ACE settles with investigators, reports 2006 1Q results

Bermuda-based reinsurer ACE Limited (NYSE: ACE) has reported a record net income for the first quarter ended Mar. 31, 2006, of US$489 million.
The net income figure includes, the company reported, “a US$80-million pre-tax charge pertaining to the imminent settlement with certain governmental agencies of their investigations of various insurance industry business practices.”
Income excluding net realized gains (losses), the investigation-related settlement charge and the cumulative effect of a change in accounting principle (cumulative effect), net of tax, for the first quarter was a record US$543 million, compared with US$455 million for the same quarter of last year.
“We had an excellent quarter,” ACE Ltd president and CEO Evan Greenberg commented in a press release. “All divisions of ACE performed well. Both operating and net income achieved record highs even after charges related to an investigation settlement.
“We anticipate revenue growth picking up in the second quarter. We are well-diversified, and while certain of our businesses are under growth pressure, we have growth opportunity in other areas of our business. The settlement that will be announced shortly will be a major step in achieving closure and finality to what has been a difficult two years for our company and the industry.”
The property and casualty combined ratio was 90.2% for the quarter, the company reported. Excluding the investigation-related settlement charge, the P&C combined ratio was 87.2% for the quarter compared with 88.5% a year ago.
ACE’s return on average equity for the quarter was 16.3%.