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Ace's profits fall 54% to $1.2bn
03 February 2009
Ace's net income for 2008 has fallen 54% to $1.2bn from $2.6bn in 2007.
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Ace's net income for 2008 has fallen 54% to $1.2bn from $2.6bn in 2007. The full-year figures were affected by fourth-quarter results that saw profits fall to $20m from $572m in the fourth quarter of 2007.
Net investment income was marginally up for the year, to $2.1bn in 2008 from $1.9bn in 2007. Despite hurricanes Gustav and Ike, Ace's property/casualty combined ratio for the year was 89.6%, up from 87.9 in 2007.
Evan Greenberg, chairman and chief executive officer of Ace, said: "Ace produced strong operating results in one of the most difficult quarters in modern history for financial services companies."
He added: "Net income suffered from other-than-temporary-impairment losses related mostly to interest rate spreads in the period. Book value, which declined 6% in the quarter and 10% for the year, was impacted by realised and unrealised investment losses, extreme foreign exchange fluctuation and a loss from a fair value increase in the liabilities associated with our life reinsurance business. We believe most of the losses in the portfolio and life reinsurance business will recover in value over time. Even with this year's decline, our book value has grown at a compound annual growth rate of 12% the last five years."