ACE Group reports 5% increase in global p&c net premiums for Q1

ACE Group, one of the world’s largest multiline property and casualty insurers, has reported a p&c combined ratio of 88.4% and operating return on equity of 10.8% for Q1.

ACE Group said in a statement on Tuesday that global p&c net premiums (excluding agriculture), were up 5% in constant dollars. The company also reported a p&c underwriting income of US$402 million, up 7.8% and a net investment income of US$551 million.

Net income for the quarter ended March 31 was $2.05 per share, compared with $2.14 per share for the same quarter last year. Operating income was $2.25 per share, compared with $2.27 per share for the same quarter last year.

“ACE’s first quarter earnings per share were essentially flat with prior year – a good result for a global, dollar-based insurer,” said Evan G. Greenberg, chairman and CEO of ACE Limited, in the statement. “Our earnings benefitted from excellent underwriting and investment income results, highlighted by a P&C combined ratio of 88.4% and investment income that was flat with prior year. We obviously have the headwinds of foreign exchange, an underwriting environment that continues to grow more competitive for our commercial P&C businesses, as well as low interest rates.” [click image below to enlarge]

Highlights for Q1 include:

• P&C net premiums earned increased 3.5% and global P&C net premiums earned increased 4.8% in constant dollars;

• The P&C expense ratio was 31.3%, compared with 31.1% last year. The global P&C expense ratio, which excludes agriculture, was 32.0% compared with 31.9% last year;

• Total pre-tax and after-tax catastrophe losses including reinstatement premiums were US $51 million (1.5 percentage points of the combined ratio) and US $40 million, respectively, compared with US $53 million (1.5 percentage points of the combined ratio) and US $43 million, respectively, last year;

• Favourable prior period development pre-tax and after-tax were US$83 million (2.4 percentage points of the combined ratio) and US$67 million, respectively, compared with US$62 million (1.6 percentage points of the combined ratio) and US$63 million, respectively, last year;

• Net loss reserves decreased $112 million in the quarter after adjusting for foreign exchange;

• Net investment income was US$551 million compared with US$553 million last year. This quarter was negatively impacted by foreign currency movement of US$7 million; and

• Operating return on equity was 10.8%. Return on equity computed using net income was 9.2%. [click image below to enlarge]

Details of financial results by business segment are available in the ACE Limited Financial Supplement. Key North American (excluding agriculture) segment items for the quarter ended March 31, 2015, include:

• Insurance – North American P&C: Net premiums written increased 0.8%. The combined ratio was 89.6% compared with 84.7%. The current accident year combined ratio excluding catastrophe losses was 87.9% compared with 87.1%. The prior year underwriting income was favorably impacted by two items that did not repeat totalling US$25 million (US$18 million after-tax), which includes US$16 million (US$12 million after-tax) due to lower excess of loss premiums ceded under the company’s 2014 catastrophe reinsurance program and a US$9 million (US$6 million after-tax) favourable settlement related to prior year state premium assessments. Excluding the impact of these items, the current accident year combined ratio excluding catastrophe losses was 87.9% compared with 88.5%.