ACE Limited ACE posted third-quarter 2015 operating earnings of $2.40 per share, on par with the Zacks Consensus Estimate. Earnings however declined 9% year over year.
Including net realized losses, net of tax, of $1.10 per share and The Chubb Corp. CB integration expense of 2 cents a share, ACE Limited reported net income of $1.62 per share, down 30.2% year over year.
Operational Performance
Gross premiums written by ACE Limited were $6.3 billion, up 1.3% year over year. Net premiums earned inched down 0.2% year over year to $4.7 billion.
Net investment income was $549 million, down 3% year over year on unfavorable foreign currency movement and a decrease in call activity in the company's corporate bond portfolio.
Underwriting income at ACE Limited was a record $597 million, up 1.9% year over year. Combined ratio improved 40 basis points (bps) year over year to 85.9%.
Segment Update
Insurance-North American P&C: The segment recorded 10.8% year-over-year growth in net premium earned of $1.7 billion in the quarter. Operating income decreased 3.3% year over year to $326 million. Combined ratio improved 90 bps to 90.5%.
Insurance-North American Agriculture: Net earned premium declined 3.5% year over year to $739 million. Operating income was $56 million, down 1.8% year over year. Combined ratio deteriorated 70 bps to 90.8%.
Insurance-Overseas General: Net premium earned declined 6.4% year over year to $1.6 billion. Operating income was $240 million, down 5.2% year over year. Combined ratio deteriorated 190 bps to 82%.
Global Reinsurance: Net premium decreased nearly 20.4% year over year to $203 million. Operating income of $190 million increased 31% on a year-over-year basis. Combined ratio improved 2,900 bps to 41.2%.
Life: Net premium earned of $480 million decreased 1.8% from the year-ago quarter. Operating income declined 21% year over year to $57 million.
Financial Update
ACE Limited exited the quarter with cash of $1.04 billion, up 58% from the 2014-end level.
Book value per share, as of Sep 30, 2015, was $89.88, down 0.2% from $90.02 as of Dec 31, 2014.
Operating cash flow was $808 million in the quarter. Operating return on equity was 12.9%.
Zacks Rank and Performance by Other P&Cs Insurers
ACE Limited currently carries a Zacks Rank #3 (Hold).
The bottom line at The Travelers Companies Inc. TRV and Progressive Corp. PGR outperformed their respective Zacks Consensus Estimate in the third quarter.
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