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) April 1, 1998

ACE LIMITED

(Exact name of registrant as specified in its charter)

Cayman Islands                       1-11778                   Not Applicable
--------------------------------------------------------------------------------
(State or other jurisdiction       (Commission                (I.R.S. Employer
of Incorporation)                  File Number)              Identification No.)

The ACE Building
30 Woodbourne Avenue
Hamilton, Bermuda                                  HM 08
--------------------------------------------------------------------------------
(Address of principal executive offices)         (Zip Code)	

Registrant's telephone number, including area code: (441) 295-5200

Not Applicable

(Former name or former address, if changed since last report)

Item 2. Acquisition or Disposition of Assets.
On April 1, 1998, ACE Limited completed the acquisition of all of the outstanding shares of capital stock of CAT Limited. The total consideration paid in the acquisition was approximately $711 million, subject to certain post- closing adjustments.
Included as Exhibit 99.3 to this Current Report on Form 8-K is a copy of the press release dated April 1, 1998 announcing such completion.
Item 7. Financial Statements and Exhibits.
(a) Audited Financial Statements of CAT Limited.
See Exhibit 99.1
(b) Pro Forma Financial Information See Exhibit 99.2
(c) Exhibits.
2.1 Stock Purchase Agreement dated as of March 25, 1998, by and among ACE Limited, CAT Limited and the shareholders of CAT Limited (Incorporated by reference to Exhibit 2.1 to ACE Limited's Registration Statement on Form S-3 (Registration No. 333-49257)).
99.1 Audited Financial Statements of CAT Limited as of and for the years ended December 31, 1997 and 1996.
99.2 Unaudited Pro Forma Condensed Consolidated Financial Information of ACE Limited.
99.3 Press release, dated April 1, 1998
2

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.

Dated: April 16, 1998                       ACE LIMITED

                                            By:  Christopher Z. Marshall
                                                 -----------------------
                                                 Christopher Z. Marshall
                                                 Chief Financial Officer	

EXHIBIT INDEX

Exhibit
Number                        Description
-------                       -----------
99.1               Audited Financial Statements of CAT Limited as of and for the
                   year ended December 31, 1997 and 1996

99.2               Unaudited Pro Forma Condensed Consolidated Financial
                   Information of ACE Limited.

99.3               Press release, dated April 1, 1998	

Exhibit 99.1 Audited Financial Statements
CAT Limited
December 31, 1997 and 1996

[LOGO OF ERNST & YOUNG LETTERHEAD]
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF CAT LIMITED
We have audited the accompanying balance sheets of CAT Limited as of December 31, 1997 and 1996 and the related statements of income, shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the company at December 31, 1997 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

                                                               /s/ Ernst & Young

Hamilton, Bermuda
January 20, 1998	

CAT LIMITED
 (Incorporated in Bermuda)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
(expressed in thousands of United States dollars except share and per share amounts)

                                                                    1997        1996
                                                                    ----        ----
                                     ASSETS

Fixed maturity securities at fair value (amortized cost $398,442
  and $365,045 at December 31, 1997 and 1996,
  respectively) (Note 3)                                          $399,540     $363,865
Investment in insurance linked securities (Note 3)                  19,406         -
Short term investments (Note 3)                                     33,831       17,437
Equity securities at fair value (Note 3)                            28,009       10,165
                                                                  --------     --------
Total investments                                                  480,786      391,467

Cash and cash equivalents                                           35,133       73,393
Investment in Enterprise (Note 7)                                   72,597         -
Premiums receivable                                                 17,133       21,114
Prepaid reinsurance premium (Note 5)                                 1,571         -
Accrued interest                                                     6,337        4,200
Other assets (Note 7)                                                1,777        4,612
Deferred policy acquisition costs                                    2,354        2,446
Net fixed assets                                                       443          186
                                                                  --------     --------
Total Assets                                                      $618,131     $497,418
                                                                  ========     ========

                                    LIABILITIES

Contract liabilities and accruals:
 Reserve for losses, loss expenses and experience
   refunds (Note 4)                                               $ 36,862     $ 42,121
 Unearned premium                                                   24,411       25,420
 Reinsurance balances payable (Note 5)                               1,469         -
Accrued expenses (Note 6)                                            8,776        6,853
Liability for call options                                           6,173         -
                                                                  --------     --------
Total Liabilities                                                   77,691       74,394
                                                                  --------     --------
Commitments and Contingencies (Note 8)

                                SHAREHOLDERS' EQUITY
                               (Notes 6, 9, 10 and 12)

Voting common stock, $1.00 par value 4,620,000 shares
 authorized; 2,694,497 shares issued and outstanding                 2,695        2,695
Additional paid in capital                                         251,995      251,995
Net unrealized gains (losses) on investments                        18,728       (1,015)
Retained earnings                                                  267,022      169,349
                                                                  --------     --------
Total Shareholders' Equity                                         540,440      423,024
                                                                  --------     --------

