ACE is one of the world's largest providers of commercial property and casualty insurance and reinsurance – insurance is our only business.
ACE has a physical presence in 53 countries, with more than 16,000 employees serving the insurance needs of customers in more than 170 countries.
FINANCIAL STRENGTH RATINGS
S&P: AA- (Very Strong); A.M. Best: A+ (Superior)
KEY FINANCIAL MEASURES
Financial Summary
(in millions of US dollars, except ratios)
Gross written premiums
Net written premiums
Operating income*
Net income
Net investment income
Operating cash flow
Combined ratio
Annualized ROE*
*Excludes net realized gains (losses)
Q4 2011
$4,864
3,630
663
750
565
472
92.9%
11.8%
Q4 2010
$4,565
3,422
702
1,001
532
771
90.3%
13.2%
Balance Sheet & Liquidity (as of 12/31/11)
Net loss reserves — $25.1 billion
Tangible capital — $24.6 billion
Net loss reserves and tangible capital of nearly $50 billion represent ACE’s strong ability to pay claims
Total capital — $29.4 billion
Defines an insurance company’s ability to take risk
ACE's capital has more than doubled since 2005
Debt to capital ratio — 15.7%
ACE’s ratio is conservative for our capital position
Book value — $24.5 billion
Book value has grown $1.5 billion or 7% since 12/31/10
Invested assets — $55.7 billion
Invested assets have grown $4.3 billion or 8% since 12/31/10
RISK MANAGEMENT
Managing Asset Risk
$55.7 Billion Conservative Investment Portfolio
- Predominantly investment grade fixed income and broadly diversified across geographies, sectors and issuers
- Average credit rating is A/Aa; average duration is less than 4 years
- ACE does not invest in collateralized debt obligations (CDOs) or collateralized loan obligations (CLOs)
- Mortgage-backed securities:
- 95% are AA or AAA rated
- 93% of the RMBS portfolio is backed by federal agencies
Managing Liability Risk
Disciplined Underwriting Culture
- We embrace risk as long as we understand it and can generate an acceptable return
- We manage the company to earn an underwriting profit and ACE has earned a cumulative underwriting profit since its inception in 1985
- Five-year (2007-2011) average combined ratio — 90.3%
- 2011 underwriting income — $1.2 billion
- Loss Reserve transparency — ACE Global Loss Triangles
EXTERNAL PERSPECTIVES
Investment Community
Equity Analyst Ratings as of 12/31/11: 20 buy/3 hold/1 sell
ACE’s Share Price: For the fourth quarter of 2011, ACE’s share price increased 16% compared to the S&P Property & Casualty Insurance Index’s 11% increase and traded between 0.81 and 1.04 times book value
Stock Index Inclusion: ACE Limited is a component of the benchmark S&P 500 and Russell 1000 stock indices of large capitalization companies
Rating Agencies
Financial Strength Ratings (FSRs) of AA- from Standard & Poor’s (S&P) and A+ from A.M. Best on ACE’s core operating insurance companies
Recent Actions: FSRs for Combined Insurance and ACE's Japan and Australia subsidiaries were upgraded by S&P to AA- with designation as ACE core operating companies; FSR for ACE's US P&C companies was raised to A1 by Moody's
ACE’s Enterprise Risk Management rating of “Strong” from S&P is in the top 15% of companies rated
The information contained in the ACE Group Profile is a summary, and is provided only for informational purposes. This ACE Group Profile does not constitute legal, financial or investment advice. The ACE Group, headed by ACE Limited (NYSE: ACE), through its underwriting and service companies, provides insurance products and services for a diverse group of clients around the world.
12/31/11
