"Unfavourable foreign currency" drives down profits at ACE

Insurance firm ACE, which has operations in Bermuda, has seen a large fall in its profits for the third quarter of 2015.

The firm posted a net income of $528 million in the quarter compared with $785 million in the third quarter of 2014, driven by unfavourable foreign currency.

However the ACE posted record results for after-tax operating income, at $897 million for the quarter, as well as a record property and casualty (P&C) underwriting income, at $597 million.

Gross written premiums (GWP) for the quarter were $6,346, compared with $6,264 for Q3 2014, whilst the firm's combined ratio increased to 85.9 percent for the quarter, compared with 86.3 percent in the same time period for 2014.

Evan Greenberg, chairman and chief executive officer, ACE, said: “ACE had a great quarter. Volatility in the credit, equity and foreign exchange markets impacted our results but did not prevent us from producing record earnings, record underwriting results and good revenue growth in constant dollars. After-tax operating income was $897 million, or $2.74 per share, leading to an operating return on investment (ROE) of about 13 percent.

“Our earnings growth was driven by a world-class underwriting performance, highlighted by record underwriting income and a P&C combined ratio of 85.9 percent. We benefited from very strong current underwriting year results, positive development in our reserves and relatively low catastrophe losses. Year to date, even with foreign exchange headwinds, we’ve produced over $2.4 billion in operating income, which is essentially flat with prior year.”

Greenberg also said ACE is on track to close its acquisition of Chubb in the first quarter of 2016.