Total Liabilities and Shareholders' Equity                        $618,131     $497,418
                                                                  ========     ========	

See notes to financial statements

CAT LIMITED
STATEMENTS OF INCOME
DECEMBER 31, 1997 AND 1996
 (expressed in thousands of United States dollars except per share data)

                                                  1997         1996
                                                --------     --------
Premiums written (Note 6)                       $147,152     $136,186
Premiums ceded (Note 5)                          (11,270)        (357)
                                                --------     --------
Net premiums written                             135,882      135,829
Decrease (increase) in unearned premiums           2,579        5,309
                                                --------     --------
Premiums earned                                  138,461      141,138

Net investment income (Note 3)                    23,207       25,056
Realized (losses) gains on sales of
 investments (Note 3)                               (242)         157
                                                --------     --------
Total revenue                                    161,426      166,351
Losses, loss expenses and experience refunds
 (Notes 4 and 6)                                  25,627       56,731
Policy acquisition costs                          13,873       13,641
Administration                                    10,983        7,508
Consulting and technology services
 (Note 8)                                          5,193        3,599
                                                --------     --------
Total expenses                                    55,676       81,479
                                                --------     --------
Net income                                      $105,750     $ 84,872
                                                ========     ========	

See notes to financial statements

CAT LIMITED
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996
 (expressed in thousands of United States dollars)

                                                           1997         1996
                                                           ----         ----
Cash Flows from Operating Activities:
  Net income                                            $105,750     $ 84,872
  Adjustments to reconcile net income to cash
  provided by operating activities:
     Realized losses (gains) on sales of
        investments                                          242         (157)
     Amortization of premium on debt securities              834        1,002
     Depreciation                                            122          229
     Premiums receivable                                   3,981        8,921
     Other assets                                            790       (3,451)
     Prepaid reinsurance premium                          (1,571)         -
     Unearned premium                                     (1,009)      (5,309)
     Reserve for losses, loss expenses and
        experience refunds                                (5,259)       8,490
     Reinsurance balances payable                          1,469          (31)
     Other liabilities                                     1,923        1,874
                                                        --------     --------
  Net cash provided by operating activities              107,272       96,440
                                                        --------     --------
Cash Flows from Investing Activities:
  Proceeds from sales and paydowns
     on fixed maturity securities                        677,191      329,732
  Purchases of fixed maturity securities                (711,481)    (443,589)
  Net sales (purchases) of short-term investments        (16,551)      (7,439)
  Purchase of equity securities                          (15,004)     (10,000)
  Purchase of investment in Enterprise                   (60,000)         -
  Purchase of insurance linked securities                (19,308)         -
                                                        --------     --------
                                                        (145,153)    (131,296)
  Fixed asset purchases                                     (379)          (8)
                                                        --------     --------
  Net cash used in investing activities:                (145,532)    (131,304)
                                                        --------     --------
Cash flows from Financing Activities:
  Proceeds from borrowings                               100,000          -
  Repayment of borrowings                               (100,000)         -
  Decrease in due to shareholder (Note 6)                    -        (31,869)
                                                        --------     --------
  Net cash used in financing activities                      -        (31,869)
                                                        --------     --------
Net decrease in cash and cash equivalents                (38,260)     (66,733)

Cash and cash equivalents, beginning of year              73,393     (140,126)
                                                        --------     --------
Cash and cash equivalents, end of year                   $35,133     ($73,393)
                                                        ========     ========	

See notes to financial statements

CAT LIMITED
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1996
 (expressed in thousands of United States dollars except share amounts)

                                                              Unrealized
                                              Additional        Gains                         Total
                                   Common      Paid In       (Losses) on       Retained    Shareholders'
                                   Stock       Capital       Investments       Earnings       Equity
                                   ------     ----------     -----------       --------    -------------
Balance, December 31, 1995         $2,695       $251,995         $ 1,429       $ 84,477         $340,596

Net income                              -              -               -         84,872           84,872
Change in unrealized gains
 (losses) on investments                -              -          (2,444)             -           (2,444)
                                   ------     ----------     -----------       --------    -------------
Balance, December 31, 1996          2,695        251,995          (1,015)       169,349          423,024

Net income                              -              -               -        105,750          105,750
Change in unrealized gains
 (losses) on investments                -              -          19,743              -           19,743
Dividends issued (Note 7)               -              -               -         (8,077)          (8,077)
                                   ------     ----------     -----------       --------    -------------
Balance, December 31, 1997         $2,695       $251,995         $18,728       $267,022         $540,440
                                   ======     ==========     ===========       ========    =============	

