for the first six months of fiscal 1992 -- a drop of 17 percent compared with the same period the year before.

Written premiums increased by 25 percent to $160.4 million over the six months to March 31, 1992, and net earned premiums were up by 11.5 percent to $128.3 million.

Mr. Walter Scott, chairman and CEO, put the improved premium income down to an increase in new accounts and higher charges for excess liability coverage, which ACE offers up to $200 million.

"ACE has added 18 new excess liability accounts and 12 directors' and officers' liability accounts in the first six months of 1992,'' he added.

"New policyholders have included our first Spanish account as well as three new Scandinavian based risks.

"In March alone there were six new excess liability policies written covering a broad spectrum of industrial operations.'' Mr. Scott forecast that this trend would continue for the rest of the year, largely because of a contraction in excess liability coverage available in other markets.

"This reduction in capacity, while most dramatic in the energy-related industries, has had repercussions throughout the insurance buying world,'' he said.

"Concern over general stability and the financial security of some insurance markets compounds the effect of the loss of capacity. These factors, in addition to our increased marketing efforts, have impacted ACE favourably.'' ACE's premium growth was offset by increased strengthening of loss reserves and a reduction in investment returns compared with 1991, when levels were "unusually high'', said Mr. Scott.

Loss reserves were increased by $109 million, bringing the total provision for claims and claim expenses at March 31 to $443 million.

ACE made a net underwriting profit of $5.3 million, down by 77 percent.

Since ACE was formed in 1985, it has paid over $200 million in claims and claims expenses, but Mr. Scott said: "There is a continuing trend of adverse development in respect of claims notified in those prior years.

"We've also seen the emergence of greater frequency of claims with the potential severity to penetrate ACE's attachment point.

ACE's shareholders' equity increased by $99 million to $1.175 billion over the six months and its total investments exceeded $1.8 billion at March 31.

ACE is the world's principal provider of high level excess liability and directors' and officers' coverage, up to limits of $200 million and $50 million, respectively.

ACE LTD.

1992 six-month results Total income $222.6m Total expenses $133.2m Net income $89.4m Premiums written $160.4m Assets $1.8b Liabilities $668m.