UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
Current Report
 
Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) – July 25, 2005

 
ACE LIMITED
(Exact name of registrant as specified in its charter)

 
					
Cayman Islands	 	1-11778	 	98-0091805	
(State or other jurisdiction)	 	(Commission File Number)	 	(I.R.S. Employer of Incorporation
Identification No.)	
 
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM 08 Bermuda
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (441) 295-5200
 
Not applicable
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
 
(Former name or former address, if changed since last report)

Item 2.02. Results of Operations and Financial Condition
 
On July 25, 2005, ACE Limited issued a press release reporting its second quarter 2005 results and the availability of its second quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.
 
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.
 
(c)	Exhibits	

Exhibit
Number
	  	Description
	
99.1	  	Press release, dated July 25, 2005, reporting second quarter results	
		
99.2	  	Second Quarter 2005 Financial Supplement	

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ACE LIMITED	
		
By:	 	/ S /    P HILIP V. B ANCROFT        
	
 	 	Philip V. Bancroft	
 	 	Chief Financial Officer	
 
DATE: July 25, 2005

EXHIBIT INDEX

Number
	  	Description
	  	Method of Filing
	
99.1	  	Press release, dated July 25, 2005, reporting second quarter results	  	Furnished herewith	
			
99.2	  	Second Quarter 2005 Financial Supplement	  	Furnished herewith	
  
EXHIBIT 99.1

 	  	 	 	 	  	 	 	 	
	  	ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM 08
Bermuda	 	PO Box HM 1015
Hamilton HM DX
Bermuda
 
441 295-5200  main
441 292-8675 fax	  	 
            	 	News
Release	
 	  	 	 	www.acelimited.com	  	 	 	 	

FOR IMMEDIATE RELEASE

							
 	 	Investor Contact:	 	Helen M. Wilson
(441) 299-9283
helen.wilson@ace.bm	 	                	
				
 	 	Media Contact:	 	Robert T. Grieves
(212) 621-8684
robert.grieves@ace-ina.com	 	 	

ACE LIMITED REPORTS RECORD SECOND QUARTER NET INCOME OF $467 MILLION;
 
INCOME EXCLUDING NET REALIZED GAINS (LOSSES) INCREASES 13% TO $443 MILLION;
 
NET INVESTMENT INCOME INCREASES 26% TO $305 MILLION
 
HAMILTON, Bermuda – July 25, 2005 — ACE Limited (NYSE: ACE) today reported net income for the second quarter ended June 30, 2005 of $467 million or $1.58 per ordinary share after payment of preferred dividends, compared with net income of $423 million or $1.44 per share for the same quarter last year. Income excluding net realized gains (losses) after tax for the second quarter was $443 million, or $1.50 per share, compared with $391 million or $1.33 per share for the same quarter a year ago. (1)
 
Second Quarter Summary
(in millions, except per share amounts)
																			
 	  	 	  	 	  	 	 	 	(Per Share - Diluted)	 	
 	  	2005
	  	2004
	  	Change
	 	 	2005
	  	2004
	  	Change
	 	
 	  	Restated	 	 	Restated	 	
							
Net income	  	$	467	  	$	423	  	10	%	 	$	1.58	  	$	1.44	  	10	%	
							
Net realized gains, net of tax	  	 	24	  	 	32	  	—  	 	 	 	0.08	  	 	0.11	  	—  	 	
							
Income excluding net realized gains, net of tax (1)	  	$	443	  	$	391	  	13	%	 	$	1.50	  	$	1.33	  	13	%	
 
Net income for the first six months of 2005 was $904 million or $3.06 per share, compared with $877 million or $3.00 per share for the first six months of 2004. For the first six months of 2005, income excluding net realized gains (losses) after tax was $898 million or $3.04 per share, compared with $809 million or $2.76 per share for the same period of 2004. (1)
 
Page 1/6

Six Months
(in millions, except per share amounts)

 	  	 	  	 	  	 	 	 	(Per Share - Diluted)
	 	
 	  	2005
	  	2004
	  	Change
	 	 	2005
	  	2004
	  	Change
	 	
 	  	Restated	 	 	Restated	 	
							
Net income	  	$	904	  	$	877	  	3	%	 	$	3.06	  	$	3.00	  	2	%	
							
Net realized gains, net of tax	  	 	6	  	 	68	  	—  	 	 	 	0.02	  	 	0.24	  	—  	 	
							
Income excluding net realized gains, net of tax (1)	  	$	898	  	$	809	  	11	%	 	$	3.04	  	$	2.76	  	10	%	
 
Evan Greenberg, President and Chief Executive Officer of ACE Limited, commented: “This was an excellent quarter for ACE, highlighted by record net income and strong operating income. Shareholders’ equity exceeded $10 billion – a milestone – and reflects our continued and growing balance sheet strength. The quality of our earnings was excellent, with P&C underwriting income and investment income each contributing approximately 50 percent to our operating income for the quarter. Revenue growth slowed in line with market conditions. We are maintaining discipline, and our growth reflects that.”
 
Second quarter operating highlights were as follows:
 
 	•	 	P&C net premiums earned increased 7% over the prior year’s quarter	
 	•	 	The P&C combined ratio was 90.4% for the quarter compared with 89.1% a year ago	
 	•	 	Operating cash flow amounted to $1.1 billion for the quarter	
 	•	 	Invested assets increased by $1.1 billion from March 31, 2005	
 	•	 	Net investment income increased 26% to $305 million compared to prior year’s quarter	
 	•	 	Shareholders’ equity increased 5% to $10.5 billion from March 31, 2005	
 	•	 	Tangible equity rose to $7.8 billion, a gain of 7% from March 31, 2005	
 	•	 	Debt to total capital ratio improved to 15.5% from 16.1% at March 31, 2005	
 	•	 	Return on equity for the quarter was 17.9%; excluding FAS 115 it was 18.7% (2)	
 	•	 	Diluted book value per share as of June 30, 2005 was $34.28 (3)	
 
Financial results for the quarter by business segment compared with prior year’s results follow. Further details are available in the financial supplement. Key items include:
 
 	•	 	Insurance-North American: Net premiums written increased 6% for the quarter and the combined ratio was 90.1%.	
 
 	•	 	Insurance-Overseas General: Net premiums written declined 3% for the quarter and the combined ratio was 89.7%.	
 
 	•	 	Global Reinsurance: Net premiums written were flat for the quarter. This segment had a combined ratio of 80.2%.	
 
 	•	 	Financial Services: Income excluding net realized gains (losses) was $49 million for the quarter.	
 
All amounts included herein for prior periods have been adjusted to reflect the previously reported restatements.
 
Please refer to the ACE Financial Supplement June 30, 2005, which is posted on the Company’s website, for more detailed information on individual segment performance, together with additional disclosure on
 
Page 2/6

reinsurance recoverable, loss reserves, investment portfolio and capital structure. ACE’s website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports/fin_supp_june_30_2005.xls . (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser’s URL address field.)
 
ACE will host its second quarter 2005 earnings conference call and webcast on Tuesday, July 26, 2005 beginning at 8:30 a.m. EDT. The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 888-889-5602 (within the United States) or 973-582-2734 (international). 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 from Tuesday, July 26, 2005 until Friday, August 26, 2005. To listen to the replay dial 877-519-4471 (in the United States) or 973-341-3080 (international); passcode 5826870.
 
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, a component of the Standard & Poor’s 500 stock index, 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 Non-GAAP Financial Measures:
Operating Income or Income excluding net realized gains (losses) and the tax effect of net realized gains (losses) is a common performance measurement. 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) because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities.
Underwriting income is calculated by subtracting losses and loss expenses, life and annuity 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). We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.
Tangible shareholder’s equity is shareholders’ equity less goodwill. See reconciliation of Non-GAAP Financial Measure on page 27 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).
 
2 Calculated using income excluding net realized gains (losses).
 
3 Diluted book value per ordinary share is ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
 
Cautionary Statement Regarding Forward-Looking Statements:
 
Any forward-looking statements made in this press release reflect the Company’s current views with respect to future events and financial performance 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, the Company’s forward-looking statements, such as its statements regarding growth, could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, 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, internal investigation developments, the amount and timing of reinsurance recoverable, credit developments among reinsurers, actual market developments, 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.
 
(tables to follow)
 
Page 3/6

							
ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
	
 	  	June 30
2005
	  	Restated
December 31
2004
	
Assets	  	 	 	  	 	 	
Total investments	  	$	28,897	  	$	27,048	
Cash	  	 	651	  	 	507	
Insurance and reinsurance balances receivable	  	 	3,728	  	 	3,255	
Reinsurance recoverable	  	 	14,432	  	 	14,887	
Other assets	  	 	10,412	  	 	10,556	
 	  			  			
Total assets	  	$	58,120	  	$	56,253	

Liabilities	  	 	 	  	 	 	
Unpaid losses and loss expenses	  	$	32,101	  	$	31,483	
Unearned premiums	  	 	6,457	  	 	5,983	
Other liabilities	  	 	9,066	  	 	8,944	
 	  			  			
Total liabilities	  	$	47,624	  	$	46,410	

Shareholders’ equity	  	 	 	  	 	 	
Total shareholders’ equity	  	$	10,496	  	$	9,843	
 	  			  			
Total liabilities and shareholders’ equity	  	$	58,120	  	$	56,253	

Diluted book value per ordinary share (3) 	  	$	34.28	  	$	32.50	

Page 4/6

																	
ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
	 	
 	  	Three Months Ended
June 30
	 	 	Six Months Ended
June 30
	 	
 	  	 	 	 	Restated
	 	 	 	 	 	Restated
	 	
 	  	2005
	 	 	2004
	 	 	2005
	 	 	2004
	 	
Gross premiums written	  	$	4,213	 	 	$	4,042	 	 	$	8,756	 	 	$	8,460	 	
Net premiums written	  	 	2,909	 	 	 	2,861	 	 	 	6,275	 	 	 	6,081	 	
Net premiums earned	  	 	2,921	 	 	 	2,782	 	 	 	5,798	 	 	 	5,370	 	
					
Losses and loss expenses	  	 	1,844	 	 	 	1,726	 	 	 	3,633	 	 	 	3,255	 	
Life and annuity benefits	  	 	(37	 	 	 	44	 	 	 	72	 	 	 	86	 	
Policy acquisition costs	  	 	429	 	 	 	396	 	 	 	817	 	 	 	761	 	
Administrative expenses	  	 	316	 	 	 	304	 	 	 	652	 	 	 	622	 	
 	  				 				 				 				
Underwriting income (1)	  	 	295	 	 	 	312	 	 	 	624	 	 	 	646	 	
					
Net investment income	  	 	305	 	 	 	243	 	 	 	590	 	 	 	491	 	
Net realized gains (losses)	  	 	32	 	 	 	42	 	 	 	18	 	 	 	99	 	
Interest expense	  	 	43	 	 	 	46	 	 	 	85	 	 	 	90	 	
Other (income) expense	  	 	(6	)	 	 	(1	)	 	 	(11	)	 	 	16	 	
Income tax expense	  	 	128	 	 	 	129	 	 	 	254	 	 	 	253	 	
 	  				 				 				 				
Net income	  	 	467	 	 	 	423	 	 	 	904	 	 	 	877	 	
Preference shares dividend	  	 	(11	)	 	 	(11	)	 	 	(22	)	 	 	(22	)	
 	  				 				 				 				
Net income available to holders of ordinary shares	  	$	456	 	 	$	412	 	 	$	882	 	 	$	855	 	

Diluted earnings per share:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains
(losses) (1)	  	$	1.50	 	 	$	1.33	 	 	$	3.04	 	 	$	2.76	 	
Net income	  	$	1.58	 	 	$	1.44	 	 	$	3.06	 	 	$	3.00	 	
					
Weighted average diluted shares outstanding	  	 	288,451,164	 	 	 	285,371,164	 	 	 	288,172,519	 	 	 	285,037,944	 	
					
Loss and loss expense ratio	  	 	64.4	%	 	 	63.2	%	 	 	63.9	%	 	 	61.8	%	
Policy acquisition cost ratio	  	 	14.8	%	 	 	14.3	%	 	 	14.2	%	 	 	14.2	%	
Administrative expense ratio	  	 	11.0	%	 	 	11.2	%	 	 	11.4	%	 	 	11.8	%	
Combined ratio	  	 	90.2	%	 	 	88.7	%	 	 	89.5	%	 	 	87.8	%	

 
Ratios exclude life reinsurance business
 
Page 5/6

																	
ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)

 	  	Three Months Ended
June 30
	 	 	Six Months Ended
June 30
	 	
 	  	 	 	 	Restated
	 	 	 	 	 	Restated
	 	
 	  	2005
	 	 	2004
	 	 	2005
	 	 	2004

Gross Premiums Written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	2,344	 	 	$	2,102	 	 	$	4,494	 	 	$	4,007	 	
Insurance—Overseas General	  	 	1,428	 	 	 	1,501	 	 	 	3,064	 	 	 	3,174	 	
Global Reinsurance*	  	 	426	 	 	 	424	 	 	 	1,020	 	 	 	1,052	 	
Financial Services	  	 	15	 	 	 	15	 	 	 	178	 	 	 	223	 	
 	  				 				 				 				
Total	  	$	4,213	 	 	$	4,042	 	 	$	8,756	 	 	$	8,460	 	

Net Premiums Written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,412	 	 	$	1,330	 	 	$	2,837	 	 	$	2,541	 	
Insurance—Overseas General	  	 	1,062	 	 	 	1,098	 	 	 	2,257	 	 	 	2,276	 	
Global Reinsurance*	  	 	420	 	 	 	420	 	 	 	1,005	 	 	 	1,043	 	
Financial Services	  	 	15	 	 	 	13	 	 	 	176	 	 	 	221	 	
 	  				 				 				 				
Total	  	$	2,909	 	 	$	2,861	 	 	$	6,275	 	 	$	6,081	 	

Net Premiums Earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,319	 	 	$	1,178	 	 	$	2,604	 	 	$	2,185	 	
Insurance—Overseas General	  	 	1,081	 	 	 	1,069	 	 	 	2,169	 	 	 	2,088	 	
Global Reinsurance*	  	 	429	 	 	 	401	 	 	 	843	 	 	 	784	 	
Financial Services	  	 	92	 	 	 	134	 	 	 	182	 	 	 	313	 	
 	  				 				 				 				
Total	  	$	2,921	 	 	$	2,782	 	 	$	5,798	 	 	$	5,370	 	

Income (Loss) Excluding Net Realized Gains (Losses) (1) 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	187	 	 	$	159	 	 	$	395	 	 	$	311	 	
Insurance—Overseas General	  	 	146	 	 	 	103	 	 	 	305	 	 	 	216	 	
Global Reinsurance*	  	 	128	 	 	 	123	 	 	 	245	 	 	 	248	 	
Financial Services	  	 	49	 	 	 	58	 	 	 	90	 	 	 	143	 	
Corporate	  	 	(67	)	 	 	(52	)	 	 	(137	)	 	 	(109	)	
 	  				 				 				 				
Total	  	$	443	 	 	$	391	 	 	$	898	 	 	$	809	 	

 
* Includes both property and casualty reinsurance and life reinsurance
 
# # #
 
Page 6/6
 
Exhibit 99.2

 

			
Investor Contact
 
Helen M. Wilson
Phone: (441) 299-9283
Fax: (441) 292-8675
email: investorrelations@ace.bm	  	This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.	

