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Member, Beacon International Group, Ltd.
HAMILTON, Bermuda--A difficult equities market and European flood losses offset significant premium growth to leave ACE Ltd. with a third-quarter loss.
The Bermuda-based insurer recorded a loss of $57 million for the quarter, a significantly smaller loss than the $442 million loss the company recorded for the same quarter last year. At the same time, gross premiums written during the recently ended quarter surged by 41%, to $3.5 billion. Net premiums rose 70%, to $2.2 billion.
"It's like 'A Tale of Two Cities' in the industry," said Brian Duperreault, chairman and chief executive officer of ACE. While the insurer saw "tremendous growth in premiums" and cash flow in excess of $1 billion for the third quarter, he noted, "on the other side, the equity market continued to be very difficult." Falling interest rates were another factor, according to Mr. Duperreault.
ACE showed a slight increase in investment income, which reached $199 million for the quarter, compared to $192 million last year.
"It's difficult to compare this quarter with last year," because losses from the terrorist attacks affected the 2001 results, Mr. Duperreault said. But he added that there were catastrophe losses this year as well, mainly from floods in Europe.
ACE's operating income rose to $158 million for the quarter, compared with a loss of $390 million last year.