Despite reporting an “excellent” quarter, ACE Ltd. is not immune to market forces and has been changing its mix of business to counter the effect of slowing or lowering prices in many sectors, according to Evan Greenberg.

Mr. Greenberg, 49, who will next month take over as chief executive officer from Brian Duperreault at the Bermuda insurance giant, yesterday faced his first conference call and quizzing by analysts on the company's finances.

Following the call yesterday he told The Royal Gazette that while ACE had seen good growth over most sectors, a quick look at the 2003 figures for the first quarter revealed that premium growth was much stronger a year ago. “We are part of the market and we are not immune to market forces,” he said.

On Tuesday ACE reported its profits for the first quarter of 2004 rose by 81 percent to $447 million after good growth in almost all business segments.

The company, which has its global headquarters on Bermudiana Road, reported net income of $247 million for the first quarter of 2003.

The world's insurance markets have been softening, with prices either not rising as steeply or prices reducing following a cycle of “hard” market which started towards the end of 2001 and continued until last year, when the cost of insurance increases started to slow.

During the conference call Mr. Greenberg was asked about property and casualty rates, and he said in most classes rates were “adequate” in both short and long tail.

“Property rates are flat to down 20 percent. This varies by territory, by class, by size of risk. Casualty rates overall continue to firm - albeit at a slower pace - about eight to ten percent,” said Mr. Greenberg.

“Again, this varies by territory, by class and by size of risk. Terms and conditions for the most part remain firm.”

He went on to say that as rate increases slow and in some classes drop, ACE's underwriters will become more selective in the risk they choose to write.

Mr. Greenberg added: “However, due to our geographic and product expansion, submission activity is way up and is helping to counterbalance our need to be more selective.''

Property and casualty sales in North America rose 26 percent to $2.4 billion. The company added casualty insurance products and the “vast majority'' of the growth came from new business as opposed to price increases on policies being renewed, he said.

“In the quarter, the majority of our growth came from a broad portfolio of lead casualty and specialty related lines,” he said. “The commercial buyers of insurance and the brokers active in this area want and need more choice.

“The number of major multi-line global and in fact national commercial P&C players willing to take on risk is very small. We're filling that vacuum and the market is responding favourably.”

On increased demand for better service and new products he said that ACE was emerging as a company with greater capability and is therefore taking advantage of that. “I think clients have learned from the past that price isn't everything and you better be really careful about balance sheet strength,” he said.

On the effects of heightened competition on the prices for corporate directors and officers coverage he said that so-called “excess”' coverage can be tapped only if a claim has already exhausted the primary, or first, layer of coverage.

Mr. Greenberg said: “We're making great efforts in increasing our presence in the lead primary lines, which is that first $100 million of capacity, so I'll distinguish between that and what I'll call the high excess, which plays typically above that.”

Mr. Duperreault is shortly due to hand over the helm to Mr. Greenberg, on May 27. Mr. Greenberg is the son of Maurice (Hank) Greenberg, American International Group Inc, chief executive officer.