Standard & Poor's has affirmed the A+ financial strength rating on Ace Ltd. s core operating companies and their A- counterparty credit rating.

The agency's announcement on Friday came after the Zurich-based insurer, which has offices in Bermuda, announced estimates for third-quarter losses relating to hurricanes Gustav and Ike and a decline in the value of its investment portfolio.

The outlook on all ratings is stable.

"The affirmations followed Ace's recent announcement that it expects to report lower operating income and that its net realised and unrealised losses will total approximately $1.5 billion during the third quarter of 2008," said Standard & Poor's credit analyst Laline Carvalho.

"This should result in a year-to-date decrease in book value per share."

The S&P commentary, released on Friday, said Ace's third-quarter results would be lower than the agency's original expectation, but "reasonable given the higher catastrophe losses incurred by the insurance and reinsurance sectors during the quarter—particularly because of Hurricanes Gustav and Ike—and significant volatility in the capital markets in recent months".

The ratings on Ace are based on the group's very strong competitive position as a global and diversified property/casualty group, S&P said, and its strong financial flexibility, capitalisation, and operating performance.

S&P said negative factors were Ace's changing and increasing risk profile into new lines and geographic locations, high reinsurance utilisation in certain lines, and high amounts of recoverables, run-off reserves, and intangibles — although for the companies collectively, these risks are decreasing.