Ace posts higher 3Q profit on higher underwriting

Ace posts higher third-quarter profit on decline in payouts, jump in underwriting

• By The Associated Press
• On 8:22 pm EDT, Tuesday October 27, 2009

Property and casualty insurer ACE Limited posted a larger third-quarter profit Tuesday on stronger underwriting income and fewer payouts related to catastrophes.

For the three months ended Sept. 30, the company earned $494 million, or $1.46 per share. That compared with income of $54 million, or 16 cents per share, in the year-ago period.

Excluding certain items, profit in the latest quarter totaled $2.07 per share, easily beating the average $1.75-per share estimate of analysts polled by Thomson Reuters.

Ace, based in Zurich, Switzerland, said payouts from catastrophes dropped to $45 million for the quarter, compared with $411 million in the year-ago period which included hefty hurricane damage. Meanwhile, underwriting income rose to $411 million, compared to $111 million the same time last year.

The company's book value is now $55.71 per share, which is up 13 percent from the previous quarter and marks a new high for the company.

Net premiums written and earned decreased 4 percent and 6 percent, respectively. The company said growth in premium revenue was impacted by recessionary conditions, a stronger U.S. dollar and a competitive insurance market.

Net investment income decreased 2 percent to $511 million.

Shares of Ace advanced $1.48 to $54.75 in after-hours trading, after slipping 16 cents to close the regular session at $53.27.

(This version CORRECTS the adjusted profit comparison with analysts' consensus estimate in third graf to show a beat, not a miss.)

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