29 January 2014 Insurance

Low cat losses help ACE post record profits

A combination of low catastrophe losses and disciplined underwriting combined to help ACE post a record income for the business.

The company made a net profit of $3.7 billion in 2013, compared with $2.7 billion the year before, a 38.9 percent increase. Its operating profit was $3.2 billion compared with $2.6 billion in the same period the year before.

Partly driven by low catastrophe losses last year, the company’s property/casualty business enjoyed a healthy combined ratio of 88 percent for the year compared with 93.9 percent the year before. On a current accident year basis excluding catastrophe losses, the P&C combined ratio was 90 percent for the year, almost three points better than 2012.

The company’s property/casualty business’s net premiums written for the year were $15 billion, a 6.8 percent increase on the year before.

Evan Greenberg, chairman and chief executive of ACE, said the company’s performance was driven by strong growth and disciplined underwriting.

“Our results were driven by very strong premium revenue growth globally and an exceptional underwriting performance,” he said. “Put simply, we are growing while achieving good margins – it’s about growth in areas where prices are attractive and securing improved terms including rate in areas where they’re not.”

He added: “Of course, like the rest of the industry, we benefited from light catastrophe losses during the year. In addition, we run our balance sheet prudently starting with our loss reserves, and as a consequence we also benefited from positive prior year reserve development.”

He also said that he was positive about the company’s prospects for 2014. “We are off to a great start in January, and remembering we are in a risk business, I expect we will have a good year in 2014 as we continue to take advantage of the many growth opportunities we see around the globe including the US.”

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