Cautionary Statement Regarding Forward-Looking Statements:
 	
	  	Any forward-looking statements made in this financial supplement reflect the Company’s current views with respect to future events and financial performance 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, the Company’s forward-looking statements, such as statements concerning exposures, reserves and recoverables, could be affected by 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, internal investigation developments, the amount and timing of reinsurance receivable and credit developments among reinsurers. The Company’s forward-looking statements could also be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war. 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
Financial Supplement Table of Contents	 	 	

 	  	 	  	Page
	
I.	  	Financial Highlights	  	 	
 	  	- Consolidated Financial Highlights	  	1	
			
II.	  	Consolidated Results	  	 	
 	  	- Consolidated Results - Consecutive Quarters	  	2-4	
 	  	- Summary Consolidated Balance Sheets	  	5	
 	  	- Consolidated Premiums by Line of Business	  	6	
 	  	- Consolidating Statement of Operations	  	7-8	
			
III.	  	Segment Results	  	 	
  	  	- Insurance-North American	  	9-10	
 	  	- Insurance-Overseas General	  	11-12	
 	  	- Global Reinsurance	  	13-15	
 	  	- Financial Services	  	16-17	
			
IV.	  	Balance Sheet Details	  	 	
 	  	- Loss Reserve Rollforward	  	18	
 	  	- Reinsurance Recoverable Analysis	  	19-22	
 	  	- Investment Portfolio	  	23	
 	  	- Realized and Unrealized Gains (Losses)	  	24	
 	  	- Capital Structure	  	25	
 	  	- Computation of Basic and Diluted Earnings Per Share	  	26	
			
V.	  	Other Disclosures	  	 	
 	  	- Non-GAAP Financial Measures	  	27	
 	  	- Diluted Book Value per Ordinary Share	  	28	
 	  	- Comprehensive Income	  	29	
 	  	- Glossary	  	30	

					
	 	ACE Limited
Consolidated Financial Highlights
(in millions of U.S. dollars, except share, per share data and ratios)
(Unaudited)	 	 	

 	  	Three months ended June 30
	 	 	% Change
2Q-05 vs.	 	 	Six months ended June 30
	 	 	% Change
YTD-05 vs.	 	
 	  	2005
	 	 	2004
	 	 	2Q-04
	 	 	2005
	 	 	2004
	 	 	YTD-04
	 	
 	  	 	 	 	(Restated)	 	 	 	 	 	 	 	 	(Restated)	 	 	 	 	
Gross premiums written	  	$	4,213	 	 	$	4,042	 	 	4	%	 	$	8,756	 	 	$	8,460	 	 	3	%	
Net premiums written	  	$	2,909	 	 	$	2,861	 	 	2	%	 	$	6,275	 	 	$	6,081	 	 	3	%	
Net premiums earned	  	$	2,921	 	 	$	2,782	 	 	5	%	 	$	5,798	 	 	$	5,370	 	 	8	%	
Net investment income	  	$	305	 	 	$	243	 	 	26	%	 	$	590	 	 	$	491	 	 	20	%	
Net income	  	$	467	 	 	$	423	 	 	10	%	 	$	904	 	 	$	877	 	 	3	%	
Income excluding net realized gains (losses) (1)	  	$	443	 	 	$	391	 	 	13	%	 	$	898	 	 	$	809	 	 	11	%	
Comprehensive income	  	$	572	 	 	$	(137	)	 	NM	 	 	$	721	 	 	$	454	 	 	59	%	
Operating cash flow	  	$	1,147	 	 	$	1,097	 	 	5	%	 	$	2,357	 	 	$	2,269	 	 	4	%	
							
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	64.4	%	 	 	63.2	%	 	 	 	 	 	63.9	%	 	 	61.8	%	 	 	 	
Underwriting and administrative expense ratio	  	 	25.8	%	 	 	25.5	%	 	 	 	 	 	25.6	%	 	 	26.0	%	 	 	 	
 	  				 				 	 	 	 				 				 	 	 	
Combined ratio	  	 	90.2	%	 	 	88.7	%	 	 	 	 	 	89.5	%	 	 	87.8	%	 	 	 	
							
Annualized ROE*	  	 	17.9	%	 	 	17.3	%	 	 	 	 	 	18.2	%	 	 	18.5	%	 	 	 	
Annualized ROE, excluding FAS 115*	  	 	18.7	%	 	 	18.4	%	 	 	 	 	 	19.4	%	 	 	19.6	%	 	 	 	
							
Diluted earnings per share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	1.50	 	 	$	1.33	 	 	14	%	 	$	3.04	 	 	$	2.76	 	 	10	%	
Net income	  	$	1.58	 	 	$	1.44	 	 	10	%	 	$	3.06	 	 	$	3.00	 	 	2	%	
							
Diluted book value per ordinary share	  	$	34.28	 	 	$	30.41	 	 	13	%	 	$	34.28	 	 	$	30.41	 	 	13	%	
Diluted tangible book value per ordinary share	  	$	25.39	 	 	$	21.27	 	 	19	%	 	$	25.39	 	 	$	21.27	 	 	19	%	
							
Weighted average diluted ordinary shares outstanding	  	 	288.5	 	 	 	285.4	 	 	 	 	 	 	288.2	 	 	 	285.0	 	 	 	 	
							
Debt/ total capitalization	  	 	15.5	%	 	 	19.8	%	 	 	 	 	 	15.5	%	 	 	19.8	%	 	 	 	

(1)	See page 27 Non-GAAP Financial Measures.	
*	Calculated using income excluding net realized gains (losses).	

Financial Highlights	  	Page 1	

					
	 	ACE Limited
Consolidated Results -Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
ACE Limited Consolidated

 	 	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	 	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Property and Casualty (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	 	$	4,141	 	 	$	4,322	 	 	$	3,562	 	 	$	3,860	 	 	$	3,971	 	 	$	8,463	 	 	$	8,128	 	 	$	15,550	 	
Net premiums written	 	 	2,837	 	 	 	3,147	 	 	 	2,559	 	 	 	2,647	 	 	 	2,793	 	 	 	5,984	 	 	 	5,754	 	 	 	10,960	 	
Net premiums earned	 	 	2,772	 	 	 	2,729	 	 	 	2,730	 	 	 	2,688	 	 	 	2,594	 	 	 	5,501	 	 	 	4,952	 	 	 	10,370	 	
Losses and loss expenses	 	 	1,774	 	 	 	1,706	 	 	 	2,108	 	 	 	2,117	 	 	 	1,636	 	 	 	3,480	 	 	 	3,080	 	 	 	7,305	 	
Policy acquisition costs	 	 	424	 	 	 	382	 	 	 	405	 	 	 	385	 	 	 	381	 	 	 	806	 	 	 	730	 	 	 	1,520	 	
Administrative expenses	 	 	308	 	 	 	330	 	 	 	335	 	 	 	301	 	 	 	294	 	 	 	638	 	 	 	591	 	 	 	1,222	 	
 	 				 				 				 				 				 				 				 				
P& C underwriting income (loss)	 	$	266	 	 	$	311	 	 	$	(118	)	 	$	(115	)	 	$	283	 	 	$	577	 	 	$	551	 	 	$	323	 	
									
Financial Services underwriting income (loss)	 	 	14	 	 	 	1	 	 	 	(3	)	 	 	(11	)	 	 	26	 	 	 	15	 	 	 	84	 	 	 	70	 	
Life underwriting income (loss) excluding investment income	 	 	15	 	 	 	17	 	 	 	11	 	 	 	5	 	 	 	3	 	 	 	32	 	 	 	6	 	 	 	22	 	
Net investment income	 	 	305	 	 	 	285	 	 	 	282	 	 	 	246	 	 	 	243	 	 	 	590	 	 	 	491	 	 	 	1,019	 	
Net realized gains (losses)	 	 	32	 	 	 	(14	)	 	 	130	 	 	 	(32	)	 	 	42	 	 	 	18	 	 	 	99	 	 	 	197	 	
Interest expense	 	 	43	 	 	 	42	 	 	 	43	 	 	 	50	 	 	 	46	 	 	 	85	 	 	 	90	 	 	 	183	 	
Other (income) expense	 	 	(6	)	 	 	(5	)	 	 	1	 	 	 	(14	)	 	 	(1	)	 	 	(11	)	 	 	16	 	 	 	3	 	
Income tax expense (benefit)	 	 	128	 	 	 	126	 	 	 	(28	)	 	 	61	 	 	 	127	 	 	 	254	 	 	 	251	 	 	 	286	 	
 	 				 				 				 				 				 				 				 				
Net income (loss)	 	$	467	 	 	$	437	 	 	$	286	 	 	$	(4	)	 	$	423	 	 	$	904	 	 	$	874	 	 	$	1,159	 	
Net realized gains (losses)	 	 	32	 	 	 	(14	)	 	 	130	 	 	 	(32	)	 	 	42	 	 	 	18	 	 	 	99	 	 	 	197	 	
Tax expense on net realized gains (losses)	 	 	8	 	 	 	4	 	 	 	12	 	 	 	1	 	 	 	10	 	 	 	12	 	 	 	31	 	 	 	44	 	
 	 				 				 				 				 				 				 				 				
Income excluding net realized gains (losses) (2)	 	$	443	 	 	$	455	 	 	$	168	 	 	$	29	 	 	$	391	 	 	$	898	 	 	$	806	 	 	$	1,006	 	
 	 				 				 				 				 				 				 				 				
% Change versus prior year period (1) 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written	 	 	2	%	 	 	6	%	 	 	13	%	 	 	23	%	 	 	23	%	 	 	4	%	 	 	24	%	 	 	21	%	
Net premiums earned	 	 	7	%	 	 	16	%	 	 	17	%	 	 	24	%	 	 	23	%	 	 	11	%	 	 	25	%	 	 	23	%	
									
Other ratios	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	 	 	69	%	 	 	73	%	 	 	72	%	 	 	69	%	 	 	70	%	 	 	71	%	 	 	71	%	 	 	70	%	
Effective tax rate on income excluding net realized gains (losses)	 	 	21	%	 	 	21	%	 	 	-34	%	 	 	65	%	 	 	23	%	 	 	21	%	 	 	21	%	 	 	19	%	

(1)	Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. This is a Non-GAAP measure. See pages 7 and 8 for a reconciliation to GAAP.	
(2)	See page 27 Non-GAAP Financial Measures. 	
*	Calculated using income excluding net realized gains (losses). 	

Consolidated Results	  	Page 2	

					
	 	ACE Limited
Consolidated Results -Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
ACE Limited Consolidated

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	64.4	%	 	 	63.5	%	 	 	78.1	%	 	 	79.8	%	 	 	63.2	%	 	 	63.9	%	 	 	61.8	%	 	 	70.6	%	
Policy acquisition cost ratio	  	 	14.8	%	 	 	13.6	%	 	 	14.4	%	 	 	13.8	%	 	 	14.3	%	 	 	14.2	%	 	 	14.2	%	 	 	14.2	%	
Administrative expense ratio	  	 	11.0	%	 	 	11.9	%	 	 	11.9	%	 	 	10.9	%	 	 	11.2	%	 	 	11.4	%	 	 	11.8	%	 	 	11.6	%	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	90.2	%	 	 	89.0	%	 	 	104.4	%	 	 	104.5	%	 	 	88.7	%	 	 	89.5	%	 	 	87.8	%	 	 	96.4	%	

Property and Casualty (1) 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	64.0	%	 	 	62.5	%	 	 	77.2	%	 	 	78.7	%	 	 	63.1	%	 	 	63.3	%	 	 	62.2	%	 	 	70.4	%	
Policy acquisition cost ratio	  	 	15.3	%	 	 	14.0	%	 	 	14.9	%	 	 	14.3	%	 	 	14.7	%	 	 	14.6	%	 	 	14.7	%	 	 	14.7	%	
Administrative expense ratio	  	 	11.1	%	 	 	12.1	% (2)	 	 	12.2	%	 	 	11.2	%	 	 	11.3	%	 	 	11.6	%	 	 	11.8	%	 	 	11.8	%	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	90.4	%	 	 	88.6	%	 	 	104.3	%	 	 	104.2	%	 	 	89.1	%	 	 	89.5	%	 	 	88.7	%	 	 	96.9	%	
 	  				 				 				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Asbestos, environmental and other run-off losses	  	$	—  	 	 	$	—  	 	 	$	465	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	465	 	
Catastrophe and other large losses	  	$	—  	 	 	$	3	 	 	$	31	 	 	$	457	 	 	$	—  	 	 	$	3	 	 	$	—  	 	 	$	488	 	
Prior period development (3)	  	$	27	 	 	$	29	 	 	$	109	 	 	$	12	 	 	$	25	 	 	$	56	 	 	$	19	 	 	$	140	 	

(1)	Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.	
(2)	Includes $30M of legal expenses related to the investigations.	
(3)	See Financial Services schedule for prior period development related to that segment.	

Consolidated Results 2	  	Page 3	

					
	 	ACE Limited
Consolidated Results - Consecutive Quarters - 3
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
ACE Limited Consolidated

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	 	Full Year
2002
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Property and Casualty (1)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	4,157	 	 	$	3,331	 	 	$	3,296	 	 	$	3,242	 	 	$	3,533	 	 	$	13,402	 	 	$	11,116	 	
Net premiums written	  	 	2,961	 	 	 	2,273	 	 	 	2,153	 	 	 	2,275	 	 	 	2,354	 	 	 	9,055	 	 	 	6,536	 	
Net premiums earned	  	 	2,358	 	 	 	2,342	 	 	 	2,162	 	 	 	2,113	 	 	 	1,839	 	 	 	8,456	 	 	 	5,652	 	
Losses and loss expenses	  	 	1,444	 	 	 	1,431	 	 	 	1,387	 	 	 	1,337	 	 	 	1,129	 	 	 	5,284	 	 	 	4,061	 	
Policy acquisition costs	  	 	349	 	 	 	357	 	 	 	321	 	 	 	314	 	 	 	281	 	 	 	1,273	 	 	 	872	 	
Administrative expenses	  	 	292	 	 	 	313	 	 	 	272	 	 	 	278	 	 	 	239	 	 	 	1,102	 	 	 	856	 	
 	  				 				 				 				 				 				 				
P& C underwriting income (loss)	  	$	273	 	 	$	241	 	 	$	182	 	 	$	184	 	 	$	190	 	 	$	797	 	 	$	(137	)	
								
Financial Services underwriting income (loss)	  	 	58	 	 	 	5	 	 	 	13	 	 	 	19	 	 	 	21	 	 	 	58	 	 	 	53	 	
Life underwriting income (loss) excluding investment income	  	 	3	 	 	 	(2	)	 	 	(4	)	 	 	(5	)	 	 	(5	)	 	 	(16	)	 	 	(22	)	
Net investment income	  	 	248	 	 	 	242	 	 	 	223	 	 	 	224	 	 	 	211	 	 	 	900	 	 	 	812	 	
Net realized gains (losses)	  	 	57	 	 	 	127	 	 	 	56	 	 	 	116	 	 	 	(40	)	 	 	259	 	 	 	(489	)	
Interest expense	  	 	44	 	 	 	45	 	 	 	44	 	 	 	43	 	 	 	45	 	 	 	177	 	 	 	193	 	
Other (income) expense	  	 	17	 	 	 	21	 	 	 	4	 	 	 	1	 	 	 	8	 	 	 	34	 	 	 	36	 	
Income tax expense (benefit)	  	 	124	 	 	 	87	 	 	 	68	 	 	 	97	 	 	 	59	 	 	 	311	 	 	 	(112	)	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	454	 	 	$	460	 	 	$	354	 	 	$	397	 	 	$	265	 	 	$	1,476	 	 	$	100	 	
								
Net realized gains (losses)	  	 	57	 	 	 	127	 	 	 	56	 	 	 	116	 	 	 	(40	)	 	 	259	 	 	 	(489	)	
Tax expense on net realized gains (losses)	  	 	21	 	 	 	12	 	 	 	6	 	 	 	22	 	 	 	(8	)	 	 	32	 	 	 	(72	)	
 	  				 				 				 				 				 				 				
Income excluding net realized gains (losses) (2)	  	$	418	 	 	$	345	 	 	$	304	 	 	$	303	 	 	$	297	 	 	$	1,249	 	 	$	517	 	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	60.3	%	 	 	66.0	%	 	 	65.0	%	 	 	64.2	%	 	 	62.7	%	 	 	64.6	%	 	 	73.7	%	
Policy acquisition cost ratio	  	 	14.2	%	 	 	13.2	%	 	 	14.3	%	 	 	14.2	%	 	 	14.4	%	 	 	14.0	%	 	 	14.0	%	
Administrative expense ratio	  	 	12.5	%	 	 	12.0	%	 	 	12.4	%	 	 	12.8	%	 	 	12.6	%	 	 	12.4	%	 	 	13.5	%	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	87.0	%	 	 	91.2	%	 	 	91.7	%	 	 	91.2	%	 	 	89.7	%	 	 	91.0	%	 	 	101.2	%	
 	  				 				 				 				 				 				 				
Property and Casualty (1)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
								
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	61.2	%	 	 	61.1	%	 	 	64.2	%	 	 	63.3	%	 	 	61.4	%	 	 	62.5	%	 	 	71.9	%	
Policy acquisition cost ratio	  	 	14.8	%	 	 	15.2	%	 	 	14.9	%	 	 	14.9	%	 	 	15.3	%	 	 	15.1	%	 	 	15.4	%	
Administrative expense ratio	  	 	12.4	%	 	 	13.4	%	 	 	12.6	%	 	 	13.1	%	 	 	13.0	%	 	 	13.0	%	 	 	15.1	%	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	88.4	%	 	 	89.7	%	 	 	91.7	%	 	 	91.3	%	 	 	89.7	%	 	 	90.6	%	 	 	102.4	%	

(1)	Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. 	
(2)	See page 27 Non-GAAP Financial Measures. 	

