross premiums written   $ 6,006       $ 6,030       $ 11,380       $ 10,993
Net premiums written     4,559         4,391         8,744          8,189
Net premiums earned      4,332         4,067         8,302          7,640
Losses and loss          2,388         2,250         4,549          4,176
expenses
Policy benefits          144           110           258            241
Policy acquisition       758           665           1,486          1,279
costs
Administrative           566           564           1,101          1,078
expenses
Net investment income    556           534           1,109          1,065
Net realized gains       (73     )     104           (177     )     310
(losses)
Interest expense         72            73            143            133
Other income
(expense):
Gains (losses) from
separate account         17            (11     )     11             (7       )
assets
Other                    8             (26     )     31             (20      )
Income tax expense       133         115         226          237      
Net income               $ 779       $ 891       $ 1,513      $ 1,844  
                                                                    
Diluted earnings per
share:
Operating income         $ 2.42        $ 2.29        $ 4.69         $ 4.46
Net income               $ 2.28        $ 2.59        $ 4.43         $ 5.36
                                                                    
Weighted average
diluted shares           341.1         344.1         341.6          344.0
outstanding
                                                                    
Loss and loss expense    58.4    %     58.7    %     58.0     %     58.0     %
ratio
Policy acquisition       16.6    %     15.9    %     17.1     %     16.5     %
cost ratio
Administrative expense   12.7    %    13.3    %    13.1     %    13.6     %
ratio
GAAP combined ratio      87.7    %    87.9    %    88.2     %    88.1     %
                                                         
                                                                    
                                                                    
P&C underwriting         $ 478         $ 434         $ 868          $ 798
income

ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
                                                         
                                                             
                         Three Months Ended          Six Months Ended
                         June 30                     June 30
                         2014        2013        2014         2013     
                                                                    
Gross Premiums Written
                                                                    
Insurance – North        $ 2,347       $ 2,327       $ 4,371        $ 4,146
American P&C
Insurance – North        601           749           835            998
American Agriculture
Insurance – Overseas     2,224         2,097         4,485          4,170
General
Global Reinsurance       308           345           641            639
Life                     526         512         1,048        1,040    
Total                    $ 6,006     $ 6,030     $ 11,380     $ 10,993 
                                                                    
Net Premiums Written
                                                                    
Insurance – North        $ 1,635       $ 1,529       $ 3,053        $ 2,813
American P&C
Insurance – North        388           453           582            566
American Agriculture
Insurance – Overseas     1,760         1,630         3,531          3,250
General
Global Reinsurance       278           292           586            571
Life                     498         487         992          989      
Total                    $ 4,559     $ 4,391     $ 8,744      $ 8,189  
                                                                    
Net Premiums Earned
                                                                    
Insurance – North        $ 1,542       $ 1,428       $ 3,029        $ 2,766
American P&C
Insurance – North        330           351           433            403
American Agriculture
Insurance – Overseas     1,709         1,563         3,321          3,022
General
Global Reinsurance       261           245           545            492
Life                     490         480         974          957      
Total                    $ 4,332     $ 4,067     $ 8,302      $ 7,640  
                                                                    
Operating Income
(loss)
                                                                    
Insurance – North        $ 378         $ 341         $ 789          $ 702
American P&C
Insurance – North        19            26            (6       )     33
American Agriculture
Insurance – Overseas     282           256           521            495
General
Global Reinsurance       146           156           290            300
Life                     72            76            149            146
Corporate                (72     )    (65     )    (141     )    (140     )
Total                    $ 825       $ 790       $ 1,602      $ 1,536  
                                                          

Contact:

ACE Limited
Investor Contact:
Helen M. Wilson, 441-299-9283
helen.wilson@acegroup.com
or
Media Contact:
Jeffrey Zack, 212-827-4444
jeffrey.zack@acegroup.com
 
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