Bermuda-based insurance giant ACE Limited last night reported a $3 million loss in the third quarter, a direct result of massive claims from "unprecedented" Atlantic hurricane activity and typhoons in the Pacific.

In an earnings statement, ACE said its net loss of $3 million compared to profits of $355 million during the same period ended September 30, a year ago.

Total impact to ACE from storm activity was a $406 million after-tax charge.

Broken down per share, ACE reported losses of five cents a share compared to earnings of $1.04 per share in the third quarter of 2003.

Operating income, which excludes net realised gains or losses stood at $31 million for the quarter.

ACE president and CEO Evan Greenberg said the storm activity had swamped an otherwise strong quarter.

"Our income for the quarter was significantly impacted by an unprecedented series of large natural catastrophe events which overshadowed an otherwise strong quarter in terms of revenue, earnings and book value growth. Our claims organisation and internal risk management systems were put to the test this quarter, and I am pleased to say that ACE came through with flying colours," he said in the earnings statement.

But Mr. Greenberg, who took up the reins for the Bermuda company writing business in 50 countries around the globe from now chairman Brian Duperreault earlier this year, also sounded a warning to investors that ACE could see some material impact in a future quarter after it was revealed on October 14 that some ACE units had participated in 'bid rigging' with global broking giant Marsh & McLennan.

This was revealed in a damning lawsuit against Marsh from New York Attorney General Eliot Spitzer, who has for months been probing how insurers make reward payments to brokers for placing business with them.

The civil suit alleges that Marsh's practices were fraudulent and violated antitrust and securities laws.