Consolidated Results 3	  	Page 4	

					
	 	ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)	 	 	

 	  	June 30
2005
	  	March 31
2005
	  	December 31
2004
	
 	  	(Unaudited)	  	(Unaudited)	  	(Unaudited)	
 	  	 	  	(Restated)	  	(Restated)	
Assets	  	 	 	  	 	 	  	 	 	
Fixed maturities available for sale, at fair value	  	$	21,217	  	$	20,418	  	$	22,976	
Fixed maturities held to maturity, at amortized cost	  	 	3,151	  	 	3,211	  	 	—  	
Equity securities, at fair value	  	 	1,380	  	 	1,351	  	 	1,265	
Short-term investments	  	 	2,521	  	 	2,198	  	 	2,201	
Other investments	  	 	628	  	 	622	  	 	606	
 	  			  			  			
Total investments	  	 	28,897	  	 	27,800	  	 	27,048	
				
Cash	  	 	651	  	 	574	  	 	507	
Securities lending collateral	  	 	958	  	 	1,255	  	 	1,059	
Insurance and reinsurance balances receivable	  	 	3,728	  	 	3,695	  	 	3,255	
Reinsurance recoverable	  	 	14,432	  	 	14,273	  	 	14,887	
Deferred policy acquisition costs	  	 	990	  	 	999	  	 	944	
Prepaid reinsurance premiums	  	 	1,434	  	 	1,427	  	 	1,355	
Goodwill	  	 	2,699	  	 	2,691	  	 	2,695	
Deferred tax assets	  	 	1,134	  	 	1,178	  	 	1,173	
Investments in partially owned insurance companies	  	 	832	  	 	816	  	 	796	
Other assets	  	 	2,365	  	 	2,297	  	 	2,534	
 	  			  			  			
Total assets	  	$	58,120	  	$	57,005	  	$	56,253	
 	  			  			  			
Liabilities	  	 	 	  	 	 	  	 	 	
Unpaid losses and loss expenses	  	$	32,101	  	$	31,426	  	$	31,483	
Unearned premiums	  	 	6,457	  	 	6,527	  	 	5,983	
Future policy benefits for life and annuity contracts	  	 	517	  	 	507	  	 	509	
Insurance and reinsurance balances payable	  	 	2,438	  	 	2,290	  	 	2,337	
Deposit liabilities	  	 	347	  	 	302	  	 	343	
Securities lending payable	  	 	958	  	 	1,255	  	 	1,059	
Payable for investments purchased	  	 	785	  	 	630	  	 	579	
Accounts payable, accrued expenses and other liabilities	  	 	1,613	  	 	1,694	  	 	1,710	
Short-term debt	  	 	147	  	 	147	  	 	146	
Long-term debt	  	 	1,849	  	 	1,849	  	 	1,849	
Trust preferred securities	  	 	412	  	 	412	  	 	412	
 	  			  			  			
Total liabilities	  	 	47,624	  	 	47,039	  	 	46,410	
				
Shareholders’ equity	  	 	 	  	 	 	  	 	 	
Total shareholders’ equity, excl. AOCI	  	 	9,947	  	 	9,522	  	 	9,111	
Accumulated other comprehensive income (AOCI)	  	 	549	  	 	444	  	 	732	
 	  			  			  			
Total shareholders’ equity	  	 	10,496	  	 	9,966	  	 	9,843	
 	  			  			  			
Total liabilities and shareholders’ equity	  	$	58,120	  	$	57,005	  	$	56,253	
 	  			  			  			
Diluted book value per ordinary share (1) 	  	$	34.28	  	$	32.63	  	$	32.50	
Diluted tangible book value per ordinary share (1) 	  	$	25.39	  	$	23.56	  	$	23.38	

(1)	See page 27 Non-GAAP Financial Measures.	

Consol Bal Sheet	  	Page 5	

					
	 	ACE Limited
Consolidated Premiums by Line of Business
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
ACE Limited Consolidated

 	  	2Q-05
	  	% of
Total
Consolidated
	 	 	2Q-04
	  	% of
Total
Consolidated
	 	 	% Change
2Q-05 vs.
2Q-04
	 	 	YTD
2005
	  	% of
Total
Consolidated
	 	 	YTD
2004
	  	% of
Total
Consolidated
	 	 	% Change
YTD-05 vs.
YTD-04
	 	
 	  	 	  	 	 	 	(Restated)	  	 	 	 	 	 	 	 	  	 	 	 	(Restated)	  	 	 	 	 	 	
Net premiums written	  	 	 	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	 	 	
Property and all other	  	$	859	  	29	%	 	$	995	  	35	%	 	-14	%	 	$	1,911	  	30	%	 	$	2,004	  	33	%	 	-5	%	
Casualty	  	 	1,655	  	57	%	 	 	1,500	  	52	%	 	10	%	 	 	3,420	  	55	%	 	 	3,169	  	52	%	 	8	%	
Personal accident	  	 	323	  	11	%	 	 	298	  	10	%	 	8	%	 	 	653	  	10	%	 	 	581	  	9	%	 	12	%	
 	  			  			 			  			 			 			  			 			  			 			
Total P&C	  	 	2,837	  	97	%	 	 	2,793	  	97	%	 	2	%	 	 	5,984	  	95	%	 	 	5,754	  	94	%	 	4	%	
 	  			  			 			  			 			 			  			 			  			 			
Global Re - life	  	 	57	  	2	%	 	 	55	  	2	%	 	4	%	 	 	115	  	2	%	 	 	106	  	2	%	 	8	%	
Financial Services	  	 	15	  	1	%	 	 	13	  	1	%	 	15	%	 	 	176	  	3	%	 	 	221	  	4	%	 	-20	%	
 	  			  			 			  			 			 			  			 			  			 			
Total Consolidated	  	$	2,909	  	100	%	 	$	2,861	  	100	%	 	2	%	 	$	6,275	  	100	%	 	$	6,081	  	100	%	 	3	%	
 	  			  			 			  			 			 			  			 			  			 			
Net premiums earned	  	 	 	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	 	 	
Property and all other	  	$	871	  	30	%	 	$	885	  	32	%	 	-2	%	 	$	1,745	  	30	%	 	$	1,655	  	31	%	 	5	%	
Casualty	  	 	1,588	  	54	%	 	 	1,418	  	51	%	 	12	%	 	 	3,144	  	54	%	 	 	2,750	  	51	%	 	14	%	
Personal accident	  	 	313	  	11	%	 	 	291	  	10	%	 	8	%	 	 	612	  	11	%	 	 	546	  	10	%	 	12	%	
 	  			  			 			  			 			 			  			 			  			 			
Total P&C	  	 	2,772	  	95	%	 	 	2,594	  	93	%	 	7	%	 	 	5,501	  	95	%	 	 	4,951	  	92	%	 	11	%	
 	  			  			 			  			 			 			  			 			  			 			
Global Re - life	  	 	57	  	2	%	 	 	54	  	2	%	 	6	%	 	 	115	  	2	%	 	 	105	  	2	%	 	10	%	
Financial Services	  	 	92	  	3	%	 	 	134	  	5	%	 	-31	%	 	 	182	  	3	%	 	 	313	  	6	%	 	-42	%	
 	  			  			 			  			 			 			  			 			  			 			
Total Consolidated	  	$	2,921	  	100	%	 	$	2,782	  	100	%	 	5	%	 	$	5,798	  	100	%	 	$	5,369	  	100	%	 	8	%	

			
Line of Business	  	Page 6	

					
	 	ACE Limited
Consolidating Statement of Operations
Three months ended June 30, 2005 and 2004
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	Insurance -
North
American
	  	Insurance -
Overseas
General
	  	Global
Reinsurance
	  	Corporate
& Other
	 	 	Consolidated
P&C
	  	Financial
Services
	 	 	ACE
Consolidated
	 	
June 30, 2005	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross premiums written	  	$	2,344	  	$	1,428	  	$	369	  	$	—  	 	 	$	4,141	  	$	15	 	 	$	4,156	 	
Net premiums written	  	 	1,412	  	 	1,062	  	 	363	  	 	—  	 	 	 	2,837	  	 	15	 	 	 	2,852	 	
Net premiums earned	  	 	1,319	  	 	1,081	  	 	372	  	 	—  	 	 	 	2,772	  	 	92	 	 	 	2,864	 	
Losses and loss expenses	  	 	948	  	 	610	  	 	206	  	 	10	 	 	 	1,774	  	 	70	 	 	 	1,844	 	
Policy acquisition costs	  	 	130	  	 	217	  	 	77	  	 	—  	 	 	 	424	  	 	1	 	 	 	425	 	
Administrative expenses	  	 	111	  	 	142	  	 	16	  	 	39	 	 	 	308	  	 	7	 	 	 	315	 	
 	  			  			  			  				 			  				 				
Underwriting income (loss)	  	 	130	  	 	112	  	 	73	  	 	(49	)	 	 	266	  	 	14	 	 	 	280	 	
								
Life underwriting income (includes investment income)	  	 	—  	  	 	—  	  	 	25	  	 	—  	 	 	 	25	  	 	—  	 	 	 	25	 	
Net investment income - property and casualty	  	 	142	  	 	80	  	 	40	  	 	3	 	 	 	265	  	 	30	 	 	 	295	 	
Net realized gains (losses)	  	 	14	  	 	34	  	 	33	  	 	(52	)	 	 	29	  	 	3	 	 	 	32	 	
Interest expense	  	 	5	  	 	—  	  	 	—  	  	 	38	 	 	 	43	  	 	—  	 	 	 	43	 	
Other (income) expense	  	 	1	  	 	5	  	 	1	  	 	—  	 	 	 	7	  	 	(13	)	 	 	(6	)	
Income tax expense (benefit)	  	 	81	  	 	48	  	 	9	  	 	(17	)	 	 	121	  	 	7	 	 	 	128	 	
 	  			  			  			  				 			  				 				
Net income (loss)	  	 	199	  	 	173	  	 	161	  	 	(119	)	 	 	414	  	 	53	 	 	 	467	 	
								
Net realized gains (losses)	  	 	14	  	 	34	  	 	33	  	 	(52	)	 	 	29	  	 	3	 	 	 	32	 	
Tax expense (benefit) on net realized gains (losses)	  	 	2	  	 	7	  	 	—  	  	 	—  	 	 	 	9	  	 	(1	)	 	 	8	 	
 	  			  			  			  				 			  				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	187	  	$	146	  	$	128	  	$	(67	)	 	$	394	  	$	49	 	 	$	443	 	
 	  			  			  			  				 			  				 				
June 30, 2004 (Restated)	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross premiums written	  	$	2,102	  	$	1,501	  	$	368	  	$	—  	 	 	$	3,971	  	$	15	 	 	$	3,986	 	
Net premiums written	  	 	1,330	  	 	1,098	  	 	365	  	 	—  	 	 	 	2,793	  	 	13	 	 	 	2,806	 	
Net premiums earned	  	 	1,178	  	 	1,069	  	 	347	  	 	—  	 	 	 	2,594	  	 	134	 	 	 	2,728	 	
Losses and loss expenses	  	 	836	  	 	627	  	 	173	  	 	—  	 	 	 	1,636	  	 	90	 	 	 	1,726	 	
Policy acquisition costs	  	 	112	  	 	195	  	 	74	  	 	—  	 	 	 	381	  	 	9	 	 	 	390	 	
Administrative expenses	  	 	110	  	 	139	  	 	16	  	 	29	 	 	 	294	  	 	9	 	 	 	303	 	
 	  			  			  			  				 			  				 				
Underwriting income (loss)	  	 	120	  	 	108	  	 	84	  	 	(29	)	 	 	283	  	 	26	 	 	 	309	 	
								
Life underwriting income (includes investment income)	  	 	—  	  	 	—  	  	 	11	  	 	—  	 	 	 	11	  	 	—  	 	 	 	11	 	
Net investment income - property and casualty	  	 	110	  	 	58	  	 	29	  	 	2	 	 	 	199	  	 	36	 	 	 	235	 	
Net realized gains (losses)	  	 	30	  	 	3	  	 	12	  	 	29	 	 	 	74	  	 	(32	)	 	 	42	 	
Interest expense	  	 	5	  	 	—  	  	 	—  	  	 	40	 	 	 	45	  	 	1	 	 	 	46	 	
Other (income) expense	  	 	3	  	 	4	  	 	—  	  	 	(1	)	 	 	6	  	 	(7	)	 	 	(1	)	
Income tax expense (benefit)	  	 	71	  	 	60	  	 	1	  	 	(14	)	 	 	118	  	 	11	 	 	 	129	 	
 	  			  			  			  				 			  				 				
Net income (loss)	  	 	181	  	 	105	  	 	135	  	 	(23	)	 	 	398	  	 	25	 	 	 	423	 	
								
Net realized gains (losses)	  	 	30	  	 	3	  	 	12	  	 	29	 	 	 	74	  	 	(32	)	 	 	42	 	
Tax expense (benefit) on net realized gains (losses)	  	 	8	  	 	1	  	 	—  	  	 	—  	 	 	 	9	  	 	1	 	 	 	10	 	
 	  			  			  			  				 			  				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	159	  	$	103	  	$	123	  	$	(52	)	 	$	333	  	$	58	 	 	$	391	 	

(1)	See page 27 Non-GAAP Financial Measures.	