See notes to financial statements

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
1. Operations
CAT Limited (the "Company") specializes in writing property catastrophe reinsurance around the world. Approximately two-thirds of this business is accepted from the United States with the remainder distributed throughout the rest of the world, principally Canada, Australia and Europe.
The Company was incorporated in Bermuda on May 21, 1993 as Centre Cat Limited.
The Company is planning an initial public offering of its Common Shares and in that regard in December 1997 submitted a draft registration statement to the U.S. Securities and Exchange Commission.
2. Significant accounting policies
The financial statements of the Company have been prepared on the basis of accounting principles generally accepted in the United States ("U.S. GAAP"). Significant accounting policies are summarized as follows:
(a) Investments
Investments, which include fixed maturity securities, short-term investments, equity securities, interest rate swaps and insurance linked securities, are carried at fair value. Insurance linked securities are contracts that contain insurance risk and include fixed maturity instruments ("catastrophe bonds"), and options and swaps. Realized gains or losses on the sale or maturity of investments are determined by specific identification and are included in earnings.
Fixed maturity securities, short-term investments, equity securities and catastrophe bonds are considered available for sale. The fair value is determined from published market prices or independent valuations. The amortized cost of fixed maturity securities and catastrophe bonds includes the amortization and accretion of premiums and discounts and factors prepayment rates when applicable. Unrealized gains or losses are recognized as a separate component of shareholders' equity.
The Company participates in interest rate swap agreements to modify the interest rate characteristics of its investment portfolio and hedge designated debt securities. The interest rate differential, to be paid or received as interest rates change, is accrued and recognized as an adjustment to interest income associated with the corresponding designated securities. The related amount payable to or receivable from counterparties is included in accrued interest. Changes in the fair market value of these swap agreements are included in a separate component of shareholders' equity. Gains and losses on terminations of interest-rate swap agreements are deferred and recognized as an adjustment to the amortized cost of the specified debt securities. In the event of the early maturity or sale of a designated investment security, the portion of the unrealized gain or loss on the swap allocated to the disposed debt security is realized.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
2. Significant accounting policies, cont'd.
Insurance linked options and swaps include contracts that are valued based on certain meteorological or seismological conditions at defined locations, and contracts that contain insurance risk. Income or loss on these contracts is included in earnings and is derived from the net amounts received or paid, gains and losses on terminations (of swap agreements) and the difference between the fair value and the cost (of swap agreements). The fair value of all contracts is based on an option valuation model due to the lack of a ready market. Changes in fair value are recognized in earnings.
(b) Cash and Cash Equivalents
Cash and cash equivalents are defined as cash and certain highly liquid investments with a maturity date of three months or less from the date of purchase.
(c) Premiums
Premiums written include all one-year contracts plus the annualized value of multiple-year contracts. Reinsurance premiums are recognized, net of any applicable retrocessional coverage, as revenue evenly over the terms of the particular contracts.
(d) Policy Acquisition Costs
Policy acquisition costs such as brokerage and certain other underwriting expenses vary with and are directly related to the production of business. Such costs are deferred to the extent recoverable from future earned premium and anticipated investment income, and amortized evenly over the terms of the particular contracts.
(e) Losses, Loss Expenses and Experience Refunds
The reserve for losses, loss expenses and experience refunds represents estimates of the ultimate cost of all losses and experience refunds incurred but not paid through December 31 of each year.
The loss estimates include reserves based on reports from ceding companies and additional case reserves as determined by management. Inherent in the estimates of ultimate losses are expected trends in claim severity and other factors that could vary as claims are settled. Accordingly, ultimate losses could differ from the amounts recorded in the financial statements. As adjustments become necessary, such adjustments are reflected in current operations.
The reserve for experience refunds represents estimates of the total liability incurred under profit commission provisions of various contracts. These estimates are continually reviewed and, as adjustments become necessary, such adjustments are reflected in current operations. Since the reserve is based on estimates, the ultimate settlement of experience refunds may vary from the amount provided.
The Company recognizes an asset or liability to the extent that there is an obligation to receive or pay cash or other consideration due to experience under the contracts.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
2. Significant accounting policies, cont'd.
(f) Depreciation
Depreciation is provided on property and equipment over the expected useful lives of the assets on a straight-line basis.
(g) Foreign Currencies
Foreign currency monetary assets and liabilities are translated into U.S. Dollars at rates prevailing on balance sheet dates. Revenue and expenses are translated at the rates prevailing on the date of the transactions. Gains or losses arising from foreign currency transactions are credited or charged to income. The Company's functional currency is the U.S. dollar.
(h) Stock Options and Equity Award Agreements
The Company continues to follow Accounting Principles Board Opinion No. 25 ("APB 25") and related interpretations in accounting for its stock options and equity award agreements payable in stock, and disclosures have been made in accordance with Financial Accounting Standard Statement No. 123 ("FAS 123") to the extent applicable.
No compensation expense was recognized at the time equity awards were issued (except for an accrual for cash paid or given up to purchase the awards), since there was no intrinsic value inherent in the awards at the time. No compensation expense has been recorded for appreciation of the awards to become exercisable or settled (a change of control, liquidation, or in certain cases, an initial public offering of Company Shares) have not been satisfied.
(i) Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management believes that any such differences will not be significant.
(j) Pending Accounting Standard
The Financial Accounting Standard Board has recently issued Statement of Financial Accounting Standard No. 130 ("FAS 130"), Reporting Comprehensive Income. FAS 130 is effective for periods beginning after December 15, 1997. The Company is currently considering the effects of this statement on the Company's financial statement presentation and disclosures.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
3. Investments
Total fixed maturities and certain equity securities are managed by Miller, Anderson & Sherrerd, LLC ("MAS") and Zurich Investment Management, Inc. (formerly Centre Investment Services, Inc.) ("CIS"), pursuant to investment management agreements. MAS and CIS are affiliates of certain shareholders.
The following is a summary of investments available for sale as at December 31:

