Posted on 24 Oct 2012 by Neilson
Property and casualty insurer ACE Ltd. said on Tuesday that it returned to a profit in the third quarter, aided by higher premiums written and lower catastrophe losses.
Ace also raised its financial outlook for the full year, partly because of lower-than-expected catastrophe losses.
The company, based in Zurich, said net income was $640 million, or $1.86 per share, for the three months ended Sept. 30. That compares with a loss of $39 million, or 11 cents per share, in the same period last year.
Analysts expected $1.83 per share, according to FactSet.
Management noted that drought conditions in the U.S. severely affected the company's crop insurance business and reduced its operating income by 28 cents per share.
Even so, premiums grew during the quarter at the fastest pace so far this year, propelling net premiums written to $4.72 billion. That's up 8.6 percent from the same period last year.
However, underwriting income declined 24 percent to $360 million.
Total after-tax catastrophe losses including reinstatement premiums were $41 million, down from $86 million in the year-ago period.
ACE cited lower catastrophe losses and expansion of its financial reserves as it raised its full-year expectations for $7.73 to $8.03 per share in after-tax operating income. In July, the company expected earnings of $7.20 to $7.60 per share. Analysts, on average, expect $7.90.