Ace Ltd. says it reversed a third-quarter loss a year ago by turning a profit of $640 million during the same period this year, despite booking a $97 million after-tax loss in its crop insurance segment.
Overcoming the losses caused by the massive drought in the Midwest U.S. were lower catastrophe losses and an increase in net premiums.
Third-quarter catastrophe losses were $41 million after-tax, compared to $86 million during the same time a year ago.
Total company net premiums increased 8.6 percent quarter-to-quarter. CEO Evan Greenberg says premium growth in the third quarter was the strongest of the year.
“We continue to benefit from the favorable P&C pricing trend in North America, where we recorded strong double-digit premium growth, and internationally, excluding the impact of foreign exchange, we also registered good growth across a broad spectrum of property and casualty, accident and health, and personal lines business—particularly in Asia and Latin America,” Greenberg says in a statement.
An uptick in net premiums and a decrease in catastrophe losses also balanced a 5.6 percent decrease in third-quarter net investment income to $533 million.
Additionally, Ace reported favorable prior-year reserve development of $236 million in the third quarter, compared to $194 million in 2011’s third quarter.
The favorable development represented 5.7 points of Ace’s combined ratio of 92, compared to 90.2 a year ago during the same period.
The subtracted points to the company’s total combined ratio from favorable reserve development helped to overcome a 7.4-point addition to the ratio caused by the crop losses.
Ace says the combined ratio for crop insurance was 114 in the third quarter and it is expected to be about 104 for the year.