Ace Ltd. Adds $2.18B to Reserve for Asbestos Charges
----------------------------------------------------
Published January 31, 2003

Ace Ltd. said it added $2,180,000,000 to reserves for asbestos-related 
claims, giving the insurer a loss in the fourth quarter.  The new 
reserve cut fourth-quarter earnings by $354,000,000 or $1.32 a share, 
the Hamilton, Bermuda-based company said.  Operating income was 92 
cents a share, versus the 89-cent average analyst estimate, according 
to Thomson First Call. 

Ace said $1,860,000,000 of the reserve was covered by reinsurance, 
including about $533,000,000 from a policy written by National 
Indemnity Co., a unit of Warren Buffett's Berkshire Hathaway Inc.  The 
asbestos reserves boost follows a similar move by rival Travelers 
Property Casualty Corporation, which earlier this month added 
$2,450,000,000 to asbestos loss reserves. 

"Charges are always an unpleasant thing, but this should clear the air 
on asbestos," said Thomas Davis, an analyst at Loomis Sayles & Co., 
which manages $70,000,000,000 and owns Ace shares.  "Hopefully they'll 
be able to do what Travelers did" and provide enough disclosure to 
satisfy investors. 

Ace's total asbestos reserves "are now at the high end of the range 
calculated by our internal analysis and are consistent with the 
actuarial consulting firm's best estimate," Chairman and Chief 
Executive Brian Duperreault said in a statement. 

In an interview, Mr. Duperreault said commercial insurance pricing 
hasn't peaked yet.  "Property policies are starting to approach no 
increases, but I haven't seen prices falling.  Casualty pricing 
continues to be quite strong. Overall commercial rates are still 
rising." 


COMPANY PROFILE

ACE Limited (NYSE: ACE) 
ACE USA, 2 Liberty Pl., 1601 Chestnut St.
Philadelphia, PA 19101-1484    
Phone: 215-640-1000
Fax: 215-640-2489 
http://www.ace.bm 

Employees               : 7,676 
Revenue                 : $6,644,700,000
Net Income              : $(146,400,000)    
Assets                  : $37,186,800,000
Liabilities             : $31,080,100,000 
(As of December 31, 2001)
 
Description: Through subsidiaries, ACE Limited (based in tax-friendly 
Bermuda) sells property/casualty insurance and reinsurance in the US 
and about 50 other countries.  ACE International -- which is subdivided 
into Asia Pacific, Europe, Far East, and Latin America -- sells 
property/casualty lines to personal and commercial clients.  ACE Global 
Reinsurance, primarily through its Tempest Re unit, provides 
catastrophe reinsurance to personal and commercial clients.  Through 
ACE Global Markets, the firm owns four Lloyd's of London managing 
agencies. ACE USA provides US commercial and casualty insurance.  
Expanding its operations, the company has also moved into health 
insurance.


-----------------------------------------------------------
LitigationDataSource.com