                                    Cost or      Gross         Gross      Estimated
                                   Amortized   Unrealized    Unrealized      Fair
                                     Cost        Gains         Losses       Value
                                   ---------   ----------    ----------   ---------
 1997
 ----
U.S. Treasury securities and
  obligations of U.S.
  government agencies              $ 143,322   $      520    $      123   $ 143,719
Mortgage backed securities           113,267        1,240           285     114,222
Asset backed securities              117,202          396           165     117,433
Corporate obligations                 58,479          833         1,315      57,997
                                   ---------   ----------    ----------   ---------
Total fixed maturities and
  short-term investments             432,270        2,989         1,888     433,371
Catastrophe bonds                     20,148          121           -        20,269
Equity securities                     25,003        3,006           -        28,009
                                   ---------   ----------    ----------   ---------
Total investments available for
  sale                             $ 477,421   $    6,116    $    1,888   $ 481,649
                                   =========   ==========    ==========   =========	

Insurance linked securities include the catastrophe bonds of $20,269,000 together with heating index options with a fair value of $(863,000).

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
3. Investments available for sale, cont'd.

                                    Cost or      Gross         Gross      Estimated
                                   Amortized   Unrealized    Unrealized      Fair
                                     Cost        Gains         Losses       Value
                                   ---------   ----------    ----------   ---------
1996
----
U.S. Treasury securities and
  obligations of U.S.
  government agencies              $ 106,756   $       85    $      399   $ 106,442
Mortgage backed securities           136,777          375         1,668     135,484
Asset backed securities              101,973          504           239     102,238
Corporate obligations                 36,976          224            62      37,138
                                   ---------   ----------    ----------   ---------
Total fixed maturities and
  short-term investments             382,482        1,188         2,368     381,302
Equity securities                     10,000          165           -        10,165
                                   ---------   ----------    ----------   ---------
Total investments available
  for sale                         $ 392,482   $    1,353    $    2,368   $ 391,467
                                   =========   ==========    ==========   =========	

The amortized cost and estimated fair value of debt securities at December 31, 1997, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities in cases where the issuers of the securities have the right to prepay obligations without prepayment penalties.

                                                   Cost or       Estimated
                                                  Amortized         Fair
                                                     Cost          Value
                                                  ---------      ---------
Due in one year or less                           $  49,989      $  50,020
Due after one year through five years               122,386        122,591
Due after five years through ten years               19,134         18,664
Due after ten years                                  10,292         10,441
Mortgage and asset backed securities                230,469        231,655
                                                  ---------      ---------
Total fixed maturities and
  short-term investments                            432,270        433,371
Catastrophe bonds due in one year or less            14,148         14,215
Catastrophe bonds due after five years
  through ten years                                   6,000          6,054
                                                  ---------      ---------

                                                  $ 452,418      $ 453,640
                                                  =========      =========	

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
3. Investments available for sale, cont'd.
Net investment income is comprised of the following:

                                                     Years ended
                                                     December 31,
                                                 -------------------
                                                  1997        1996
                                                 -------------------
Fixed maturities and short-term investments      $23,459     $19,658
Equity securities                                     --          --
Cash and cash equivalents                          3,887       6,112
Catastrophe bonds                                    339          --
Other                                             (2,529)        210
                                                 -------     -------
                                                  25,156      25,980
Investment expenses                                 (748)       (724)
Foreign exchange                                  (1,201)       (200)
                                                 -------     -------
Net investment income                            $23,207     $25,056
                                                 =======     =======	

The analysis of realized gains (losses) and the change in unrealized gains (losses) on investments is as follows:

                                                     Years ended
                                                     December 31,
                                                 -------------------
                                                  1997        1996
                                                 -------------------
Gross realized gains                             $ 1,266     $   988
Gross realized losses                             (1,508)       (831)
                                                 -------     -------
Net realized (losses) gains on sale of
  investments                                       (242)        157
Unrealized gains (losses)                         19,743      (2,444)
                                                 -------     -------
Total realized and unrealized gains (losses)
  on investments                                 $19,501     $(2,287)
                                                 =======     =======	

