ACE Ltd reported a marginal increase in its net income of nine percent third quarter results from the same time last year.

But the figure was higher than it would normally have been after the company reported much lower non-recurring expenses than last year -- down from $40.9 million last year to $3.9 million this year.

The company's income excluding losses and non-recurring expenses was $72.5 million, down a third on the same time last year from $108.9 million.

"Together with the rest of the insurance industry, ACE incurred losses resulting from a large number of catastrophic events in the third quarter,'' said Brian Duperreault, chairman, president and chief executive officer of ACE.

"As previously announced, the effect on our net operating income for the quarter from catastrophic events was approximately $34.0 million after taxes.

In addition, ACE recognised $3.9 million in one-time charges related to the acquisition of ACE INA. Excluding these events, income excluding net realised gains (losses) for the quarter, would have been $0.54 per share.'' The reported income excluding net realised gains (losses) and non-recurring expenses for the fiscal 1999 third quarter ended September 30 work out at $0.37 per share, compared to $0.55 per share for the same quarter in fiscal 1998.

Net income in shares was $0.08 compared with $0.07 per share, for the same quarter last year.

These earnings per share calculations are based on the weighted average number of shares. The fully diluted book value per share of the company at September 30, 1999 was $19.72.

On July 2, 1999, ACE completed the acquisition of the international and U.S.

property and casualty businesses of CIGNA Corporation (ACE INA), so the released financial results include the results of ACE INA from the date of acquisition.

Mr. Duperreault said: "We are pleased to include the results of the ACE INA Group for the first time. We are extremely satisfied with the positive changes that have taken place at ACE INA in the first three months and pleased that they have already contributed to the results of the ACE Group.'' Gross premiums written during the quarter increased by 387.1 percent to $1.5 billion, compared with $317.0 million for the comparable quarter last year.

ACE income rises Net premiums written during the quarter increased 414.8 percent to $910.9 million compared with $177.0 million for the same quarter last year. Net premiums earned during the quarter were up 330.2 percent to $952.9 million from $221.5 million in the same quarter last year.

Gross premiums written for the nine months of fiscal 1999 were $2.5 billion compared to $1.0 billion for the same period last year, an increase of 140.5 percent.

For the nine months of fiscal 1999, net premiums written increased 125.1 percent to $1.6 billion compared to $730.1 million for the nine months of fiscal 1998.

Net premiums earned for the nine months ended September 30, 1999 were $1.5 billion compared with $691.3 million for the same period last year, a 122.6 percent increase. Net investment income, excluding losses, was $163.1 million for the fiscal 1999 third quarter, compared with $89.3 million for the same period last year, an 82.6 percent increase.

For the nine months of fiscal 1999, net investment income, excluding losses was $334.3 million compared with $260.6 million for the same period last year.

During the fiscal 1999 third quarter, ACE had net realised losses of $53.8 million compared with net realised losses of $54.2 million for the same quarter last year. For the nine months ended September 30, 1999, net realised losses were $11.2 million, compared with net realised gains of $160.9 million for the first three quarters of fiscal 1998.

The ACE Group of Companies is based in Bermuda and provides insurance and reinsurance in over 50 countries.

Brian Duperreault