Segment 2005 Qtr	  	Page 7	

					
	 	ACE Limited
Consolidating Statement of Operations
Six months ended June 30, 2005 and 2004
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	Insurance -
North
American
	 	 	Insurance -
Overseas
General
	  	Global
Reinsurance
	  	Corporate
& Other
	 	 	Consolidated
P&C
	  	Financial
Services
	 	 	ACE
Consolidated
	 	
June 30, 2005	  	 	 	 	 	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross premiums written	  	$	4,494	 	 	$	3,064	  	$	905	  	$	—  	 	 	$	8,463	  	$	178	 	 	$	8,641	 	
Net premiums written	  	 	2,837	 	 	 	2,257	  	 	890	  	 	—  	 	 	 	5,984	  	 	176	 	 	 	6,160	 	
Net premiums earned	  	 	2,604	 	 	 	2,169	  	 	728	  	 	—  	 	 	 	5,501	  	 	182	 	 	 	5,683	 	
Losses and loss expenses	  	 	1,840	 	 	 	1,220	  	 	411	  	 	9	 	 	 	3,480	  	 	153	 	 	 	3,633	 	
Policy acquisition costs	  	 	247	 	 	 	409	  	 	150	  	 	—  	 	 	 	806	  	 	3	 	 	 	809	 	
Administrative expenses	  	 	222	 	 	 	290	  	 	31	  	 	95	 	 	 	638	  	 	11	 	 	 	649	 	
 	  				 			  			  				 			  				 				
Underwriting income (loss)	  	 	295	 	 	 	250	  	 	136	  	 	(104	)	 	 	577	  	 	15	 	 	 	592	 	
								
Life underwriting income (includes investment income)	  	 	—  	 	 	 	—  	  	 	51	  	 	—  	 	 	 	51	  	 	—  	 	 	 	51	 	
Net investment income - property and casualty	  	 	273	 	 	 	154	  	 	79	  	 	3	 	 	 	509	  	 	62	 	 	 	571	 	
Net realized gains (losses)	  	 	3	 	 	 	52	  	 	11	  	 	(57	)	 	 	9	  	 	9	 	 	 	18	 	
Interest expense	  	 	10	 	 	 	—  	  	 	1	  	 	74	 	 	 	85	  	 	—  	 	 	 	85	 	
Other (income) expense	  	 	1	 	 	 	11	  	 	2	  	 	—  	 	 	 	14	  	 	(25	)	 	 	(11	)	
Income tax expense (benefit)	  	 	161	 	 	 	100	  	 	18	  	 	(38	)	 	 	241	  	 	13	 	 	 	254	 	
 	  				 			  			  				 			  				 				
Net income (loss)	  	 	399	 	 	 	345	  	 	256	  	 	(194	)	 	 	806	  	 	98	 	 	 	904	 	
								
Net realized gains (losses)	  	 	3	 	 	 	52	  	 	11	  	 	(57	)	 	 	9	  	 	9	 	 	 	18	 	
Tax expense (benefit) on net realized gains (losses)	  	 	(1	)	 	 	12	  	 	—  	  	 	—  	 	 	 	11	  	 	1	 	 	 	12	 	
 	  				 			  			  				 			  				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	395	 	 	$	305	  	$	245	  	$	(137	)	 	$	808	  	$	90	 	 	$	898	 	
 	  				 			  			  				 			  				 				
June 30, 2004 (Restated)	  	 	 	 	 	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross premiums written	  	$	4,007	 	 	$	3,174	  	$	947	  	$	—  	 	 	$	8,128	  	$	223	 	 	$	8,351	 	
Net premiums written	  	 	2,541	 	 	 	2,276	  	 	937	  	 	—  	 	 	 	5,754	  	 	221	 	 	 	5,975	 	
Net premiums earned	  	 	2,185	 	 	 	2,088	  	 	679	  	 	—  	 	 	 	4,952	  	 	313	 	 	 	5,265	 	
Losses and loss expenses	  	 	1,534	 	 	 	1,213	  	 	333	  	 	—  	 	 	 	3,080	  	 	175	 	 	 	3,255	 	
Policy acquisition costs	  	 	212	 	 	 	380	  	 	138	  	 	—  	 	 	 	730	  	 	20	 	 	 	750	 	
Administrative expenses	  	 	213	 	 	 	277	  	 	34	  	 	62	 	 	 	586	  	 	34	 	 	 	620	 	
 	  				 			  			  				 			  				 				
Underwriting income (loss)	  	 	226	 	 	 	218	  	 	174	  	 	(62	)	 	 	556	  	 	84	 	 	 	640	 	
								
Life underwriting income (includes investment income)	  	 	—  	 	 	 	—  	  	 	22	  	 	—  	 	 	 	22	  	 	—  	 	 	 	22	 	
Net investment income - property and casualty	  	 	220	 	 	 	108	  	 	56	  	 	2	 	 	 	386	  	 	89	 	 	 	475	 	
Net realized gains (losses)	  	 	82	 	 	 	27	  	 	2	  	 	15	 	 	 	126	  	 	(27	)	 	 	99	 	
Interest expense	  	 	10	 	 	 	—  	  	 	—  	  	 	77	 	 	 	87	  	 	3	 	 	 	90	 	
Other (income) expense	  	 	6	 	 	 	7	  	 	—  	  	 	(1	)	 	 	12	  	 	4	 	 	 	16	 	
Income tax expense (benefit)	  	 	134	 	 	 	111	  	 	4	  	 	(27	)	 	 	227	  	 	31	 	 	 	253	 	
 	  				 			  			  				 			  				 				
Net income (loss)	  	 	378	 	 	 	235	  	 	250	  	 	(94	)	 	 	769	  	 	108	 	 	 	877	 	
								
Net realized gains (losses)	  	 	82	 	 	 	27	  	 	2	  	 	15	 	 	 	126	  	 	(27	)	 	 	99	 	
Tax expense (benefit) on net realized gains (losses)	  	 	15	 	 	 	8	  	 	—  	  	 	—  	 	 	 	23	  	 	8	 	 	 	31	 	
 	  				 			  			  				 			  				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	311	 	 	$	216	  	$	248	  	$	(109	)	 	$	666	  	$	143	 	 	$	809	 	

(1)	See page 27 Non-GAAP Financial Measures.	

Segment 2005 YTD	  	Page 8	

					
	 	ACE Limited
Segment Results -Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Insurance - North American

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	2,344	 	 	$	2,150	 	 	$	1,885	 	 	$	2,234	 	 	$	2,102	 	 	$	4,494	 	 	$	4,007	 	 	$	8,126	 	
Net premiums written	  	 	1,412	 	 	 	1,425	 	 	 	1,194	 	 	 	1,366	 	 	 	1,330	 	 	 	2,837	 	 	 	2,541	 	 	 	5,101	 	
Net premiums earned	  	 	1,319	 	 	 	1,285	 	 	 	1,243	 	 	 	1,251	 	 	 	1,178	 	 	 	2,604	 	 	 	2,185	 	 	 	4,679	 	
Losses and loss expenses	  	 	948	 	 	 	892	 	 	 	1,354	 	 	 	1,010	 	 	 	836	 	 	 	1,840	 	 	 	1,534	 	 	 	3,898	 	
Policy acquisition costs	  	 	130	 	 	 	117	 	 	 	114	 	 	 	121	 	 	 	112	 	 	 	247	 	 	 	212	 	 	 	447	 	
Administrative expenses	  	 	111	 	 	 	111	 	 	 	128	 	 	 	110	 	 	 	110	 	 	 	222	 	 	 	213	 	 	 	451	 	
 	  				 				 				 				 				 				 				 				
Underwriting income (loss)	  	 	130	 	 	 	165	 	 	 	(353	)	 	 	10	 	 	 	120	 	 	 	295	 	 	 	226	 	 	 	(117	)	
									
Net investment income	  	 	142	 	 	 	131	 	 	 	132	 	 	 	123	 	 	 	110	 	 	 	273	 	 	 	220	 	 	 	475	 	
Net realized gains (losses)	  	 	14	 	 	 	(11	)	 	 	35	 	 	 	9	 	 	 	30	 	 	 	3	 	 	 	82	 	 	 	126	 	
Interest expense	  	 	5	 	 	 	5	 	 	 	5	 	 	 	6	 	 	 	5	 	 	 	10	 	 	 	10	 	 	 	21	 	
Other (income) expense	  	 	1	 	 	 	—  	 	 	 	2	 	 	 	(3	)	 	 	3	 	 	 	1	 	 	 	6	 	 	 	5	 	
Income tax expense (benefit)	  	 	81	 	 	 	80	 	 	 	(96	)	 	 	44	 	 	 	71	 	 	 	161	 	 	 	134	 	 	 	82	 	
 	  				 				 				 				 				 				 				 				
Net income (loss)	  	 	199	 	 	 	200	 	 	 	(97	)	 	 	95	 	 	 	181	 	 	 	399	 	 	 	378	 	 	 	376	 	
									
Net realized gains (losses)	  	 	14	 	 	 	(11	)	 	 	35	 	 	 	9	 	 	 	30	 	 	 	3	 	 	 	82	 	 	 	126	 	
Tax expense on net realized gains (losses)	  	 	2	 	 	 	(3	)	 	 	5	 	 	 	2	 	 	 	8	 	 	 	(1	)	 	 	15	 	 	 	22	 	
 	  				 				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	187	 	 	$	208	 	 	$	(127	)	 	$	88	 	 	$	159	 	 	$	395	 	 	$	311	 	 	$	272	 	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	71.9	%	 	 	69.4	%	 	 	109.0	%	 	 	80.7	%	 	 	71.0	%	 	 	70.7	%	 	 	70.2	%	 	 	83.3	%	
Policy acquisition cost ratio	  	 	9.8	%	 	 	9.1	%	 	 	9.1	%	 	 	9.7	%	 	 	9.5	%	 	 	9.5	%	 	 	9.7	%	 	 	9.6	%	
Administrative expense ratio	  	 	8.4	%	 	 	8.6	%	 	 	10.3	%	 	 	8.7	%	 	 	9.4	%	 	 	8.5	%	 	 	9.8	%	 	 	9.6	%	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	90.1	%	 	 	87.1	%	 	 	128.4	%	 	 	99.1	%	 	 	89.9	%	 	 	88.7	%	 	 	89.7	%	 	 	102.5	%	
 	  				 				 				 				 				 				 				 				
Large losses and other items (before tax)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Asbestos, environmental and other run-off losses	  	$	—  	 	 	$	—  	 	 	$	459	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	459	 	
Catastrophe losses (before tax)	  	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	126	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	126	 	
Prior period development	  	$	51	 	 	$	22	 	 	$	96	 	 	$	42	 	 	$	42	 	 	$	73	 	 	$	57	 	 	$	195	 	
									
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written	  	 	6	%	 	 	18	%	 	 	12	%	 	 	28	%	 	 	36	%	 	 	12	%	 	 	33	%	 	 	26	%	
Net premiums earned	  	 	12	%	 	 	28	%	 	 	23	%	 	 	26	%	 	 	27	%	 	 	19	%	 	 	30	%	 	 	27	%	
									
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	60	%	 	 	66	%	 	 	63	%	 	 	61	%	 	 	63	%	 	 	63	%	 	 	63	%	 	 	63	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Insurance-North American	  	Page 9	

					
	 	ACE Limited
Segment Results -Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Insurance - North American

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	 	Full Year
2002
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	1,905	 	 	$	1,764	 	 	$	1,819	 	 	$	1,648	 	 	$	1,664	 	 	$	6,895	 	 	$	6,115	 	
Net premiums written	  	 	1,211	 	 	 	1,070	 	 	 	1,066	 	 	 	979	 	 	 	935	 	 	 	4,050	 	 	 	2,921	 	
Net premiums earned	  	 	1,007	 	 	 	1,013	 	 	 	991	 	 	 	931	 	 	 	754	 	 	 	3,689	 	 	 	2,477	 	
Losses and loss expenses	  	 	698	 	 	 	648	 	 	 	726	 	 	 	644	 	 	 	523	 	 	 	2,541	 	 	 	2,222	 	
Policy acquisition costs	  	 	100	 	 	 	102	 	 	 	95	 	 	 	100	 	 	 	83	 	 	 	380	 	 	 	216	 	
Administrative expenses	  	 	103	 	 	 	109	 	 	 	103	 	 	 	103	 	 	 	87	 	 	 	402	 	 	 	342	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	 	106	 	 	 	154	 	 	 	67	 	 	 	84	 	 	 	61	 	 	 	366	 	 	 	(303	)	
								
Net investment income	  	 	110	 	 	 	105	 	 	 	102	 	 	 	103	 	 	 	105	 	 	 	415	 	 	 	409	 	
Net realized gains (losses)	  	 	52	 	 	 	24	 	 	 	7	 	 	 	34	 	 	 	(18	)	 	 	47	 	 	 	(199	)	
Interest expense	  	 	5	 	 	 	4	 	 	 	6	 	 	 	5	 	 	 	6	 	 	 	21	 	 	 	22	 	
Other (income) expense	  	 	3	 	 	 	7	 	 	 	1	 	 	 	—  	 	 	 	6	 	 	 	14	 	 	 	(1	)	
Income tax expense (benefit)	  	 	63	 	 	 	70	 	 	 	43	 	 	 	47	 	 	 	34	 	 	 	194	 	 	 	(51	)	
 	  				 				 				 				 				 				 				
Net income (loss)	  	 	197	 	 	 	202	 	 	 	126	 	 	 	169	 	 	 	102	 	 	 	599	 	 	 	(63	)	
								
Net realized gains (losses)	  	 	52	 	 	 	24	 	 	 	7	 	 	 	34	 	 	 	(18	)	 	 	47	 	 	 	(199	)	
Tax expense on net realized gains (losses)	  	 	7	 	 	 	—  	 	 	 	—  	 	 	 	3	 	 	 	(3	)	 	 	—  	 	 	 	(43	)	
 	  				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	152	 	 	$	178	 	 	$	119	 	 	$	138	 	 	$	117	 	 	$	552	 	 	$	93	 	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	69.3	%	 	 	64.0	%	 	 	73.2	%	 	 	69.3	%	 	 	69.3	%	 	 	68.9	%	 	 	89.7	%	
Policy acquisition cost ratio	  	 	10.0	%	 	 	10.0	%	 	 	9.6	%	 	 	10.8	%	 	 	11.0	%	 	 	10.3	%	 	 	8.7	%	
Administrative expense ratio	  	 	10.3	%	 	 	10.8	%	 	 	10.4	%	 	 	11.0	%	 	 	11.6	%	 	 	10.9	%	 	 	13.8	%	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	89.6	%	 	 	84.8	%	 	 	93.2	%	 	 	91.1	%	 	 	91.9	%	 	 	90.1	%	 	 	112.2	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Insurance-North American 2	  	Page 10	

					
	 	ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Insurance - Overseas General

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD 2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	1,428	 	 	$	1,636	 	 	$	1,391	 	 	$	1,292	 	 	$	1,501	 	 	$	3,064	 	 	$	3,174	 	 	$	5,857	 	
Net premiums written	  	 	1,062	 	 	 	1,195	 	 	 	1,085	 	 	 	980	 	 	 	1,098	 	 	 	2,257	 	 	 	2,276	 	 	 	4,341	 	
Net premiums earned	  	 	1,081	 	 	 	1,088	 	 	 	1,128	 	 	 	1,086	 	 	 	1,069	 	 	 	2,169	 	 	 	2,088	 	 	 	4,302	 	
Losses and loss expenses	  	 	610	 	 	 	610	 	 	 	544	 	 	 	652	 	 	 	627	 	 	 	1,220	 	 	 	1,213	 	 	 	2,409	 	
Policy acquisition costs	  	 	217	 	 	 	192	 	 	 	223	 	 	 	199	 	 	 	195	 	 	 	409	 	 	 	380	 	 	 	802	 	
Administrative expenses	  	 	142	 	 	 	148	 	 	 	135	 	 	 	139	 	 	 	139	 	 	 	290	 	 	 	277	 	 	 	551	 	
 	  				 				 				 				 				 				 				 				
Underwriting income	  	$	112	 	 	$	138	 	 	$	226	 	 	$	96	 	 	$	108	 	 	$	250	 	 	$	218	 	 	$	540	 	
									
Net investment income	  	 	80	 	 	 	74	 	 	 	65	 	 	 	51	 	 	 	58	 	 	 	154	 	 	 	108	 	 	 	224	 	
Net realized gains (losses)	  	 	34	 	 	 	18	 	 	 	18	 	 	 	2	 	 	 	3	 	 	 	52	 	 	 	27	 	 	 	47	 	
Interest expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Other (income) expense	  	 	5	 	 	 	6	 	 	 	15	 	 	 	3	 	 	 	4	 	 	 	11	 	 	 	7	 	 	 	25	 	
Income tax expense	  	 	48	 	 	 	52	 	 	 	86	 	 	 	38	 	 	 	60	 	 	 	100	 	 	 	111	 	 	 	235	 	
 	  				 				 				 				 				 				 				 				
Net income	  	$	173	 	 	$	172	 	 	$	208	 	 	$	108	 	 	$	105	 	 	$	345	 	 	$	235	 	 	$	551	 	
									
