"Rates will begin to firm" - Evan Greenberg. ACE 3Q net income falls 92% after market losses.
ACE Limited has reported third quarter operating income of $504m and net income of $54m. Operating income was down 27% on the same quarter last year. Net income tumbled 92%, largely because of financial market losses.
Net income per share was $0.16 per share, compared with $1.95 per share for the same quarter last year.
The company noted that the quarter was marked by financial market volatility in both the credit and equity markets, which impacted net income and book value. The net realised and unrealised loss after tax was $1.3bn during the quarter. Book value decreased $971m for the quarter.
“ACE performed relatively well in a period marked by extraordinary financial market conditions and significant natural catastrophes. Our financial results demonstrated balance sheet stability and earnings strength,” said Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited. "Our book value in the quarter was impacted by the extreme movement in financial asset prices and declined 6%, while in the last 12 months, our book value has remained stable, down less than 1%."
“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. 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,” he said.