Investors reacted enthusiastically to ACE Ltd.'s quarter and year end earnings, pushing the stock up approximately $3 or seven percent to $43 in trading on the New York Stock Exchange yesterday.

The company's astronomical 65 percent growth in premium provided the boost, along with yesterday morning's conference call with ACE chairman and CEO Brian Duperreault, who said the company was poised for its best year ever in 2002.

Though affected by the terrorist attacks of September 11 and the Enron bankruptcy scandal, the company yesterday reported a $41.9 million profit in the fourth quarter ending December 31, compared with $164.3 million profit in the same quarter last year, and a net loss for the year of $146.4 million compared to net income of $543 million in 2000.

“In spite of the losses incurred during the year, we ended 2001 in a stronger financial position than we began,” said Mr. Duperreault. “Our surplus was at its highest level ever, providing us with the capital resources we need to meet increased customer demand.”

Earnings per share excluding net realised gains, after deducting preferred dividends, were $0.14 for the current quarter compared with $0.65 last year. Net income for the quarter was $46.3 million compared with $113.8 million for fiscal 2000 and earnings per share, after deducting preferred dividends, was $0.15 for the current quarter compared with $0.44 for the same quarter last year.

For the year ended December 31, 2001, income excluding net realised gains, nonrecurring expenses and the cumulative effect of adopting a new accounting standard was a loss of $68.9 million compared with $581.9 million last year and a loss per share, after deducting preferred dividends, of $0.40 for the year ended December 31, 2001 compared with earnings per share of $2.48 for 2000.

Net loss for the year was $146.4 million compared with net income of $543 million for fiscal 2000. The loss per share, after deducting preferred dividends, was $0.74 for the current year compared with earnings per share of $2.31 last year.

Gross premiums written for the quarter increased 65 percent to $2.7 billion, compared with $1.6 billion for the same quarter in 2000.

Net premiums written during the quarter were $1.9 billion compared with $1 billion for the same period in 2000, an increase of 83 percent. Net premiums earned during the quarter were up 62 percent to $1.8 billion from $1.1 billion for the same quarter in 2000.

Gross premiums written for fiscal 2001 were $10.2 billion compared with $7.6 billion for fiscal 2000, an increase of 34 percent.

For fiscal 2001, net premiums written increased 30 percent to $6.4 billion compared with $4.9 billion for fiscal 2000. Net premiums earned for the year ended December 31, 2001 were $5.9 billion compared with $4.5 billion for fiscal 2000, a 30 percent increase.

Net investment income, excluding net realised gains, was $192 million for the fiscal 2001 fourth quarter, compared with $209 million for the same period last year. For the year ended December 31, 2001, net investment income, excluding net realised gains, was $786 million compared with $771 million for fiscal 2000.

During the 2001 fourth quarter, ACE had net realised gains, net of tax, of $4 million, compared with net realised losses of $50 million for the same quarter in 2000. For the year ended December 31, 2001, net realised losses, net of tax, were $50 million, compared with net realised losses of $39 million for fiscal 2000.

A replay of ACE's conference call is available until Wednesday, February 20, and can be accessed through www.acelimited.com.