Net realized gains (losses)	  	 	34	 	 	 	18	 	 	 	18	 	 	 	2	 	 	 	3	 	 	 	52	 	 	 	27	 	 	 	47	 	
Tax expense on net realized gains (losses)	  	 	7	 	 	 	5	 	 	 	5	 	 	 	1	 	 	 	1	 	 	 	12	 	 	 	8	 	 	 	14	 	
 	  				 				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	146	 	 	$	159	 	 	$	195	 	 	$	107	 	 	$	103	 	 	$	305	 	 	$	216	 	 	$	518	 	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	56.4	%	 	 	56.1	%	 	 	48.2	%	 	 	60.0	%	 	 	58.6	%	 	 	56.2	%	 	 	58.1	%	 	 	56.0	%	
Policy acquisition cost ratio	  	 	20.1	%	 	 	17.7	%	 	 	19.9	%	 	 	18.3	%	 	 	18.3	%	 	 	18.9	%	 	 	18.2	%	 	 	18.7	%	
Administrative expense ratio	  	 	13.2	%	 	 	13.6	%	 	 	11.9	%	 	 	12.8	%	 	 	13.0	%	 	 	13.4	%	 	 	13.3	%	 	 	12.8	%	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	89.7	%	 	 	87.4	%	 	 	80.0	%	 	 	91.1	%	 	 	89.9	%	 	 	88.5	%	 	 	89.6	%	 	 	87.5	%	
 	  				 				 				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Asbestos, environmental and other run-off losses	  	$	—  	 	 	$	—  	 	 	$	6	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	6	 	
Large losses (before tax)	  	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	53	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	53	 	
Prior period development	  	$	(21	)	 	$	7	 	 	$	26	 	 	$	(8	)	 	$	(4	)	 	$	(14	)	 	$	(12	)	 	$	6	 	
									
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written	  	 	-3	%	 	 	1	%	 	 	10	%	 	 	13	%	 	 	16	%	 	 	-1	%	 	 	18	%	 	 	15	%	
Net premiums earned	  	 	1	%	 	 	7	%	 	 	11	%	 	 	21	%	 	 	17	%	 	 	4	%	 	 	19	%	 	 	17	%	
									
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	74	%	 	 	73	%	 	 	78	%	 	 	76	%	 	 	73	%	 	 	74	%	 	 	72	%	 	 	74	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Insurance-Overseas General	  	Page 11	

					
	 	ACE Limited
Segment Results -Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Insurance - Overseas General

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	 	Full Year
2002
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	1,673	 	 	$	1,341	 	 	$	1,200	 	 	$	1,244	 	 	$	1,406	 	 	$	5,191	 	 	$	4,114	 	
Net premiums written	  	 	1,178	 	 	 	983	 	 	 	868	 	 	 	949	 	 	 	976	 	 	 	3,776	 	 	 	2,838	 	
Net premiums earned	  	 	1,019	 	 	 	1,019	 	 	 	895	 	 	 	912	 	 	 	836	 	 	 	3,662	 	 	 	2,498	 	
Losses and loss expenses	  	 	586	 	 	 	616	 	 	 	527	 	 	 	550	 	 	 	490	 	 	 	2,183	 	 	 	1,535	 	
Policy acquisition costs	  	 	185	 	 	 	197	 	 	 	170	 	 	 	163	 	 	 	152	 	 	 	682	 	 	 	533	 	
Administrative expenses	  	 	138	 	 	 	134	 	 	 	121	 	 	 	121	 	 	 	114	 	 	 	490	 	 	 	381	 	
 	  				 				 				 				 				 				 				
Underwriting income	  	$	110	 	 	$	72	 	 	$	77	 	 	$	78	 	 	$	80	 	 	$	307	 	 	$	49	 	
								
Net investment income	  	 	50	 	 	 	44	 	 	 	43	 	 	 	40	 	 	 	39	 	 	 	166	 	 	 	112	 	
Net realized gains (losses)	  	 	24	 	 	 	1	 	 	 	4	 	 	 	2	 	 	 	(13	)	 	 	(6	)	 	 	(37	)	
Interest expense	  	 	—  	 	 	 	(1	)	 	 	1	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1	 	
Other (income) expense	  	 	3	 	 	 	6	 	 	 	4	 	 	 	2	 	 	 	3	 	 	 	15	 	 	 	14	 	
Income tax expense	  	 	51	 	 	 	21	 	 	 	19	 	 	 	31	 	 	 	27	 	 	 	98	 	 	 	2	 	
 	  				 				 				 				 				 				 				
Net income	  	$	130	 	 	$	91	 	 	$	100	 	 	$	87	 	 	$	76	 	 	$	354	 	 	$	107	 	
								
Net realized gains (losses)	  	 	24	 	 	 	1	 	 	 	4	 	 	 	2	 	 	 	(13	)	 	 	(6	)	 	 	(37	)	
Tax expense on net realized gains (losses)	  	 	7	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(5	)	 	 	(5	)	 	 	(12	)	
 	  				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	113	 	 	$	90	 	 	$	96	 	 	$	85	 	 	$	84	 	 	$	355	 	 	$	132	 	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	57.5	%	 	 	60.5	%	 	 	58.9	%	 	 	60.2	%	 	 	58.7	%	 	 	59.6	%	 	 	61.5	%	
Policy acquisition cost ratio	  	 	18.1	%	 	 	19.3	%	 	 	19.0	%	 	 	17.8	%	 	 	18.2	%	 	 	18.6	%	 	 	21.3	%	
Administrative expense ratio	  	 	13.5	%	 	 	13.2	%	 	 	13.5	%	 	 	13.3	%	 	 	13.7	%	 	 	13.4	%	 	 	15.3	%	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	89.1	%	 	 	93.0	%	 	 	91.4	%	 	 	91.3	%	 	 	90.6	%	 	 	91.6	%	 	 	98.1	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Insurance-Overseas General 2	  	Page 12	

					
	 	ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Global Reinsurance

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Property and casualty	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	369	 	 	$	536	 	 	$	286	 	 	$	334	 	 	$	368	 	 	$	905	 	 	$	947	 	 	$	1,567	 	
Net premiums written	  	 	363	 	 	 	527	 	 	 	280	 	 	 	301	 	 	 	365	 	 	 	890	 	 	 	937	 	 	 	1,518	 	
Net premiums earned	  	 	372	 	 	 	356	 	 	 	359	 	 	 	351	 	 	 	347	 	 	 	728	 	 	 	679	 	 	 	1,389	 	
Losses and loss expenses	  	 	206	 	 	 	205	 	 	 	204	 	 	 	436	 	 	 	173	 	 	 	411	 	 	 	333	 	 	 	973	 	
Policy acquisition costs	  	 	77	 	 	 	73	 	 	 	68	 	 	 	65	 	 	 	74	 	 	 	150	 	 	 	138	 	 	 	271	 	
Administrative expenses	  	 	16	 	 	 	15	 	 	 	15	 	 	 	16	 	 	 	16	 	 	 	31	 	 	 	34	 	 	 	65	 	
 	  				 				 				 				 				 				 				 				
P&C underwriting income (loss)	  	 	73	 	 	 	63	 	 	 	72	 	 	 	(166	)	 	 	84	 	 	 	136	 	 	 	174	 	 	 	80	 	
									
Life	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	57	 	 	 	58	 	 	 	55	 	 	 	60	 	 	 	56	 	 	 	115	 	 	 	109	 	 	 	224	 	
Net premiums written	  	 	57	 	 	 	58	 	 	 	55	 	 	 	59	 	 	 	55	 	 	 	115	 	 	 	106	 	 	 	220	 	
Net premiums earned	  	 	57	 	 	 	58	 	 	 	55	 	 	 	60	 	 	 	54	 	 	 	115	 	 	 	105	 	 	 	220	 	
Life and annuity benefits	  	 	37	 	 	 	35	 	 	 	38	 	 	 	48	 	 	 	44	 	 	 	72	 	 	 	86	 	 	 	172	 	
Policy acquisition costs	  	 	4	 	 	 	4	 	 	 	5	 	 	 	6	 	 	 	6	 	 	 	8	 	 	 	11	 	 	 	22	 	
Administrative expenses	  	 	1	 	 	 	2	 	 	 	1	 	 	 	1	 	 	 	1	 	 	 	3	 	 	 	2	 	 	 	4	 	
Net investment income	  	 	10	 	 	 	9	 	 	 	9	 	 	 	8	 	 	 	8	 	 	 	19	 	 	 	16	 	 	 	33	 	
 	  				 				 				 				 				 				 				 				
Life underwriting income	  	 	25	 	 	 	26	 	 	 	20	 	 	 	13	 	 	 	11	 	 	 	51	 	 	 	22	 	 	 	55	 	
									
Total underwriting income (loss)	  	 	98	 	 	 	89	 	 	 	92	 	 	 	(153	)	 	 	95	 	 	 	187	 	 	 	196	 	 	 	135	 	
Net investment income - property and casualty	  	 	40	 	 	 	39	 	 	 	38	 	 	 	32	 	 	 	29	 	 	 	79	 	 	 	56	 	 	 	126	 	
Net realized gains (losses)	  	 	33	 	 	 	(22	)	 	 	67	 	 	 	(35	)	 	 	12	 	 	 	11	 	 	 	2	 	 	 	34	 	
Interest expense	  	 	—  	 	 	 	1	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1	 	 	 	—  	 	 	 	—  	 	
Other (income) expense	  	 	1	 	 	 	1	 	 	 	(1	)	 	 	—  	 	 	 	—  	 	 	 	2	 	 	 	—  	 	 	 	(1	)	
Income tax expense (benefit)	  	 	9	 	 	 	9	 	 	 	11	 	 	 	(1	)	 	 	1	 	 	 	18	 	 	 	4	 	 	 	14	 	
 	  				 				 				 				 				 				 				 				
Net income (loss)	  	 	161	 	 	 	95	 	 	 	187	 	 	 	(155	)	 	 	135	 	 	 	256	 	 	 	250	 	 	 	282	 	
									
Net realized gains (losses)	  	 	33	 	 	 	(22	)	 	 	67	 	 	 	(35	)	 	 	12	 	 	 	11	 	 	 	2	 	 	 	34	 	
Tax expense on net realized gains (losses)	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	 	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	128	 	 	$	117	 	 	$	120	 	 	$	(120	)	 	$	123	 	 	$	245	 	 	$	248	 	 	$	248	 	
 	  				 				 				 				 				 				 				 				
P&C combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	55.4	%	 	 	57.6	%	 	 	57.0	%	 	 	123.9	%	 	 	50.0	%	 	 	56.5	%	 	 	49.1	%	 	 	70.1	%	
Policy acquisition cost ratio	  	 	20.7	%	 	 	20.5	%	 	 	19.0	%	 	 	18.6	%	 	 	21.3	%	 	 	20.6	%	 	 	20.3	%	 	 	19.5	%	
Administrative expense ratio	  	 	4.1	%	 	 	4.3	%	 	 	4.0	%	 	 	4.6	%	 	 	4.5	%	 	 	4.2	%	 	 	5.0	%	 	 	4.6	%	
 	  				 				 				 				 				 				 				 				
P&C combined ratio	  	 	80.2	%	 	 	82.4	%	 	 	80.0	%	 	 	147.1	%	 	 	75.8	%	 	 	81.3	%	 	 	74.4	%	 	 	94.2	%	
 	  				 				 				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses (before tax)	  	$	—  	 	 	$	3	 	 	$	31	 	 	$	278	 	 	$	—  	 	 	$	3	 	 	$	—  	 	 	$	309	 	
Prior period development	  	$	(3	)	 	$	—  	 	 	$	(13	)	 	$	(22	)	 	$	(13	)	 	$	(3	)	 	$	(26	)	 	$	(61	)	

(1)	See page 27 Non-GAAP Financial Measures.	

Global Reinsurance	  	Page 13	

					
	 	ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Global Reinsurance

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	 	Full Year
2002
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Property and casualty	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	579	 	 	$	226	 	 	$	277	 	 	$	350	 	 	$	463	 	 	$	1,316	 	 	$	887	 	
Net premiums written	  	 	572	 	 	 	220	 	 	 	219	 	 	 	347	 	 	 	443	 	 	 	1,229	 	 	 	777	 	
Net premiums earned	  	 	332	 	 	 	310	 	 	 	276	 	 	 	270	 	 	 	249	 	 	 	1,105	 	 	 	677	 	
Losses and loss expenses	  	 	160	 	 	 	167	 	 	 	134	 	 	 	143	 	 	 	116	 	 	 	560	 	 	 	304	 	
Policy acquisition costs	  	 	64	 	 	 	58	 	 	 	56	 	 	 	51	 	 	 	46	 	 	 	211	 	 	 	123	 	
Administrative expenses	  	 	18	 	 	 	17	 	 	 	16	 	 	 	14	 	 	 	15	 	 	 	62	 	 	 	40	 	
 	  				 				 				 				 				 				 				
P&C underwriting income (loss)	  	 	90	 	 	 	68	 	 	 	70	 	 	 	62	 	 	 	72	 	 	 	272	 	 	 	210	 	
								
Life	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	53	 	 	 	49	 	 	 	49	 	 	 	46	 	 	 	49	 	 	 	193	 	 	 	165	 	
Net premiums written	  	 	51	 	 	 	47	 	 	 	47	 	 	 	44	 	 	 	47	 	 	 	185	 	 	 	159	 	
Net premiums earned	  	 	51	 	 	 	48	 	 	 	46	 	 	 	42	 	 	 	48	 	 	 	184	 	 	 	158	 	
Life and annuity benefits	  	 	42	 	 	 	44	 	 	 	45	 	 	 	44	 	 	 	48	 	 	 	181	 	 	 	158	 	
Policy acquisition costs	  	 	5	 	 	 	5	 	 	 	5	 	 	 	2	 	 	 	4	 	 	 	16	 	 	 	16	 	
Administrative expenses	  	 	1	 	 	 	1	 	 	 	—  	 	 	 	1	 	 	 	1	 	 	 	3	 	 	 	6	 	
Net investment income	  	 	8	 	 	 	8	 	 	 	10	 	 	 	8	 	 	 	7	 	 	 	33	 	 	 	27	 	
 	  				 				 				 				 				 				 				
Life underwriting income	  	 	11	 	 	 	6	 	 	 	6	 	 	 	3	 	 	 	2	 	 	 	17	 	 	 	5	 	
								
Total underwriting income (loss)	  	 	101	 	 	 	74	 	 	 	76	 	 	 	65	 	 	 	74	 	 	 	289	 	 	 	215	 	
Net investment income - property and casualty	  	 	27	 	 	 	24	 	 	 	24	 	 	 	22	 	 	 	17	 	 	 	87	 	 	 	82	 	
Net realized gains (losses)	  	 	(10	)	 	 	7	 	 	 	10	 	 	 	13	 	 	 	3	 	 	 	33	 	 	 	(57	)	
Interest expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1	 	
Other (income) expense	  	 	—  	 	 	 	(1	)	 	 	(1	)	 	 	—  	 	 	 	(1	)	 	 	(3	)	 	 	(1	)	
Income tax expense (benefit)	  	 	3	 	 	 	4	 	 	 	3	 	 	 	4	 	 	 	3	 	 	 	14	 	 	 	1	 	
 	  				 				 				 				 				 				 				
Net income (loss)	  	 	115	 	 	 	102	 	 	 	108	 	 	 	96	 	 	 	92	 	 	 	398	 	 	 	239	 	
								
Net realized gains (losses)	  	 	(10	)	 	 	7	 	 	 	10	 	 	 	13	 	 	 	3	 	 	 	33	 	 	 	(57	)	
Tax expense on net realized gains (losses)	  	 	—  	 	 	 	1	 	 	 	—  	 	 	 	(1	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses) (1)	  	$	125	 	 	$	96	 	 	$	98	 	 	$	82	 	 	$	89	 	 	$	365	 	 	$	296	 	
 	  				 				 				 				 				 				 				
P&C combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	48.1	%	 	 	53.8	%	 	 	48.6	%	 	 	52.9	%	 	 	46.6	%	 	 	50.6	%	 	 	44.9	%	
Policy acquisition cost ratio	  	 	19.3	%	 	 	18.8	%	 	 	20.3	%	 	 	18.7	%	 	 	18.5	%	 	 	19.1	%	 	 	18.1	%	
Administrative expense ratio	  	 	5.6	%	 	 	5.5	%	 	 	5.6	%	 	 	5.3	%	 	 	6.0	%	 	 	5.6	%	 	 	5.9	%	
 	  				 				 				 				 				 				 				
P&C combined ratio	  	 	73.0	%	 	 	78.1	%	 	 	74.5	%	 	 	76.9	%	 	 	71.1	%	 	 	75.3	%	 	 	68.9	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Global Reinsurance 2	  	Page 14	

					
	 	ACE Limited
Segment Results - Consecutive Quarters - 3
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Global Reinsurance - Property & Casualty

