North American P&C premiums up 11%, net income down 23% for insurance carrier ACE

ACE Ltd. has reported an 11.1% year-over-year increase in net premiums earned within its North American property & casualty insurance business and a 2.4-point drop in the loss and expense ratio for the first quarter of the year.

Zurich-based ACE, the holding company that owns the ACE Group Companies, reported $1.487 billion, in net premiums earned in North American P&C, in a filings with the United States Securities and Exchange Commission. That compared to net premiums earned of $1.338 billion in the same business unit during the first quarter of 2013. All figures are in U.S. dollars.

ACE’s North American P&C segment is comprised of operations in the U.S., Canada, and Bermuda, including the retail division, its commercial risk services, its wholesale and specialty divisions (ACE Westchester and ACE Bermuda) and run-off operations including Brandywine Holdings Corp.

The loss and loss expense ratio in North American p&c was 63.2% in the latest quarter, down 2.4 points from 65.6% in Q1 2013.

“In North America, our P&C business grew 11% in the quarter and continued to achieve positive rate increases with overall pricing up in casualty-related lines and down in property-related,” ACE chairman and chief executive officer Evan G. Greenberg stated in a press release.

Company-wide, ACE reported net income of $734 million in Q1 2014, down 23% from $953 million in Q1 2013. Net investment income for the first quarter increased 4.1%, from $531 million in 2013 to $553 million this year. First-quarter loss and loss expenses increased 12.2% year over year, from $1.926 billion in 2013 to $2.161 billion this year.

Also company-wide, ACE reported gross premiums written of  $5.37 billion in Q1 2014, up 8.8% from $4.96 billion in Q1 2013. Net premiums written were $4.185 billion in Q1 2014, up 10.2% from $3.798 billion in Q1 2013. Net premiums earned were $3.97 billion in Q1 2014, up 11.1% from $3.573 billion in Q1 2013.

The company-wide underwriting income was $432 million in the latest quarter, compared to $388 million in Q1 2013.

“Underwriting results were particularly strong in the quarter, with underwriting income up 7% and a P&C combined ratio of 88.8%,” Greenberg stated. “Underwriting income benefited from excellent current accident year underwriting income growth before catastrophe losses of 17% as a result of double-digit growth in earned premium and improved margin.”

The company-wide loss and loss expense ratio was 57.7% in Q1 2014, up 0.6 points from 57.1% in Q1 2013, while the combined ratio was 88.8% in Q1 2014, up 0.6 points from 88.2% in Q1 2013.

In global reinsurance, ACE reported net premiums earned of $284 million in Q1 2014, up 15% year-over-year from $247 million in Q1 2013.

ACE’s reinsurance operations include ACE Tempest Re Bermuda, ACE Tempest Re USA, ACE Tempest Re International, and ACE Tempest Re Canada, the company said in its annual report, which it filed in February.

ACE Tempest Re Canada provides casualty, property risk and property catastrophe reinsurance.

In its reinsurance operations, ACE reported a loss and loss expense ratio of 44.0% in Q1 2014, up a point from 43.0% in Q1 2013. The combined ratio in reinsurance was 72.9% in Q1 2014, up 5.6 points from 67.3% in Q1 2013.