Insurer Ace Ltd. reports sharp drop in 3Q profit
DES MOINES, Iowa --Bermuda-based property and casualty insurance company Ace Ltd. said Tuesday its third-quarter profit fell 92 percent as it recorded $1.1 billion after taxes in realized and unrealized losses from investments.
ACE said it earned $54 million, or 16 cents a share compared with $656 million, or $1.95 a year ago.
Excluding investment losses, profit fell 27 percent to $504 million, or $1.51 a share. Sales fell 3 percent to $1.97 billion.
Analysts surveyed by Thomson Reuters expected profit of $1.46 a share on sales of $3.47 billion. They typically exclude one-time charges.
Shares rose 11.3 percent, or $5.02 to close at $49.37. They've traded in a 52-week range of $34.90 and $68.
The company said results included unrealized losses of $854 million and $281 million of realized losses.
"In my judgment, given both the rapid destruction and increased cost of capital, combined with the damage inflicted on a number of companies in our industry, the soft market for P&C insurance is essentially over, and rates will begin to firm," said chief executive Evan G. Greenberg. "These challenging times will create opportunities for those companies with the financial wherewithal and franchise power to take advantage, and I'm confident ACE will be one of them."
For the first nine months, profit was $3.46 a share, compared with $5.98 per share for the first nine months of 2007. Excluding losses, profit was $5.84 per share, compared with $6.02 a share a year ago.
The nine-month results included the acquisition of Combined Insurance, which was effective April 1.
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On the Net: Ace Ltd.: http://www.acelimited.com 