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written	  	 	-1	%	 	 	-8	%	 	 	27	%	 	 	37	%	 	 	5	%	 	 	-5	%	 	 	19	%	 	 	24	%	
Net premiums earned	  	 	7	%	 	 	7	%	 	 	16	%	 	 	27	%	 	 	29	%	 	 	7	%	 	 	31	%	 	 	26	%	
									
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	98	%	 	 	98	%	 	 	98	%	 	 	90	%	 	 	99	%	 	 	98	%	 	 	99	%	 	 	97	%	
									
Global Reinsurance - By Division	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
Gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	49	 	 	$	105	 	 	$	64	 	 	$	76	 	 	$	60	 	 	$	154	 	 	$	186	 	 	$	326	 	
Tempest USA	  	 	228	 	 	 	248	 	 	 	204	 	 	 	196	 	 	 	225	 	 	 	476	 	 	 	477	 	 	 	881	 	
Tempest Bermuda	  	 	92	 	 	 	183	 	 	 	18	 	 	 	62	 	 	 	83	 	 	 	275	 	 	 	284	 	 	 	360	 	
 	  				 				 				 				 				 				 				 				
Total	  	$	369	 	 	$	536	 	 	$	286	 	 	$	334	 	 	$	368	 	 	$	905	 	 	$	947	 	 	$	1,567	 	

Net premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	46	 	 	$	102	 	 	$	61	 	 	$	74	 	 	$	54	 	 	$	148	 	 	$	176	 	 	$	311	 	
Tempest USA	  	 	227	 	 	 	247	 	 	 	204	 	 	 	195	 	 	 	224	 	 	 	474	 	 	 	476	 	 	 	877	 	
Tempest Bermuda	  	 	90	 	 	 	178	 	 	 	15	 	 	 	32	 	 	 	87	 	 	 	268	 	 	 	285	 	 	 	330	 	
 	  				 				 				 				 				 				 				 				
Total	  	$	363	 	 	$	527	 	 	$	280	 	 	$	301	 	 	$	365	 	 	$	890	 	 	$	937	 	 	$	1,518	 	

Net premiums earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	66	 	 	$	76	 	 	$	76	 	 	$	77	 	 	$	75	 	 	$	142	 	 	$	150	 	 	$	303	 	
Tempest USA	  	 	230	 	 	 	212	 	 	 	204	 	 	 	185	 	 	 	189	 	 	 	442	 	 	 	358	 	 	 	749	 	
Tempest Bermuda	  	 	76	 	 	 	68	 	 	 	79	 	 	 	89	 	 	 	83	 	 	 	144	 	 	 	171	 	 	 	337	 	
 	  				 				 				 				 				 				 				 				
Total	  	$	372	 	 	$	356	 	 	$	359	 	 	$	351	 	 	$	347	 	 	$	728	 	 	$	679	 	 	$	1,389	 	

Net premiums written/gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	 	94	%	 	 	97	%	 	 	95	%	 	 	97	%	 	 	90	%	 	 	96	%	 	 	95	%	 	 	95	%	
Tempest USA	  	 	100	%	 	 	100	%	 	 	100	%	 	 	99	%	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%	
Tempest Bermuda	  	 	98	%	 	 	97	%	 	 	83	%	 	 	52	%	 	 	105	%	 	 	97	%	 	 	100	%	 	 	92	%	
 	  				 				 				 				 				 				 				 				
Total NPW/GPW	  	 	98	%	 	 	98	%	 	 	98	%	 	 	90	%	 	 	99	%	 	 	98	%	 	 	99	%	 	 	97	%	

			
Global Reinsurance 3	  	Page 15	

					
	 	ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Financial Services

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	15	 	 	$	163	 	 	$	29	 	 	$	68	 	 	$	15	 	 	$	178	 	 	$	223	 	 	$	320	 	
Net premiums written	  	 	15	 	 	 	161	 	 	 	27	 	 	 	68	 	 	 	13	 	 	 	176	 	 	 	221	 	 	 	316	 	
Net premiums earned	  	 	92	 	 	 	90	 	 	 	96	 	 	 	111	 	 	 	134	 	 	 	182	 	 	 	313	 	 	 	520	 	
Losses and loss expenses	  	 	70	 	 	 	83	 	 	 	97	 	 	 	116	 	 	 	90	 	 	 	153	 	 	 	175	 	 	 	388	 	
Policy acquisition costs	  	 	1	 	 	 	2	 	 	 	1	 	 	 	2	 	 	 	9	 	 	 	3	 	 	 	20	 	 	 	23	 	
Administrative expenses	  	 	7	 	 	 	4	 	 	 	1	 	 	 	4	 	 	 	9	 	 	 	11	 	 	 	34	 	 	 	39	 	
 	  				 				 				 				 				 				 				 				
Underwriting income (loss)	  	 	14	 	 	 	1	 	 	 	(3	)	 	 	(11	)	 	 	26	 	 	 	15	 	 	 	84	 	 	 	70	 	
									
Net investment income	  	 	30	 	 	 	32	 	 	 	29	 	 	 	29	 	 	 	36	 	 	 	62	 	 	 	89	 	 	 	147	 	
Net realized gains (losses)	  	 	3	 	 	 	6	 	 	 	12	 	 	 	(2	)	 	 	(32	)	 	 	9	 	 	 	(27	)	 	 	(17	)	
Interest expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	2	 	 	 	1	 	 	 	—  	 	 	 	3	 	 	 	5	 	
Other (income) expense	  	 	(13	)	 	 	(12	)	 	 	(15	)	 	 	(14	)	 	 	(7	)	 	 	(25	)	 	 	4	 	 	 	(25	)	
Income tax expense	  	 	7	 	 	 	6	 	 	 	3	 	 	 	1	 	 	 	11	 	 	 	13	 	 	 	31	 	 	 	35	 	
 	  				 				 				 				 				 				 				 				
Net income	  	 	53	 	 	 	45	 	 	 	50	 	 	 	27	 	 	 	25	 	 	 	98	 	 	 	108	 	 	 	185	 	
									
Net realized gains (losses)	  	 	3	 	 	 	6	 	 	 	12	 	 	 	(2	)	 	 	(32	)	 	 	9	 	 	 	(27	)	 	 	(17	)	
Tax expense (benefit) on net realized gains (losses)	  	 	(1	)	 	 	2	 	 	 	2	 	 	 	(2	)	 	 	1	 	 	 	1	 	 	 	8	 	 	 	8	 	
 	  				 				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	49	 	 	$	41	 	 	$	40	 	 	$	27	 	 	$	58	 	 	$	90	 	 	$	143	 	 	$	210	 	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	76.0	%	 	 	92.2	%	 	 	101.3	%	 	 	104.7	%	 	 	66.1	%	 	 	84.0	%	 	 	55.8	%	 	 	74.6	%	
Policy acquisition cost ratio	  	 	1.4	%	 	 	2.2	%	 	 	-0.1	%	 	 	2.3	%	 	 	7.0	%	 	 	1.8	%	 	 	6.4	%	 	 	4.3	%	
Administrative expense ratio	  	 	6.7	%	 	 	4.6	%	 	 	1.8	%	 	 	2.7	%	 	 	7.5	%	 	 	5.7	%	 	 	11.0	%	 	 	7.5	%	
 	  				 				 				 				 				 				 				 				
Combined ratio	  	 	84.1	%	 	 	99.0	%	 	 	103.0	%	 	 	109.7	%	 	 	80.6	%	 	 	91.5	%	 	 	73.2	%	 	 	86.4	%	
 	  				 				 				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss portfolio transfers (2)	  	$	—  	 	 	$	—  	 	 	$	8	 	 	$	19	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	27	 	
Large losses (before tax)	  	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	11	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	11	 	
Prior period development	  	$	(8	)	 	$	1	 	 	$	(8	)	 	$	(14	)	 	$	(5	)	 	$	(7	)	 	$	(7	)	 	$	(29	)	
									
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written	  	 	15	%	 	 	-23	%	 	 	-90	%	 	 	-35	%	 	 	-90	%	 	 	-20	%	 	 	-66	%	 	 	-69	%	
Net premiums earned	  	 	-31	%	 	 	-50	%	 	 	-80	%	 	 	-46	%	 	 	-37	%	 	 	-42	%	 	 	-24	%	 	 	-52	%	
									
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	100	%	 	 	99	%	 	 	93	%	 	 	100	%	 	 	87	%	 	 	99	%	 	 	99	%	 	 	99	%	

(1)	See page 27 Non-GAAP Financial Measures.	
(2)	Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued at 100% loss ratio.	

Financial Services	  	Page 16	

					
	 	ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Financial Services

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	 	Full Year
2002
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Gross premiums written	  	$	208	 	 	$	290	 	 	$	106	 	 	$	118	 	 	$	521	 	 	$	1,035	 	 	$	1,504	 	
Net premiums written	  	 	208	 	 	 	276	 	 	 	105	 	 	 	132	 	 	 	515	 	 	 	1,028	 	 	 	1,464	 	
Net premiums earned	  	 	179	 	 	 	471	 	 	 	204	 	 	 	214	 	 	 	198	 	 	 	1,087	 	 	 	1,094	 	
Losses and loss expenses	  	 	85	 	 	 	427	 	 	 	151	 	 	 	158	 	 	 	148	 	 	 	884	 	 	 	912	 	
Policy acquisition costs	  	 	11	 	 	 	15	 	 	 	18	 	 	 	17	 	 	 	11	 	 	 	61	 	 	 	72	 	
Administrative expenses	  	 	25	 	 	 	24	 	 	 	22	 	 	 	20	 	 	 	18	 	 	 	84	 	 	 	57	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	 	58	 	 	 	5	 	 	 	13	 	 	 	19	 	 	 	21	 	 	 	58	 	 	 	53	 	
								
Net investment income	  	 	53	 	 	 	53	 	 	 	49	 	 	 	48	 	 	 	51	 	 	 	201	 	 	 	190	 	
Net realized gains (losses)	  	 	5	 	 	 	93	 	 	 	29	 	 	 	73	 	 	 	(4	)	 	 	191	 	 	 	(117	)	
Interest expense	  	 	2	 	 	 	2	 	 	 	2	 	 	 	1	 	 	 	1	 	 	 	6	 	 	 	10	 	
Other (income) expense	  	 	11	 	 	 	—  	 	 	 	—  	 	 	 	(1	)	 	 	—  	 	 	 	(1	)	 	 	(2	)	
Income tax expense	  	 	20	 	 	 	10	 	 	 	17	 	 	 	28	 	 	 	9	 	 	 	64	 	 	 	13	 	
 	  				 				 				 				 				 				 				
Net income	  	 	83	 	 	 	139	 	 	 	72	 	 	 	112	 	 	 	58	 	 	 	381	 	 	 	105	 	
								
Net realized gains (losses)	  	 	5	 	 	 	93	 	 	 	29	 	 	 	73	 	 	 	(4	)	 	 	191	 	 	 	(117	)	
Tax expense (benefit) on net realized gains (losses)	  	 	7	 	 	 	11	 	 	 	6	 	 	 	20	 	 	 	—  	 	 	 	37	 	 	 	(17	)	
 	  				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	85	 	 	$	57	 	 	$	49	 	 	$	59	 	 	$	62	 	 	$	227	 	 	$	205	 	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	48.0	%	 	 	90.7	%	 	 	73.9	%	 	 	73.9	%	 	 	74.8	%	 	 	81.3	%	 	 	83.4	%	
Policy acquisition cost ratio	  	 	5.9	%	 	 	3.2	%	 	 	8.7	%	 	 	7.8	%	 	 	5.5	%	 	 	5.6	%	 	 	6.6	%	
Administrative expense ratio	  	 	13.7	%	 	 	5.1	%	 	 	10.7	%	 	 	9.6	%	 	 	9.1	%	 	 	7.8	%	 	 	5.2	%	
 	  				 				 				 				 				 				 				
Combined ratio	  	 	67.6	%	 	 	99.0	%	 	 	93.3	%	 	 	91.3	%	 	 	89.4	%	 	 	94.7	%	 	 	95.2	%	

(1)	See page 27 Non-GAAP Financial Measures.	

Financial Services 2	  	Page 17	

					
	 	ACE Limited
Loss Reserve Rollforward
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	Total
	 	 	Ongoing
	 	 	Run-off (1)
	 	
 	  	Unpaid Losses
	 	 	Unpaid Losses
	 	 	Unpaid Losses
	 	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	 	Ceded
	 	 	Net
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2003	  	$	27,166	 	 	$	12,443	 	 	$	14,723	 	 	$	19,846	 	 	$	6,950	 	 	$	12,896	 	 	$	7,320	 	 	$	5,493	 	 	$	1,827	 	
										
Losses and loss expenses incurred	  	 	2,285	 	 	 	756	 	 	 	1,529	 	 	 	2,243	 	 	 	724	 	 	 	1,519	 	 	 	42	 	 	 	32	 	 	 	10	 	
Losses and loss expenses paid	  	 	(1,860	)	 	 	(781	)	 	 	(1,079	)	 	 	(1,639	)	 	 	(545	)	 	 	(1,094	)	 	 	(221	)	 	 	(236	)	 	 	15	 	
Other (incl. foreign exch. revaluation)	  	 	117	 	 	 	110	 	 	 	7	 	 	 	117	 	 	 	110	 	 	 	7	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				 				
Balance at March 31, 2004	  	 	27,708	 	 	 	12,528	 	 	 	15,180	 	 	 	20,567	 	 	 	7,239	 	 	 	13,328	 	 	 	7,141	 	 	 	5,289	 	 	 	1,852	 	
										
Losses and loss expenses incurred	  	 	2,453	 	 	 	727	 	 	 	1,726	 	 	 	2,483	 	 	 	761	 	 	 	1,722	 	 	 	(30	)	 	 	(34	)	 	 	4	 	
Losses and loss expenses paid	  	 	(1,693	)	 	 	(593	)	 	 	(1,100	)	 	 	(1,402	)	 	 	(399	)	 	 	(1,003	)	 	 	(291	)	 	 	(194	)	 	 	(97	)	
Other (incl. foreign exch. revaluation)	  	 	(233	)	 	 	166	 	 	 	(399	)	 	 	(233	)	 	 	166	 	 	 	(399	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				 				
Balance at June 30, 2004	  	 	28,235	 	 	 	12,828	 	 	 	15,407	 	 	 	21,415	 	 	 	7,767	 	 	 	13,648	 	 	 	6,820	 	 	 	5,061	 	 	 	1,759	 	
										
Losses and loss expenses incurred	  	 	3,309	 	 	 	1,076	 	 	 	2,233	 	 	 	3,280	 	 	 	1,058	 	 	 	2,222	 	 	 	29	 	 	 	18	 	 	 	11	 	
Losses and loss expenses paid	  	 	(1,957	)	 	 	(697	)	 	 	(1,260	)	 	 	(1,749	)	 	 	(372	)	 	 	(1,377	)	 	 	(208	)	 	 	(325	)	 	 	117	 	
Other (incl. foreign exch. revaluation)	  	 	27	 	 	 	48	 	 	 	(21	)	 	 	(396	)	 	 	(375	)	 	 	(21	)	 	 	423	 	 	 	423	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				 				
Balance at September 30, 2004	  	 	29,614	 	 	 	13,255	 	 	 	16,359	 	 	 	22,550	 	 	 	8,078	 	 	 	14,472	 	 	 	7,064	 	 	 	5,177	 	 	 	1,887	 	
										
Losses and loss expenses incurred	  	 	3,719	 	 	 	1,514	 	 	 	2,205	 	 	 	2,679	 	 	 	1,090	 	 	 	1,589	 	 	 	1,040	 	 	 	424	 	 	 	616	 	
Losses and loss expenses paid	  	 	(2,381	)	 	 	(987	)	 	 	(1,394	)	 	 	(2,272	)	 	 	(939	)	 	 	(1,333	)	 	 	(109	)	 	 	(48	)	 	 	(61	)	
Other (incl. foreign exch. revaluation)	  	 	531	 	 	 	188	 	 	 	343	 	 	 	244	 	 	 	(141	)	 	 	385	 	 	 	287	 	 	 	329	 	 	 	(42	)	
 	  				 				 				 				 				 				 				 				 				