The carrying values of other financial instruments approximate their fair value due to the short term nature of the balances.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
3. Investments available for sale, cont'd.
During the year, the Company entered into one interest rate swap with a maturity date of April 25, 2007. The agreement entitles the Company to receive from the counterparty on a quarterly basis 3 month LIBOR and pay a fixed rate of 7.253% on a semi-annual basis. The notional amount of the swap is $10,000,000. This notional amount does not represent an amount exchanged by the parties and is not a measure of the Company's exposure through the use of derivatives. The Company is exposed to credit related losses in the event of non-performance by the counterparty to the swap agreement, however, the Company does not expect the counterparty to fail.
At December 31, 1997, the swap had a fair market value of $(699,000) and this was recorded with unrealized gains on investments as a separate component of shareholder's equity. The Company had a net interest expense of $92,000 on this swap for the year.
4. Losses, loss expenses and experience refunds
The activity in the reserve for losses, loss expenses and experience refunds is summarized below.

                                                   1997       1996
                                                 --------    -------
Balance, beginning of year                       $ 42,121    $33,631
Adjust for experience refunds                     (16,432)    (8,281)
                                                 --------    -------
Loss reserve balance, beginning of year            25,689     25,350
                                                 --------    -------
Losses incurred related to:
  Current year                                     22,541     44,079
  Prior years                                      (4,526)     3,921
                                                 --------    -------
Total losses incurred                              18,015     48,000
                                                 --------    -------

Losses paid related to
  Current year                                      6,089     25,179
  Prior years                                      15,334     22,482
                                                 --------    -------
Total losses paid                                  21,423     47,661
                                                 --------    -------

Loss reserve balance, end of year                  22,281     25,689

Adjust for experience refunds                      14,581     16,432
                                                 --------    -------

Balance, end of year                             $ 36,862    $42,121
                                                 ========    =======	

