Net income for the nine months ended September 30, 2009, was $4.73 per share, compared with $3.45 per share for 2008. For the nine months ended September 30, 2009, income excluding net realized gains (losses) was $6.16 per share, compared with $5.81 per share for 2008. The P&C combined ratio for the nine months ended September 30, 2009, was 87.8%. Book value increased $4.3 billion, up 30% during the nine months ended September 30, 2009.

Nine Months Summary
(in millions, except per share amounts)
(Unaudited)
                                                                                            (Per Share - Diluted)
                                                            2009       2008      Change     2009        2008      Change
Net income                                                $ 1,596    $ 1,177     36  %    $ 4.73     $  3.45      37  %
Net realized gains (losses), net of tax                     (480  )    (790  )   -          (1.43 )     (2.36 )   -
Income excluding net realized gains (losses), net of tax  $ 2,076    $ 1,967     6   %    $ 6.16     $  5.81      6   %

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: "ACE had an excellent third quarter with all divisions of the company performing well and contributing to results. Our book value grew 13% in the quarter, 30% for the year, and stands at an all-time high. After-tax operating income increased 39% from the same period last year, and our return on equity was 16%.

"Our P&C combined ratio was 88.1% and benefited from positive prior period reserve development and light catastrophe losses in the period. Excluding those items, our current accident year combined ratio for the quarter and the year was 93.3% and 91.4%, respectively -- again, an excellent result. In addition, as a result of our underwriting discipline, while we sacrificed some growth, we achieved positive rate change in the quarter of about 2%.

"Premium revenue growth was impacted in the quarter by recessionary conditions, a strong U.S. dollar and a competitive insurance market. Growth in the period benefited, however, from customers seeking ACE's strong balance sheet as well as our broad product portfolio and global presence. By the nature of some of our businesses, growth can be volatile quarter to quarter, but more stable when viewed over a longer period of time. In fact, we expect meaningfully stronger revenue growth in the fourth quarter regardless of foreign exchange."

Other operating highlights for the quarter ended September 30, 2009, were as follows: (1)

-- Net premiums written and earned decreased 4% and 6%, respectively. Excluding the impact of foreign exchange, net premiums written and earned were flat and decreased 3%, respectively.

-- The P&C combined ratio was 88.1% compared with 97.9%. The P&C combined ratio year to date was 87.8% compared with 90.4%.

-- Favorable prior period development pre-tax was $203 million compared with $277 million in 2008.

-- P&C pre-tax underwriting income increased to $359 million compared with $66 million.

-- Catastrophe losses were $45 million compared with $411 million.

-- Operating cash flow was $1 billion.

-- Net loss reserves increased $344 million. Excluding foreign exchange valuation, net loss reserves increased $135 million. Year-to-date net loss reserves increased $923 million. Excluding foreign exchange valuation, net loss reserves increased $429 million.

-- Net investment income decreased 2% to $511 million. Invested assets increased 7% to $46.7 billion.

-- Return on average equity was 15.9%.(3) Year-to-date return on average equity was 16.7%.

-- Book value per share(4) increased 13% from $49.27 at June 30, 2009, to $55.71, while it increased 29% from December 31, 2008.

-- Tangible book value per share(4) increased 17% from $38.10 at June 30, 2009, to $44.49, while it increased 39% from December 31, 2008.

-- Net realized and unrealized gains after tax from our investment portfolio totaled approximately $1.7 billion. Net realized losses from derivative accounting related to the guaranteed minimum income benefits (GMIBs) of our life reinsurance business, net of associated hedges, were approximately $209 million. As the company's credit spreads improved, derivative accounting required an increase in our fair value liability due to our increased ability to pay. There was also an impact due to lower interest rates.

Details of our financial results for our business segments are available in the ACE Limited Financial Supplement. Key segment items for the quarter ended September 30, 2009, include:

-- Insurance-North American: Net premiums written decreased 6%. Excluding the impact of prior year crop insurance, net premiums written were flat. The combined ratio was 91.3% compared with 104.1%.

-- Insurance-Overseas General: Net premiums written decreased 7%. Adjusting for the impact of foreign exchange, they increased 2%. The combined ratio was 87.4% compared with 89.9%.

-- Global Reinsurance: Net premiums written increased 18%. The combined ratio was 58.5% compared with 91.5%.

-- Life: Net premiums written increased 7%. Life underwriting income increased 12% to $95 million.

Please refer to the ACE Limited Financial Supplement dated September 30, 2009, which is posted on the company's website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure. The URL reference is: http://media.corporate-ir.net/media_files/irol/10/100907/fin_supp_september_30_2009.xls.

ACE will host its third quarter earnings conference call and webcast on Wednesday, October 28, 2009, beginning at 8:30 a.m. ET. The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 888-359-3610 (within the United States) or 719-457-2605 (international); passcode 2934041. Please refer to the ACE Limited website in the Investor Information section under Calendar of Events for details. A replay of the call will be available for approximately one month. To listen to the replay, dial: 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 2934041.

The ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com.

(1) All comparisons are with the same periods last year unless specifically stated.

(2) Non-GAAP Financial Measures:

Operating income or income excluding net realized gains (losses), net of tax is a common performance measurement for insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially-owned entities because the amount of these gains (losses) do not relate to their respective operations.

Underwriting income is calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest and income tax expense and net realized gains (losses). Life underwriting income includes net investment income. We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

See reconciliation of Non-GAAP Financial Measures on page 26 in the financial supplement.

These measures should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

(3) Calculated using income excluding net realized gains (losses) less perpetual preferred securities divided by average common shareholders' equity for the period. To annualize a quarterly rate, multiply by four.