Balance at December 31, 2004	  	 	31,483	 	 	 	13,970	 	 	 	17,513	 	 	 	23,201	 	 	 	8,088	 	 	 	15,113	 	 	 	8,282	 	 	 	5,882	 	 	 	2,400	 	
										
Losses and loss expenses incurred	  	 	2,539	 	 	 	750	 	 	 	1,789	 	 	 	2,495	 	 	 	728	 	 	 	1,767	 	 	 	44	 	 	 	22	 	 	 	22	 	
Losses and loss expenses paid	  	 	(2,001	)	 	 	(765	)	 	 	(1,236	)	 	 	(1,820	)	 	 	(663	)	 	 	(1,157	)	 	 	(181	)	 	 	(102	)	 	 	(79	)	
Other (incl. foreign exch. revaluation) (2)	  	 	(595	)	 	 	(595	)	 	 	—  	 	 	 	(669	)	 	 	(670	)	 	 	1	 	 	 	74	 	 	 	75	 	 	 	(1	)	
 	  				 				 				 				 				 				 				 				 				
Balance at March 31, 2005	  	 	31,426	 	 	 	13,360	 	 	 	18,066	 	 	 	23,207	 	 	 	7,483	 	 	 	15,724	 	 	 	8,219	 	 	 	5,877	 	 	 	2,342	 	
										
Losses and loss expenses incurred	  	 	2,809	 	 	 	965	 	 	 	1,844	 	 	 	2,789	 	 	 	954	 	 	 	1,835	 	 	 	20	 	 	 	11	 	 	 	9	 	
Losses and loss expenses paid	  	 	(1,916	)	 	 	(750	)	 	 	(1,166	)	 	 	(1,708	)	 	 	(565	)	 	 	(1,143	)	 	 	(208	)	 	 	(185	)	 	 	(23	)	
Other (incl. foreign exch. revaluation)	  	 	(218	)	 	 	(71	)	 	 	(147	)	 	 	(191	)	 	 	(71	)	 	 	(120	)	 	 	(27	)	 	 	—  	 	 	 	(27	)	
 	  				 				 				 				 				 				 				 				 				
Balance at June 30, 2005	  	$	32,101	 	 	$	13,504	 	 	$	18,597	 	 	$	24,097	 	 	$	7,801	 	 	$	16,296	 	 	$	8,004	 	 	$	5,703	 	 	$	2,301	 	

(1)	The run-off reserves primarily include the Brandywine group, the Commercial Insurance Service - Middle Market Worker’s Comp. reserves and the pre-1997 Westchester Specialty reserves.	
(2)	Novation of a contract for $597M.	

			
Loss Reserve Rollforward	  	Page 18	

					
	 	ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Net Reinsurance Recoverable by Division

 	  	June 30
2005
	 	 	March 31
2005
	 	 	December 31
2004
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Reinsurance recoverable on paid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations	  	$	768	 	 	$	795	 	 	$	788	 	
Brandywine	  	 	415	 	 	 	385	 	 	 	398	 	
Westchester	  	 	32	 	 	 	24	 	 	 	24	 	
 	  				 				 				
Total	  	$	1,215	 	 	$	1,204	 	 	$	1,210	 	
 	  				 				 				
Reinsurance recoverable on unpaid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations	  	$	8,911	 	 	$	8,612	 	 	$	9,296	 	
Brandywine	  	 	4,654	 	 	 	4,796	 	 	 	4,720	 	
Westchester	  	 	571	 	 	 	578	 	 	 	589	 	
 	  				 				 				
Total	  	$	14,136	 	 	$	13,986	 	 	$	14,605	 	
 	  				 				 				
Gross reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations	  	$	9,679	 	 	$	9,407	 	 	$	10,084	 	
Brandywine	  	 	5,069	 	 	 	5,181	 	 	 	5,118	 	
Westchester	  	 	603	 	 	 	602	 	 	 	613	 	
 	  				 				 				
Total	  	$	15,351	 	 	$	15,190	 	 	$	15,815	 	
 	  				 				 				
Bad debt reserve	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations	  	$	(579	)	 	$	(577	)	 	$	(547	)	
Brandywine	  	 	(302	)	 	 	(302	)	 	 	(341	)	
Westchester	  	 	(38	)	 	 	(38	)	 	 	(40	)	
 	  				 				 				
Total	  	$	(919	)	 	$	(917	)	 	$	(928	)	
 	  				 				 				
Net reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations	  	$	9,100	 	 	$	8,830	 	 	$	9,537	 	
Brandywine	  	 	4,767	 	 	 	4,879	 	 	 	4,777	 	
Westchester	  	 	565	 	 	 	564	 	 	 	573	 	
 	  				 				 				
Total	  	$	14,432	 	 	$	14,273	 	 	$	14,887	 	

			
Reinsurance Recoverable	  	Page 19	

					
	 	ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)	 	 	

Reinsurance Recoverable for Active Operations	  	 	 	  	 	 	  	 	 	
		
 	  	March 31, 2005 (Restated)
	 	
Categories
	  	Recoverable
	  	Bad Debt
	  	% of Gross
	 	
Top 10 reinsurers	  	$	4,341	  	$	71	  	1.6	%	
Other reinsurers balances >$20 million	  	 	2,220	  	 	118	  	5.3	%	
Other reinsurers balances <$20 million	  	 	432	  	 	35	  	8.1	%	
Mandatory pools and government agencies	  	 	697	  	 	3	  	0.4	%	
Structured settlements	  	 	207	  	 	1	  	0.5	%	
Captives	  	 	1,106	  	 	1	  	0.1	%	
Other (1)	  	 	404	  	 	348	  	86.1	%	
 	  			  			  			
Total	  	$	9,407	  	$	577	  	6.1	%	

At March 31, 2005, $6.5 billion of the active operations’ recoverables were from rated reinsurers, of which 93.7% were rated the equivalent of A- or better by internationally recognized rating agencies. The Company held collateral of $2.8 billion, of which $1.5 billion was matched and usable against existing recoverables.

Top 10 Reinsurers (net of collateral) (2)
	  	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
	
American International Group (including Transatlantic Reinsurance Company)	  	AGRI General Ins Co
AIOI Insurance	  	Independence Blue Cross (Amerihealth)
ING - Internationale Nederlanden GRP	
Berkshire Hathaway Insurance Group	  	Allianz	  	IRB - Brasil Reaseguros S.A.	
Chubb Insurance Group	  	Arch Capital	  	Liberty Mutual Insurance Companies	
Electric Insurance Company	  	Aspen Insurance Holdings Ltd	  	Overseas Partners Ltd	
GE Insurance Solutions	  	AXA	  	Partner Re	
HDI Haftpflichtverband Der Deutschen Industrie VAG	  	Cigna	  	Platinum Underwriters	
Lloyd’s of London	  	CNA Insurance Companies	  	Renaissance Re Holdings Ltd	
Munich Re	  	Converium Group	  	Royal & Sun Alliance Insurance Group	
Swiss Re Group	  	Endurance Specialty	  	SCOR Group	
XL Capital Group	  	Everest Re Group	  	Sompo Japan	
 	  	Fairfax Financial	  	St. Paul Travelers Companies	
 	  	Federal Crop Insurance Corp	  	Toa Reinsurance Company	
 	  	FM Global Group	  	Trenwick Group	
 	  	Gerling Group	  	White Mountains Insurance Group	
 	  	Hartford Insurance Group	  	WR Berkley Corp	
 	  	 	  	Zurich Financial Services Group	

(1)	Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimate of bad debt reserve associated with Other considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.	
(2)	Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.	

Reinsurance Rec-Active	  	Page 20	

					
	 	ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)	 	 	

Consolidated Reinsurance Recoverable	  	 	 	  	 	 	  	 	 	
		
 	  	March 31, 2005 (Restated)
	 	
Categories
	  	Recoverable
	  	Bad Debt
	  	% of Gross
	 	
Top 10 reinsurers	  	$	7,520	  	$	100	  	1.3	%	
Other reinsurers balances >$20 million	  	 	3,399	  	 	219	  	6.4	%	
Other reinsurers balances <$20 million	  	 	939	  	 	123	  	13.1	%	
Mandatory pools and government agencies	  	 	724	  	 	4	  	0.6	%	
Structured settlements	  	 	489	  	 	2	  	0.4	%	
Captives	  	 	1,198	  	 	2	  	0.2	%	
Other (1)	  	 	921	  	 	467	  	50.7	%	
 	  			  			  			
Total	  	$	15,190	  	$	917	  	6.0	%	

At March 31, 2005, $10.6 billion of consolidated recoverables were from rated reinsurers, of which 94.5% were rated the equivalent of A- or better by internationally recognized rating agencies.

Top 10 Reinsurers (net of collateral) (2)
	  	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
	
American International Group (including Transatlantic Reinsurance Company)	  	AGRI General Ins Co	  	Hartford Insurance Group	
Berkshire Hathaway Insurance Group	  	AIOI Insurance	  	Independence Blue Cross (Amerihealth)	
Everest Re Group	  	Allianz	  	ING - Internationale Nederlanden GRP	
Equitas	  	Allstate	  	IRB - Brasil Reaseguros S.A.	
GE Insurance Solutions	  	Arch Capital	  	Liberty Mutual Insurance Companies	
HDI Haftpflichtverband Der Deutschen Industrie VAG	  	Aspen Insurance Holdings Ltd	  	Millea Holdings	
Lloyd’s of London	  	Assicurazioni Generali SPA	  	Mitsui Sumitomo Insurance Company Ltd.	
Munich Re	  	AVIVA	  	Overseas Partners Ltd	
Swiss Re Group	  	AXA	  	Partner Re	
XL Capital Group	  	Chubb Insurance Group	  	Platinum Underwriters	
 	  	CIGNA	  	QBE Insurance	
 	  	CNA Insurance Companies	  	Renaissance Re Holdings Ltd	
 	  	Converium Group	  	Royal & Sun Alliance Insurance Group	
 	  	Dominion Ins. Co. Ltd	  	SCOR Group	
 	  	Dukes Place Holdings	  	Sompo Japan	
 	  	Electric Insurance Company	  	St. Paul Travelers Companies	
 	  	Endurance Specialty	  	Toa Reinsurance Company	
 	  	Fairfax Financial	  	Trenwick Group	
 	  	Federal Crop Insurance Corp	  	White Mountains Insurance Group	
 	  	FM Global Group	  	WR Berkley Corp	
 	  	Gerling Group	  	Zurich Financial Services Group	

(1)	Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimate of bad debt reserve associated with Other considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.	
(2)	Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.	

			
Reinsurance Rec-Consolidated	  	Page 21	

					
	 	ACE Limited
Reinsurance Recoverable Analysis - 4
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

 	  	General
Collections  (1)
	 	 	Other (2)
	 	 	Total
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Gross balance at December 31, 2004	  	$	716	 	 	$	494	 	 	$	1,210	 	
Bad debt reserve at 12/31/04	  	 	37	 	 	 	272	 	 	 	309	 	
% of gross	  	 	5.2	%	 	 	55.1	%	 	 	25.5	%	
 	  				 				 				
Net balance at December 31, 2004 (3) 	  	$	679	 	 	$	222	 	 	$	901	 	
 	  				 				 				
Gross balance at March 31, 2005	  	$	712	 	 	$	492	 	 	$	1,204	 	
Bad debt reserve at 3/31/05	  	 	37	 	 	 	268	 	 	 	305	 	
% of gross	  	 	5.2	%	 	 	54.5	%	 	 	25.3	%	
 	  				 				 				
Net balance at March 31, 2005 (3) 	  	$	675	 	 	$	224	 	 	$	899	 	
 	  				 				 				
Gross balance at June 30, 2005	  	$	719	 	 	$	496	 	 	$	1,215	 	
Bad debt reserve at 6/30/05	  	 	29	 	 	 	271	 	 	 	300	 	
% of gross	  	 	4.0	%	 	 	54.6	%	 	 	24.7	%	
 	  				 				 				
Net balance at June 30, 2005	  	$	690	 	 	$	225	 	 	$	915	 	

(1)	General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or credit issues.	
(2)	Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation for Brandywine Group and active operations. Our estimation of the reserve for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.	
(3)	The current quarter allocation between general collections and other is estimated based on prior quarter balances. Balances are adjusted to actual in the next quarter.	

Reinsurance Recoverable 4	  	Page 22	

					
	 	ACE Limited
Investment Portfolio
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	June 30
2005
	 	 	March 31
2005
	 	 	December 31
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	
Market Value	  	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities available for sale	  	$	21,217	 	 	$	20,418	 	 	$	22,976	 	
Fixed maturities held to maturity	  	 	3,207	 	 	 	3,207	 	 	 	—  	 	
Short-term investments	  	 	2,521	 	 	 	2,198	 	 	 	2,201	 	
 	  				 				 				
Total	  	$	26,945	 	 	$	25,823	 	 	$	25,177	 	
 	  				 				 				
Asset Allocation by Market Value	  	 	 	 	 	 	 	 	 	 	 	 	
Treasury	  	$	1,704	 	 	$	1,728	 	 	$	1,551	 	
Agency	  	 	1,555	 	 	 	1,519	 	 	 	1,549	 	
Corporate	  	 	7,612	 	 	 	7,674	 	 	 	7,677	 	
Mortgage-backed securities	  	 	6,180	 	 	 	5,515	 	 	 	5,043	 	
Asset-backed securities	  	 	1,453	 	 	 	1,223	 	 	 	1,234	 	
Municipal	  	 	550	 	 	 	561	 	 	 	568	 	
Non-US	  	 	5,370	 	 	 	5,405	 	 	 	5,376	 	
Cash & cash equivalent	  	 	2,521	 	 	 	2,198	 	 	 	2,179	 	
 	  				 				 				
Total	  	 	26,945	 	 	 	25,823	 	 	$	25,177	 	
 	  				 				 				
Credit Quality by Market Value	  	 	 	 	 	 	 	 	 	 	 	 	
AAA	  	$	16,266	 	 	$	14,800	 	 	$	13,944	 	
AA	  	 	2,208	 	 	 	2,485	 	 	 	2,642	 	
A	  	 	4,336	 	 	 	4,492	 	 	 	4,441	 	
BBB	  	 	1,982	 	 	 	2,195	 	 	 	2,289	 	
BB	  	 	1,046	 	 	 	819	 	 	 	776	 	
B	  	 	1,060	 	 	 	982	 	 	 	1,041	 	
Other	  	 	47	 	 	 	50	 	 	 	44	 	
 	  				 				 				
Total	  	 	26,945	 	 	 	25,823	 	 	$	25,177	 	
 	  				 				 				
Cost/Amortized Cost	  	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities available for sale	  	$	20,908	 	 	$	20,302	 	 	$	22,510	 	
Fixed maturities held to maturity	  	 	3,151	 	 	 	3,211	 	 	 	—  	 	
Short term investments	  	 	2,521	 	 	 	2,198	 	 	 	2,201	 	
 	  				 				 				
Subtotal	  	 	26,580	 	 	 	25,711	 	 	 	24,711	 	
Equity securities	  	 	1,213	 	 	 	1,170	 	 	 	1,061	 	
Other investments	  	 	562	 	 	 	564	 	 	 	551	 	
 	  				 				 				
Total	  	$	28,355	 	 	$	27,445	 	 	$	26,323	 	
 	  				 				 				
Avg. duration of fixed maturities, adjusted for int. rate swaps	  	 	3.0 years	 	 	 	3.1 years	 	 	 	3.4 years	 	
Avg. market yield of fixed maturities	  	 	4.3	%	 	 	4.5	%	 	 	4.1	%	
Avg. credit quality	  	 	AA	 	 	 	AA	 	 	 	AA	 	

Investments	  	Page 23	

					
	 	ACE Limited
Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	Three months ended June 30, 2005
	 	 	Six months ended June 30, 2005
	 	
 	  	Net Realized
Gains
(Losses) (1)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	 	Net Realized
Gains
(Losses) (1)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	26	 	 	$	191	 	 	$	217	 	 	$	13	 	 	$	(151	)	 	$	(138	)	
Interest rate swaps	  	 	(2	)	 	 	—  	 	 	 	(2	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Equity securities	  	 	21	 	 	 	(14	)	 	 	7	 	 	 	35	 	 	 	(37	)	 	 	(2	)	
Equity and fixed income derivatives	  	 	(41	)	 	 	—  	 	 	 	(41	)	 	 	(43	)	 	 	—  	 	 	 	(43	)	
Foreign exchange gains (losses)	  	 	2	 	 	 	—  	 	 	 	2	 	 	 	(1	)	 	 	—  	 	 	 	(1	)	
Other	  	 	2	 	 	 	13	 	 	 	15	 	 	 	4	 	 	 	29	 	 	 	33	 	
 	  				 				 				 				 				 				
Total inv. portfolio gains (losses)	  	 	8	 	 	 	190	 	 	 	198	 	 	 	8	 	 	 	(159	)	 	 	(151	)	
Other FAS 133 adjustments	  	 	24	 	 	 	—  	 	 	 	24	 	 	 	10	 	 	 	—  	 	 	 	10	 	
 	  				 				 				 				 				 				
Total gains (losses)	  	 	32	 	 	 	190	 	 	 	222	 	 	 	18	 	 	 	(159	)	 	 	(141	)	
Income tax expense (benefit)	  	 	8	 	 	 	44	 	 	 	52	 	 	 	12	 	 	 	(25	)	 	 	(13	)	
 	  				 				 				 				 				 				
Net gains (losses)	  	$	24	 	 	$	146	 	 	$	170	 	 	$	6	 	 	$	(134	)	 	$	(128	)	

(1)	The quarter includes impairments of $4M for fixed maturities and $1M for equities. Year to date includes impairments of $24M for fixed maturities and $2M for equities.	