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
4. Losses, loss expenses and experience refunds, cont'd.
Losses incurred in 1996 relating to prior years are due primarily to the January 17, 1994 Northridge, California earthquake and floods in Europe. The reduction of losses in respect or prior years, in the year ended December 31, 1997, reflects favourable development of certain events causing ultimate losses to fall below the cedants' retentions. Corresponding reinstatement premiums receivable have been accrued for the effect of prior year losses.
The Company has exposure to loss from ice storms in Canada which occurred subsequent to year end. The current estimate of the gross loss before retrocessional recoveries or reinstatement premium is approximately $12,000,000. The current range of estimated loss does not impact the Company's financial position significantly.
5. Ceded reinsurance
During 1997, the Company utilized reinsurance to reduce its exposure to large losses. The Company currently has in place contracts that provide for recovery of certain claims and claims expenses from reinsurers in excess of various retentions. If reinsurers are unable to meet their obligations under the agreements, the Company would remain liable to the extent that any reinsurance company fails to meet its obligations. To date, there have been no losses reported to indicate that the Company's reinsurance coverage will be reached, and there are no amounts recoverable for claims and claim expenses from reinsurers.
6. Transactions with affiliated parties
The Company reinsures several companies whose ultimate parents, the Zurich Insurance Group ("Zurich") and the Chubb Insurance Group, are also the ultimate parents of two of the Company's shareholders. In 1997 and 1996 written premiums from this business totaled $5,321,709 and $9,119,000 respectively.
Prior to the Company obtaining a rating from A.M. Best and where a rating was instrumental to the transaction, the Company assumed business as a retrocession of a rated reinsurer, Centre Solutions (Bermuda) Limited ("Centre Solutions"), (formerly Centre Reinsurance Limited), whose ultimate parent is Zurich. In 1997 and 1996, transactions of this nature took place involving ceding commissions to Centre Solutions of $1,055,000 and $1,270,000 respectively.
In 1995, the Company gave a guarantee to Centre Solutions for part of their direct investment in CHA Insurance Company Limited ("CHA"). An amount of $750,000 is included in accrued expenses as due to Centre Solutions representing the amount of loss the Company expects to incur under the guarantee.
In 1995, the Company agreed to repurchase 234,954 Common Shares from Centre Solutions for $135.64 per share. This agreement with Centre Solutions was approved by the Board of Directors at a meeting on December 5, 1995 and the settlement occurred in January 1996. As a result of the repurchase the Company ceased to be controlled by Centre Solutions.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
7. Acquisition of Enterprise
On January 17, 1997 the Company made a $60,000,000 investment in Enterprise Reinsurance Holdings Corporation ("Enterprise"), which is owned by the Company, its shareholders and other third parties. The Company is obligated to guarantee 50% of certain indebtedness of Enterprise (the "Enterprise Guarantee"), such indebtedness being limited to an aggregate principal amount of $100,000,000 for period of not more than five years. Currently there is no such indebtedness outstanding. The Company may unilaterally terminate the guarantee upon the occurrence of certain corporate events, including an initial public offering of its Common Shares, and has notified Enterprise that the Enterprise Guarantee will terminate upon consummation of the Offering. Immediately following this investment, the Company dividend to its stockholders $1,904,000 of its holdings of Enterprise's stock and issued a dividend to its shareholders consisting of options (the "Call Options") to purchase most of the remaining stock of Enterprise held by the Company.
The value of the Call Options of $6,173,000 was estimated using a binomial option pricing model.
Included in other assets at December 31, 1996 is $2,080,000 of promissory notes, payable on demand, and with interest accruing at 6% to 8%, which had been advanced for the startup costs of Enterprise. In addition, the Company guaranteed Enterprise's lease agreement for office space. In January 1997, the promissory notes were repaid in full and the lease guarantee was released.
8. Commitments and contingencies
On October 13, 1993, the Company entered into a services agreement ("Services Agreement") with Hamilton Services Limited ("Hamilton"), whereby the Company is required to pay a regular monthly fee to Hamilton for licensed software products and related service and support functions. Such monthly fee equaled $345,000. In addition, under the Services Agreement, the Company is obligated to pay an additional monthly expansion fee based on budgeted operational costs of Hamilton in proportion to the business related to or arising out of services provided pursuant to the Services Agreement, as determined each fiscal quarter. The aggregate amount of such fee payable in any 12-month period may not exceed $7,000,000. For the years ended December 31, 1997 and 1996, the total fees paid to Hamilton were $5,340,000 and $4,140,000.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
8. Commitments and contingencies, cont'd.
The Services Agreement also requires the Company to pay Hamilton contingent fees to reimburse Hamilton for certain amounts represented by equity award units under an equity award plan adopted in 1993 payable by Hamilton to its employees, which amounts are dependent, typically, upon the adjusted book value of the Company's Common Shares. The contingent amounts are payable to Hamilton upon the occurrence of, among other things, an initial public offering of Company's Common Shares and subject to the continued employment of the employees with Hamilton. The Company is obligated to reimburse Hamilton in cash, or in certain instances, for specified units, in Common Shares. The reimbursement amount is determined by reference to the excess of the adjusted net book value of the Company's Common Shares on the date of the specified event over a base price ($200.57 for 3,281 units, $157 for 11,159 units, $126.40 for 137,246 units, $102.52 for 9,560 units $99.02 for 2,104 units and $100.00 for 141,853 units). No amounts have been recorded by the Company, as of December 31, 1997, except for the cash paid to purchase 12,223 units, because a combination of conditions were required to be met, but were not considered probable as at that date. As of December 31, 1997 and 1996 respectively, and have a term of one year.
To secure certain reinsurance contracts, irrevocable letters of credit of $6,319,900 and $9,820,000 were outstanding at December 31, 1997 and 1996 respectively. These letters of credit were secured by treasury notes with a market value of $6,513,500 and $12,283,000 at December 31, 1997 and 1996 respectively, and have a term of one year.
On February 20, 1997 the Company closed on a new five year, unsecured $100,000,000 revolving credit facility. The transaction canceled the previous $50,000,000 secured credit facility which was replaced by a $30,000,000 letter of credit agreement, transferring the same collateral to the new facility, as described above.
9. Stock options and equity award agreements
(a) Stock Options
Option agreements with a current director and a shareholder who had been a director vest in accordance with the dates in the following table, or at an earlier date upon the occurrence of certain corporate and other events.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
9. Stock options and equity award agreements, cont'd.

  Exercise            Number of Shares            Exercise
    Date                Under Option                Price
  --------            ----------------            --------
October 13, 1994           4,239                   $100.00
October 13, 1995           4,239                    100.00
October 13, 1996           4,239                    100.00
October 13, 1997           4,239                    100.00
January 1, 1998            2,000                    157.00
October 13, 1998           4,239                    157.00
October 13, 1999           4,239                    157.00
October 13, 2000           4,239                    157.00
October 13, 2001           4,239                    157.00
                          ------

                          35,912
                          ======	

No options had been exercised as of December 31, 1997. During 1995, option agreements dated October 13, 1993 with shareholders relating to 254,348 shares were relinquished.
The Company has adopted the disclosure-only alternative under FAS 123. The effects of applying the fair value accounting provisions of FAS 123 to the Company's stock options results in net income that is not materially different from the amount reported.
(b) Equity award agreements
Under the Company's Equity Award Plan adopted in 1994, equity award units ("units") have been issued by the Company to certain employees. The total units granted as of December 31, 1997 amounted to 110,293.
Generally, settlement of the units is contingent on employment with the Company at the time of the payment event. However, the award agreements currently provide for partial vesting in the event of certain types of termination of employment. The settlement price ("settlement price") is determined by reference to the excess of adjusted net book value of the Company's Common Shares on the specified date over a base price ($200.57 for 1,500 units, $157.00 for 12,320 units, $126.40 for 59,667 units and $100.00 for 36,806 units) or, in the case of certain specified corporate events, such as a change of control or liquidation of the Company, the excess of the price paid in such an event over the base price.
Upon the occurrence of among other things, an initial public offering of Company Common Shares, provided that certain performance criteria shall have been met, 62,441 of these units become payable in cash or, at the option of the Compensation Committee, in Common Shares ("share units"), and 47,852 become payable in cash ("cash units").