(4) Book value per common share is common shareholders' equity divided by the shares outstanding. Tangible book value per common share is common shareholders' equity less goodwill and other intangible assets divided by the shares outstanding.

NM -- not meaningful comparison

Cautionary Statement Regarding Forward-Looking Statements:

Forward-looking statements made in this press release, such as those related to revenue growth and company performance, reflect the company's current views and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, matters described could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments and settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management's response to these factors, and other factors identified in the company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
                                                                      September 30   December 31
                                                                      2009           2008
Assets
Investments                                                           $      45,921  $      39,715
Cash                                                                         742            867
Insurance and reinsurance balances receivable                                3,626          3,453
Reinsurance recoverable on losses and loss expenses                          13,689         13,917
Other assets                                                                 13,843         14,105
                          Total assets                                $      77,821  $      72,057
Liabilities
Unpaid losses and loss expenses                                       $      37,871  $      37,176
Unearned premiums                                                            6,369          5,950
Other liabilities                                                            14,848         14,485
                          Total liabilities                                  59,088         57,611
Shareholders' equity
                          Total shareholders' equity                         18,733         14,446
                          Total liabilities and shareholders' equity  $      77,821  $      72,057
Book value per common share(4)                                        $      55.71   $      43.30

ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and
ratios)
(Unaudited)
                                                  Three Months Ended            Nine Months Ended
                                                  September 30                  September 30
                                                  2009           2008           2009            2008
Gross premiums written                            $   5,005      $   5,220      $   14,657      $   14,922
Net premiums written                                  3,155          3,276          9,994           10,028
Net premiums earned                                   3,393          3,609          9,853           9,977
Losses and loss expenses                              1,885          2,369          5,522           5,843
Policy benefits                                       79             91             256             243
Policy acquisition costs                              567            581            1,571           1,618
Administrative expenses                               451            457            1,325           1,293
Underwriting income(2)                                411            111            1,179           980
Net investment income                                 511            520            1,519           1,541
Net realized gains (losses)                           (223  )        (510  )        (569   )        (989   )
Interest expense                                      60             68             169             176
Other income (expense)                                (51   )        (6    )        (44    )        104
Income tax expense                                    94             (7    )        320             283
Net income                                            494            54             1,596           1,177
Preference share dividend                             -              -              -               (24    )
Net income available to holders of common shares  $   494        $   54         $   1,596       $   1,153
Diluted earnings per share:
Income excluding net realized gains (losses)(2)   $   2.07       $   1.50       $   6.16        $   5.81
Net income                                        $   1.46       $   0.16       $   4.73        $   3.45
Weighted average diluted shares outstanding           338.4          335.3          337.1           334.5
Loss and loss expense ratio                           58.2  %        69.5  %        58.7   %        61.5   %
Policy acquisition cost ratio                         16.7  %        16.3  %        16.0   %        16.3   %
Administrative expense ratio                          13.2  %        12.1  %        13.1   %        12.6   %
Combined ratio                                        88.1  %        97.9  %        87.8   %        90.4   %

ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
                                                    Three Months Ended Nine Months Ended
                                                    September 30       September 30
                                                2009       2008        2009        2008
Gross Premiums Written
Insurance - North American                      $   2,730  $    2,987  $   7,472   $   7,886
Insurance - Overseas General                        1,677       1,678      5,080       5,332
Global Reinsurance                                  215         174        953         791
Life                                                383         381        1,152       913
Total                                           $   5,005  $    5,220  $   14,657  $   14,922
Net Premiums Written
Insurance - North American                      $   1,374  $    1,461  $   4,220   $   4,332
Insurance - Overseas General                        1,203       1,293      3,795       4,081
Global Reinsurance                                  206         174        894         788
Life                                                372         348        1,085       827
Total                                           $   3,155  $    3,276  $   9,994   $   10,028
Net Premiums Earned
Insurance - North American                      $   1,467  $    1,583  $   4,319   $   4,302
Insurance - Overseas General                        1,317       1,425      3,747       4,087
Global Reinsurance                                  247         257        726         777
Life                                                362         344        1,061       811
Total                                           $   3,393  $    3,609  $   9,853   $   9,977
Income Excluding Net Realized Gains (Losses)(2)
Insurance - North American                      $   299    $    153    $   927     $   789
Insurance - Overseas General                        233         252        632         787
Global Reinsurance                                  158         93         487         385
Life                                                74          66         193         164
Corporate                                           (63)        (60)       (163)       (158)
Total                                           $   701    $    504    $   2,076   $   1,967

SOURCE: ACE Limited

ACE Limited 
Investor Contact: 
Helen M. Wilson, 441-299-9283 
helen.wilson@acegroup.com 
or 
Media Contact: 
Stephen M. Wasdick, 212-827-4444 
stephen.wasdick@acegroup.com

SmarTrend is bullish on shares of ACE and our subscribers received an Uptrend alert on July 23, 2009 at $46.77, which has returned 17.3% to date.

Write to Chip Brian at cbrian@tradethetrend.com

---------------------------------------------------------------------------------------------

SmarTrend analyzes over 5,000 securities simultaneously throughout the trading day and provides its subscribers with trend change alerts in real time. To get a free trial of our trading calls and maximize your trading results, please visit http://www.TradeTheTrend.com.

Get exclusive, actionable insight into how the market is expected to trend prior to market open with our free morning newsletter. Sign up at: http://www.TradeTheTrend.com/signup.html

The ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com.

SOURCE: ACE Limited

ACE Limited 
Investor Contact: Helen M. Wilson, 441-299-9283 
helen.wilson@acegroup.com 
or 
Media Contact: Stephen M. Wasdick, 212-827-4444 
stephen.wasdick@acegroup.com