 	  	Three months ended June 30, 2004
	 	 	Six months ended June 30, 2004
	 	
 	  	Net Realized
Gains
(Losses) (2)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	 	Net Realized
Gains
(Losses) (1)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	
 	  	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	(8	)	 	$	(716	)	 	$	(724	)	 	$	47	 	 	$	(538	)	 	$	(491	)	
Interest rate swaps	  	 	27	 	 	 	—  	 	 	 	27	 	 	 	13	 	 	 	—  	 	 	 	13	 	
Equity securities	  	 	40	 	 	 	(27	)	 	 	13	 	 	 	68	 	 	 	(31	)	 	 	37	 	
Equity and fixed income derivatives	  	 	3	 	 	 	—  	 	 	 	3	 	 	 	16	 	 	 	—  	 	 	 	16	 	
Foreign exchange gains (losses)	  	 	(8	)	 	 	—  	 	 	 	(8	)	 	 	(3	)	 	 	—  	 	 	 	(3	)	
Other	  	 	(4	)	 	 	26	 	 	 	22	 	 	 	(11	)	 	 	30	 	 	 	19	 	
 	  				 				 				 				 				 				
Total inv. portfolio gains (losses)	  	 	50	 	 	 	(717	)	 	 	(667	)	 	 	130	 	 	 	(539	)	 	 	(409	)	
Other FAS 133 adjustments	  	 	(8	)	 	 	—  	 	 	 	(8	)	 	 	(31	)	 	 	—  	 	 	 	(31	)	
 	  				 				 				 				 				 				
Total gains (losses)	  	 	42	 	 	 	(717	)	 	 	(675	)	 	 	99	 	 	 	(539	)	 	 	(440	)	
Income tax expense (benefit)	  	 	10	 	 	 	(171	)	 	 	(161	)	 	 	31	 	 	 	(123	)	 	 	(92	)	
 	  				 				 				 				 				 				
Net gains (losses)	  	$	32	 	 	$	(546	)	 	$	(514	)	 	$	68	 	 	$	(416	)	 	$	(348	)	

(2)	The quarter includes impairments of $3M for fixed maturities and $2M for equities. Year to date includes impairments of $4M for fixed maturities and $3M for equities.	

Investment Gains (Losses)	  	Page 24	

					
	 	ACE Limited
Capital Structure
(in millions of U.S. dollars)
(Unaudited)	 	 	

 	  	June 30
2005
	 	 	March 31
2005
	 	 	December 31
2004
	 	 	December 31
2003
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	
Total short-term debt	  	$	147	 	 	$	147	 	 	$	146	 	 	$	546	 	
Total long-term debt	  	 	1,849	 	 	 	1,849	 	 	 	1,849	 	 	 	1,349	 	
 	  				 				 				 				
Total debt	  	 	1,996	 	 	 	1,996	 	 	 	1,995	 	 	 	1,895	 	
					
Total trust preferreds	  	 	412	 	 	 	412	 	 	 	412	 	 	 	475	 	
					
Perpetual preferred	  	 	557	 	 	 	557	 	 	 	557	 	 	 	557	 	
Ordinary shareholders’ equity	  	 	9,939	 	 	 	9,409	 	 	 	9,286	 	 	 	8,254	 	
 	  				 				 				 				
Total shareholders’ equity	  	$	10,496	 	 	$	9,966	 	 	$	9,843	 	 	$	8,811	 	
 	  				 				 				 				
Total capitalization	  	$	12,904	 	 	$	12,374	 	 	$	12,250	 	 	$	11,181	 	
Tangible shareholders’ equity (1)	  	$	7,797	 	 	$	7,275	 	 	$	7,148	 	 	$	6,018	 	
					
Leverage ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Debt/ total capitalization	  	 	15.5	%	 	 	16.1	%	 	 	16.3	%	 	 	16.9	%	
Debt plus trust preferreds/ total capitalization	  	 	18.7	%	 	 	19.5	%	 	 	19.6	%	 	 	21.2	%	
Debt/ tangible equity	  	 	25.6	%	 	 	27.4	%	 	 	27.9	%	 	 	31.5	%	
Debt plus trust preferreds/ tangible equity	  	 	30.9	%	 	 	33.1	%	 	 	33.7	%	 	 	39.4	%	
Debt plus total preferred stock/ total capitalization	  	 	23.0	%	 	 	24.0	%	 	 	24.2	%	 	 	26.2	%	

(1)	Tangible equity is equal to shareholders’ equity less goodwill.	

Capital Structure	  	Page 25	

					
	 	ACE Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)	 	 	

 	  	Three months ended June 30
	 	 	Six months ended June 30
	 	
 	  	2005
	 	 	2004
	 	 	2005
	 	 	2004
	 	
 	  	 	 	 	(Restated)	 	 	 	 	 	(Restated)	 	
Numerator	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	443	 	 	$	391	 	 	$	898	 	 	$	809	 	
Perpetual preferred dividend	  	 	(11	)	 	 	(11	)	 	 	(22	)	 	 	(22	)	
 	  				 				 				 				
Income to ordinary shares, excl. net realized gains (losses)	  	 	432	 	 	 	380	 	 	 	876	 	 	 	787	 	
Net realized gains (losses), net of income tax	  	 	24	 	 	 	32	 	 	 	6	 	 	 	68	 	
 	  				 				 				 				
Net income available to the holders of ordinary shares	  	$	456	 	 	$	412	 	 	$	882	 	 	$	855	 	
 	  				 				 				 				
Rollforward of ordinary shares	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares - beginning of period	  	 	287,353,327	 	 	 	282,714,909	 	 	 	284,478,525	 	 	 	279,897,193	 	
Issued under employee stock purchase plan	  	 	—  	 	 	 	(2	)	 	 	109,411	 	 	 	125,629	 	
Stock (cancelled) granted	  	 	(3,505	)	 	 	(347,919	)	 	 	1,340,712	 	 	 	911,686	 	
Issued for option exercises	  	 	723,617	 	 	 	1,237,457	 	 	 	2,144,791	 	 	 	2,669,937	 	
 	  				 				 				 				
Ordinary shares - end of period	  	 	288,073,439	 	 	 	283,604,445	 	 	 	288,073,439	 	 	 	283,604,445	 	
 	  				 				 				 				
Denominator	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding	  	 	283,972,257	 	 	 	280,007,156	 	 	 	283,595,386	 	 	 	279,477,772	 	
Effect of other dilutive securities	  	 	4,478,907	 	 	 	5,364,008	 	 	 	4,577,133	 	 	 	5,560,172	 	
 	  				 				 				 				
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	288,451,164	 	 	 	285,371,164	 	 	 	288,172,519	 	 	 	285,037,944	 	
 	  				 				 				 				
Basic earnings per share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	1.52	 	 	$	1.36	 	 	$	3.09	 	 	$	2.81	 	
Net realized gains (losses), net of income tax	  	 	0.09	 	 	 	0.11	 	 	 	0.02	 	 	 	0.25	 	
 	  				 				 				 				
Net income	  	$	1.61	 	 	$	1.47	 	 	$	3.11	 	 	$	3.06	 	
 	  				 				 				 				
Diluted earnings per share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	1.50	 	 	$	1.33	 	 	$	3.04	 	 	$	2.76	 	
Net realized gains (losses), net of income tax	  	 	0.08	 	 	 	0.11	 	 	 	0.02	 	 	 	0.24	 	
 	  				 				 				 				
Net income	  	$	1.58	 	 	$	1.44	 	 	$	3.06	 	 	$	3.00	 	

(1)	See page 27 Non-GAAP Financial Measures.	

Earnings per share	  	Page 26	

					
	 	ACE Limited
Non-GAAP Financial Measures
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Regulation G - Non-GAAP Financial Measures
 
In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. A reconciliation of book value per share to diluted book value per ordinary share is provided on page 28.
 
In presenting our segment operating results we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting losses and loss expenses, life and annuity benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense and net realized gains (losses).
 
The following non-GAAP measure is a common performance measurement and is defined as income (loss) excluding net realized gains (losses) and the tax expense on net realized gains (losses). 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) because the amount of these gains (losses) is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

 	  	2Q-05
	  	1Q-05
	 	 	4Q-04
	  	3Q-04
	 	 	2Q-04
	  	YTD
2005
	  	YTD
2004
	  	Full Year
2004
	
 	  	 	  	(Restated)	 	 	(Restated)	  	(Restated)	 	 	(Restated)	  	 	  	(Restated)	  	(Restated)	
Net income (loss), as reported	  	$	467	  	$	437	 	 	$	286	  	$	(4	)	 	$	423	  	$	904	  	$	877	  	$	1,159	
Net realized gains (losses)	  	 	32	  	 	(14	)	 	 	130	  	 	(32	)	 	 	42	  	 	18	  	 	99	  	 	197	
Income tax expense on net realized gains (losses)	  	 	8	  	 	4	 	 	 	12	  	 	1	 	 	 	10	  	 	12	  	 	31	  	 	44	
 	  			  				 			  				 			  			  			  			
Income excluding net realized gains (losses)	  	$	443	  	$	455	 	 	$	168	  	$	29	 	 	$	391	  	$	898	  	$	809	  	$	1,006	

			
Reconciliation Non-GAAP	  	Page 27	

					
	 	ACE Limited
Diluted Book Value per Ordinary Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)	 	 	
 
Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share

 	  	June 30
2005
	 	 	March 31
2005
	 	 	December 31
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	
Shareholders’ equity	  	$	10,496	 	 	$	9,966	 	 	$	9,843	 	
Net proceeds from assumed conversions of options	  	 	468	 	 	 	271	 	 	 	312	 	
Proceeds from issuance of preferred shares	  	 	(557	)	 	 	(557	)	 	 	(557	)	
 	  				 				 				
Numerator for diluted book value per share calculation	  	 	10,407	 	 	 	9,680	 	 	 	9,598	 	
Less: goodwill	  	 	2,699	 	 	 	2,691	 	 	 	2,695	 	
 	  				 				 				
Numerator for diluted tangible book value per share	  	$	7,708	 	 	$	6,989	 	 	$	6,903	 	
 	  				 				 				
Ordinary shares outstanding - end of period	  	 	288,073,439	 	 	 	287,353,327	 	 	 	284,478,525	 	
Shares issued from assumed conversions of options	  	 	15,478,846	 	 	 	9,346,765	 	 	 	10,830,932	 	
 	  				 				 				
Denominator for diluted and diluted tangible book value	  	 	303,552,285	 	 	 	296,700,092	 	 	 	295,309,457	 	
 	  				 				 				
Book value per ordinary share	  	$	34.50	 	 	$	32.74	 	 	$	32.64	 	
Diluted book value per ordinary share	  	$	34.28	 	 	$	32.63	 	 	$	32.50	 	
Diluted tangible book value per ordinary share	  	$	25.39	 	 	$	23.56	 	 	$	23.38	 	

Reconciliation Book Value	  	Page 28	

					
	 	ACE Limited
Comprehensive Income
(in millions of U.S. dollars)
(Unaudited)	 	 	
 
Consolidated Statement of Comprehensive Income

 	  	2Q-05
	 	 	1Q-05
	 	 	4Q-04
	 	 	3Q-04
	 	 	2Q-04
	 	 	YTD
2005
	 	 	YTD
2004
	 	 	Full Year
2004
	 	
 	  	 	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	(Restated)	 	 	 	 	 	(Restated)	 	 	(Restated)	 	
Net income (loss)	  	$	467	 	 	$	437	 	 	$	286	 	 	$	(4	)	 	$	423	 	 	$	904	 	 	$	877	 	 	$	1,159	 	
Net unrealized appreciation (depreciation) on investments	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized appreciation (depreciation) on investments	  	 	248	 	 	 	(301	)	 	 	169	 	 	 	408	 	 	 	(634	)	 	 	(53	)	 	 	(395	)	 	 	182	 	
Reclassification adjustment for net realized gains (losses) included in net income	  	 	(56	)	 	 	(48	)	 	 	(96	)	 	 	(32	)	 	 	(83	)	 	 	(104	)	 	 	(144	)	 	 	(272	)	
Amortization of net unrealized appreciation related to held to maturity securities	  	 	(2	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(2	)	 	 	—  	 	 	 	—  	 	
Cumulative translation adjustment	  	 	(68	)	 	 	(13	)	 	 	126	 	 	 	33	 	 	 	(24	)	 	 	(81	)	 	 	(22	)	 	 	137	 	
Minimum pension liability adjustment	  	 	4	 	 	 	2	 	 	 	(45	)	 	 	3	 	 	 	1	 	 	 	6	 	 	 	(1	)	 	 	(43	)	
Income tax (expense) benefit related to other comprehensive income items	  	 	(21	)	 	 	72	 	 	 	(35	)	 	 	(83	)	 	 	180	 	 	 	51	 	 	 	139	 	 	 	21	 	
 	  				 				 				 				 				 				 				 				
Other comprehensive income (loss)	  	 	105	 	 	 	(288	)	 	 	119	 	 	 	329	 	 	 	(560	)	 	 	(183	)	 	 	(423	)	 	 	25	 	
 	  				 				 				 				 				 				 				 				
Comprehensive income (loss)	  	$	572	 	 	$	149	 	 	$	405	 	 	$	325	 	 	$	(137	)	 	$	721	 	 	$	454	 	 	$	1,184	 	

			
Comprehensive Income	  	Page 29	

					
	 	ACE Limited
Glossary	 	 	
 
Annualized return on ordinary shareholders’ equity (ROE): Income (loss) excluding net realized gains (losses) less perpetual preferred securities divided by average ordinary shareholders’ equity for the period. To annualize a quarterly rate multiply by four.
 
Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial services operations. Calculated on a GAAP basis.
 
Diluted book value per ordinary share: Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
 
Diluted tangible book value per ordinary share: Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued.
 
Effective tax rate: Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).
 
FAS 115: Unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity.
 
Life underwriting income: Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses. 
 
NM: Not meaningful.
 
Ordinary shareholders’ equity: Shareholders’ equity less perpetual preferred shares.
 
P & C: Property and casualty.
 
Property and casualty combined ratios: Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios excluding life reinsurance business and financial services segment. Calculated on a GAAP basis.
 
Return on ordinary shareholders’ equity (ROE): Income (loss) excluding net realized gains (losses) less perpetual preferred securities divided by average ordinary shareholders’ equity.
 
Tangible equity: Shareholders’ equity less goodwill.
 
Total capitalization: Short-term debt, long-term debt, trust preferreds, perpetual preferred shares and shareholders’ equity.
 
YTD: Year to date.

Glossary	  	Page 30