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
9. Stock options and equity award agreements, cont'd.
Other equity award units, which have been granted as bonus payments ("bonus units"), have been accrued based on the book value of the Company's Common Shares as at the fiscal year end in the year of service. The bonus units outstanding under the Company's Equity Award Plan amounted to 4,154 at December 31, 1997. these bonus units become payable in cash upon the occurrence of certain corporate events, including an initial public offering of Company Common Shares. Settlement price is determined based on the book value of the Company's Common Shares on the specified date, or in a corporate event, the price paid for each Common Share in such event.
In addition, in 1997 and 1994, Equity Award Agreements were entered into with some directors and a service provider, respectively. These agreements have the same features as the bonus units. The cumulative unit entitlements under these agreements at December 31, 1997 and 1996 amounted to 8,367 and 8,091 respectively. Amounts of $863,000 and $813,000 had been accrued as of December 31, 1997 and 1996 respectively, representing the value of the services for which units were issued, and was derived from the book value of the Company's Common Shares at the time of service.
The cash, share and bonus units have features that make both their ultimate value and realization uncertain and, since the specified events were not considered probable at December 31, 1997, no accrual has been made as of that date for the settlement price, except as described above. Similarly, the appreciation of the fair value accounting provisions of FAS 123 to the award units would not result in an accrual. Therefore, the calculation of a FAS 123 proforma net income effect is not applicable.
10. Shareholders' equity
Under provisions of the Bye-Laws of the Company, the voting rights of the Common Shares vary, depending on whether the shareholder is a United States Person, an Insurance Company Person or a Regulated Shareholder, as defined therein.
During the year ended December 31, 1995, the Company changed its par value from $0.10 to $1.00 in order to comply with The Insurance Amendment Act of 1995.
11. Income taxes
Bermuda presently imposes no income, withholding, or capital gains taxes. In the event that any such taxes are enacted, the Company is exempt from the imposition of any Bermuda tax until March 2016.

CAT LIMITED
NOTES TO THE FINANCIAL STATEMENTS, Cont'd.
DECEMBER 31, 1997 AND 1996
(amounts in tables expressed in thousands of United States dollars except share and per share amounts)
12. Statutory information
The Bermuda Insurance Act 1978 and Related Regulations ("The Act") requires the Company to meet a minimum solvency margin. The statutory accounting practices used in the preparation of the statutory financial statements do not differ materially from the accounting principles employed in the preparation of these accounts. Statutory capital and surplus as at December 31, 1997 and 1996 was $537,650,000 ad $420,186,000 respectively, and the amount required to be maintained by the Company was $100,000,000 for 1997 and 1996. In addition a minimum liquidity ratio must be maintained whereby relevant assets, as defined by The Act, must exceed 75% of relevant liabilities.
Statutory restrictions on distributions exist to ensure that the above requirements are met. At December 31, 1997 and 1996, the amounts available for distribution were $437,650,000 and $320,186,000 respectively.
13. Comparative figures
Certain comparative figures have been reclassified to conform to the
current period's presentation.

Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF ACE LIMITED
On April 1, 1998, ACE Limited (the "Company" or "ACE") completed the acquisition of CAT Limited ("CAT"), a privately held, Bermuda based property catastrophe reinsurer. Under the terms of the agreement, the Company purchased all of the outstanding capital stock of CAT for aggregate cash consideration of approximately $711 million (the "CAT Acquisition"). The Company financed the transaction with $385 million of short-term bank borrowings from its current undrawn credit facility established in December 1997, and from cash on hand.
The following unaudited pro forma condensed consolidated statements of operations for the twelve months ended September 30, 1997 and for the three months ended December 31, 1997 present operating results of ACE as if the CAT Acquisition had occurred on October 1, 1996. The unaudited pro forma condensed consolidated balance sheet as of December 31, 1997 gives effect to the CAT Acquisition as if it had occurred on December 31, 1997. The unaudited condensed consolidated financial information of the Company is presented on a pro-forma basis to reflect the acquisition by the Company of ACE USA (formerly Westchester Specialty Group, Inc.) which was completed on January 2, 1998 and a 3 for 1 split of the company's ordinary shares effective March 2, 1998.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of ACE, included in the Company's Annual Report on Form 10-K for the year ended September 30, 1997, the unaudited consolidated financial statements of ACE included in the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1997, the audited consolidated financial statements of CAT for the year ended December 31, 1997 filed with this report and the Form 8-K/A filed on March 3, 1998 by the Company with respect to the Company's acquisition of ACE USA. The unaudited pro forma condensed consolidated financial information is not intended to be indicative of the consolidated results of operations or financial position of ACE that would have been reported if the CAT Acquisition had occurred at the dates indicated or of the consolidated results of future operations or of future financial position.
The CAT Acquisition has been accounted for as a purchase in accordance with Generally Accepted Accounting Principles. Under purchase accounting, the total purchase price is allocated to the acquired assets and liabilities based on their fair values.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

