an operating income of $140.1 million for the quarter ended June 30, more than tripling last year's figure of $43.8 million. ACE beat analysts' expectations by a penny with operating earnings of 61 cents per share for the quarter.

ACE's net income, which includes net realised losses relating to investments, stood at $113.9 million -- still 65 percent above the same quarter of last year. Per share earnings including net realised losses were 49 cents. But investors shied away from ACE shares on the NYSE yesterday, driving the stock price down 1 11/16, or 4.7 percent, to close at $34.25.

The results show that ACE's acquisition of the insurer Cigna's property casualty division, now ACE INA, was financially prudent. When the division was acquired in July of 1999, ACE struggled to find any signs of profit in the company, but has now brought it back into the black.

"As we celebrate the first anniversary of the ACE INA acquisition, the evidence is clear that the transaction and subsequent restructuring efforts have firmly established ACE as a truly global enterprise and significantly enhanced the profit potential of the group,'' said ACE chairman and CEO Brian Duperreault.

"We continue to experience solid growth in top line production and earnings per share.'' Gross premiums written by ACE's divisions during the quarter increased almost four times to $2 billion, compared to $509 million during the same quarter last year.

Net premiums written for the quarter increased more than threefold to $1.2 billion, compared with $392 million for the same quarter last year. Net premiums earned during the quarter increased almost four times to $1.2 billion from $300 million last year.

For the first half of fiscal 2000, gross premiums written were $3.9 billion, compared with $944 million for the same period last year.

Net premiums written during the six months ended June 30 increased to $2.7 billion, compared with $733 million for the first six months of fiscal 1999.

Net premiums earned for the six months were $2.3 billion, compared with $586 million for the same period last year.

ACE reported net investment income, excluding net realised losses, of $181 million, compared with $85 million for the same period last year.

ACE's record results For the first six months of fiscal 2000, investment income stood at $364 million, compared with $171 million in 1999.

But the company's investments also experienced net realised losses of $26 million. Last year, net realised gains stood at $25 million.

In addition to the Cigna acquisition, ACE's strong results have been fuelled by undertakings of ACE Bermuda, including the formation of ACE Financial Solutions International to underwrite on behalf of ACE outside of the United States. Improved market conditions and higher rates, particularly property rates, also drove up ACE Bermuda's earnings.

Hardening and stabilising of the Lloyds market caused ACE to increased its Lloyd's capacity by 21 percent to 725 million, reversing a previous trend to decrease capacity.

The reinsurance subsidiary Tempest Re, acquired in 1996, was unaffected by catastrophes during the quarter. Net operating income was $26 million for the quarter and $53 million for the first half.