ACE Limited said Friday it expects third-quarter operating income of between $1.44 and $1.48 per share and a decrease in book value 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 extraordinary market conditions and questions of investor confidence" for financial institutions in general.
A company statement said the company experienced some losses that resulted from an increase in the fair market value of liabilities related to annuities, but "This does not present any liquidity exposures. Cash flow in this business is positive and is within our original expectations."
The company said it expects operating cash flow to be in the range of $800 million to $1 billion for the third quarter.
ACE noted that as of Sept. 30, it has entered into securities lending agreements approximating $2 billion. The proceeds, ACE said, are invested in prime short-term money market funds.
ACE also re-emphasized that it did not and does not invest in CDOs, CLOs or complex credit structures and does not employ leverage, and therefore has no transactions that require the posting of collateral.
Evan G. Greenberg, ACE Limited chairman and chief executive officer, said "the company's financial performance and balance sheet remain strong. ACE has a strong capital position and our financial results for the third quarter were quite good. ACE is well positioned to take advantage of weaknesses and opportunities within our industry as they emerge."
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