ACE Limited said Friday it expects third-quarter operatingincome of between $1.44 and $1.48 per share and a decrease in bookvalue per share of 7.5 percent year-to-date.

The company announced the estimates ahead of its scheduled Oct.28 third-quarter earnings release because of "the extraordinarymarket conditions and questions of investor confidence" forfinancial institutions in general.

A company statement said the company experienced some lossesthat resulted from an increase in the fair market value ofliabilities related to annuities, but "This does not present anyliquidity exposures. Cash flow in this business is positive and iswithin our original expectations."

The company said it expects operating cash flow to be in therange of $800 million to $1 billion for the third quarter.

ACE noted that as of Sept. 30, it has entered into securitieslending agreements approximating $2 billion. The proceeds, ACEsaid, are invested in prime short-term money market funds.

ACE also re-emphasized that it did not and does not invest inCDOs, CLOs or complex credit structures and does not employleverage, and therefore has no transactions that require theposting of collateral.

Evan G. Greenberg, ACE Limited chairman and chief executiveofficer, said "the company's financial performance and balancesheet remain strong. ACE has a strong capital position and ourfinancial results for the third quarter were quite good. ACE iswell positioned to take advantage of weaknesses and opportunitieswithin our industry as they emerge."