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ACE achieved strong second quarter results, increasing net premiums written, its underwriting income and driving down its combined ratio.
During the second quarter of 2014 ACE increased net premiums written by 4 percent, up from $3,904 million in 2013 to $4,061 million in 2014. It also improved its underwriting income by 10.3 percent to $478 million.
The company was also able to marginally strengthen its combined ratio, down from 87.9 percent in 2013 to 87.5 percent in 2014.
Its insurance business fared particularly well, with North American P&C and international general writing 6.9 percent and 8 percent more business than the same period last year.
Its North American agricultural business performed less well, decreasing premiums written by 14.2 percent in the face of declining commodity prices.
ACE’s global reinsurance segment also faced tough conditions, decreasing premiums written by 4.9 percent, with its combined ratio rising from 62.2 percent in 2013 to 69.9 percent in 2014.
ACE was also able to improve its investment income by 4 percent – no mean feat in the current macroeconomic environment.
ACE also highlighted recent global acquisitions that it hopes will deliver access to high-growth markets and levers of future growth.
Commenting on the results, Evan Greenberg, chairman and CEO of ACE said: “ACE’s excellent second quarter results were marked by strong earnings, very good premium revenue growth globally and continued expansion of our business in the majority of markets in which we operate – both developed and developing. After-tax operating income of $825 million was driven by strong growth in underwriting and good investment income results, which together produced an operating ROE of about 12%. Per share book value increased nearly 4% in the quarter and over 6% for the year.”
“This premium growth was well distributed across the company by territory, product line and customer segment with double-digit contributions from Asia and Latin America and solid single-digit growth in North America and the continent of Europe. Our ability to generate sustained premium revenue growth reflects our deepening presence and capabilities in important long-term growth markets of the world. In two of these, Thailand and Brazil, we either completed or announced acquisitions in the quarter that meaningfully advance our company strategically. With the addition of Samaggi Insurance, ACE is now the largest foreign-owned P&C insurer in Thailand. Similarly, the combination of our existing business in Brazil and Itaú Seguros’s corporate P&C business, which we plan to acquire early next year, will make ACE the largest commercial P&C insurer in that country.”
ACE, results, insurance, reinsurance, Bermuda