ACE Ltd. Sees 59 Pct. Income Loss

The company reported net premiums written for the quarter rose 83 percent, climbing to $1.9 billion for 2001 compared to $1 billion for 2000. Net premiums earned rose 62 percent to $1.8 billion for 2001 compared to $1.1 billion for the fourth quarter of 2000.

ACE's chairman and chief executive officer Brian Duperreault said during a financial analyst's conference call today that despite the losses, the company is in good financial position and he is optimistic about its future as rates continue to harden. He, and other executives, said they expected rates to continue to harden well into the future.

Losses the company suffered related to the terrorist attacks of Sept. 11 contributed to a loss ratio of 111.6 percent, the highest the company has had since its inception, said Mr. Duperreault.

"This constituted a trial by fire for us," remarked Mr. Duperreault. "We incurred the largest loss ever and survived."

The rate rises, he said, are unique in that they are across the board and driven by the primary insurers need for increases. Mr. Duperreault said the momentum for continued hardening would continue.

When asked about ACE's underwriting of terrorism, company executives said in direct insurance their underwriting covers workers' compensation and some property with very specific risk.

On the reinsurance side, the company is excluding events that could occur over a large geographic area from a nuclear, biological or chemical terrorism attack. The company is providing limited insurance for terrorism under strict underwriting standards, executives said.