ACE Limited (ACE) Tops Q4 EPS by 24c

ACE Limited (NYSE: ACE) reported Q4 operating EPS of $2.47, $0.24 better than the analyst estimate of $2.23.

“Our P&C combined ratio was 88.5% for the quarter and 87.7% for the year with fourth quarter and full-year underwriting income both up over 7%. Our excellent underwriting results were driven by a particularly strong current accident year performance, which reflects the fundamental strength of our current year business. Current accident year underwriting income excluding catastrophes was up 23% for the quarter and 13% for the year.

“Net investment income was a record $577 million in the quarter and $2.3 billion for the year, up more than 5%. We benefited from strong operating cash flow and achieved an exceptional result given the historically low interest rate environment.

“For the quarter and year, global P&C net premiums written grew about 6% and 7%, respectively, on a constant-dollar basis with the strong dollar negatively impacting growth by about 2.8 percentage points in the quarter and 1.2 percentage points for the year. Per share book value declined modestly in the quarter and grew 6.1% for the year with foreign exchange negatively impacting book value by $596 million in the quarter and $747 million for the year. Excluding foreign currency movement, book value per share grew 8.8% for the year. There has been a rapid investor flight to the dollar in search of safety, driven by the decline in oil prices, economic uncertainty in many countries and regions, and geopolitical tensions. ACE is a truly global multinational insurer, and we are dollar-based. Our diversified presence, product and customer capabilities, and distribution focus in 54 countries are a unique source of earnings strength that enables us to take advantage of so many opportunities around the globe over time.

“In the quarter, we closed our acquisition of the large corporate P&C business of Brazil’s Itaú Seguros and announced our intention to purchase the U.S. high net worth personal lines business of Fireman’s Fund. These are just two of many investments we made last year in the future of our company that will strengthen our presence and capabilities and increase our ability to produce sustainable outperformance. We are off to a good start in January and we remain confident in our strategy and are relentless in our drive to execute with excellence.”

For earnings history and earnings-related data on ACE Limited (ACE) click here.

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