                                                                       At December 31, 1997
                                                  ----------------------------------------------------------------
                                                                  (in thousands of U.S. dollars)
                                                                                                     Pro forma
                                                                             Pro forma            combined for CAT
                                                      ACE           CAT     Adjustments   Notes      Acquisition
                                                  ----------------------------------------------------------------
Total investments and cash                        $5,301,374     $515,919     $   2,107     (1)
                                                                                 (1,643)    (1)
                                                                                385,000     (3)
                                                                               (691,000)    (4)       $5,511,757
Insurance and reinsurance balances receivable
(including reinsurance recoveries)                   781,078       17,133                                798,211
Investment in Enterprise                                -          72,597       (72,597)    (2)             -
Other assets                                         564,711       12,482         3,143     (1)          580,336
Goodwill                                             195,397                    219,984     (5)          415,381
                                                  ------------------------                            ----------
Total assets                                      $6,842,560     $618,131                             $7,305,685
                                                  ========================                            ==========

Unpaid losses and loss expenses                   $3,309,392     $ 36,862                             $3,346,254
Unearned premiums                                    457,307       24,411                                481,718
Bank debt                                            250,000                  $ 385,000     (3)          635,000
Other liabilities                                    207,309       16,418        (6,173)    (2)
                                                                                  3,607     (1)
                                                                                  3,000     (4)          224,161
                                                  ------------------------                            ----------
Total liabilities                                 $4,224,008     $ 77,691                             $4,687,133
                                                  ------------------------                            ----------

Total shareholders' equity                         2,618,552      540,440       (66,424)    (2)
                                                                               (474,016)    (6)        2,618,552
                                                  ------------------------                            ----------
Total liabilities and shareholders' equity        $6,842,560     $618,131                             $7,305,685
                                                  ========================                            ==========	

(1) Reflects the acquisition by CAT of Hamilton Services Limited for $1.6 million immediately prior to the CAT Acquisition. This acquisition was accounted for under the purchase method of accounting.
(2) Under the terms of the Stock Purchase Agreement, dated March 25, 1998, between ACE, CAT and the Shareholders of CAT (the "Stock Purchase Agreement"), CAT's ownership in Enterprise Reinsurance Holdings Corporation ("Enterprise") was distributed to CAT's existing shareholders prior to the acquisition of CAT by the Company in return for CAT shares. This adjustment reflects the disposition of Enterprise for $69 million. The shares received by CAT were retired.
(3) As part of the financing of the acquisition, ACE borrowed $385 million of short-term bank borrowings from its current undrawn credit facility established in December 1997, and from cash on hand. The interest rate on the short-term borrowing is approximately 6%.
(4) Under the terms of the Stock Purchase Agreement, ACE paid a total purchase price of approximately $691 million (the total aggregate purchase price of $711 million includes an estimate of CAT earnings for first quarter of calendar 1998 of $20 million). ACE also incurred direct transaction expenses of approximately $3 million.
(5) Under purchase accounting, the total purchase price is allocated to the acquired assets and liabilities assumed based on their fair values. Any differences between the cost of the transaction and the fair value of CAT net assets acquired would be recorded as goodwill. Based on the purchase price paid, ACE will record goodwill of approximately $220 million from this transaction. Goodwill is expected to be amortized over 25 years.
(6) To eliminate CAT's shareholder's equity.

                                Unaudited Pro Forma Condensed Consolidated Statements of Operations

                                                                       Three months ended December 31, 1997
                                                      ------------------------------------------------------------------------
                                                           (in thousands of U.S. dollars, except share and per share data)
                                                                                                             Pro forma
                                                                                 Pro forma                combined for CAT
                                                           ACE       CAT        Adjustments      Notes      Acquisition
                                                      --------------------------------------------------------------------
Net Premiums Written                                  $   144,858  $  2,912                               $        147,770
                                                      -------------------------------------               ----------------

Net Premiums Earned                                       191,302    35,468                                        226,770
Net investment income                                      71,298     4,938        $ (4,408)        (1)             71,828
Losses and loss expenses                                 (126,220)  (11,210)                                      (137,430)
Acquisition costs and administrative expenses             (42,506)  (10,517)         (2,200)        (2)            (55,223)
Interest expense                                           (3,938)        -          (5,744)        (3)             (9,682)
Income tax                                                 (2,088)        -                                         (2,088)
                                                      -------------------------------------               ----------------
Income excluding net realized gains                        87,848    18,679         (12,352)                        94,175
Net realized gains on invesments                           27,492       362                                         27,854
                                                      -------------------------------------               ----------------
Net Income                                            $   115,340  $ 19,041        $(12,352)              $        122,029
                                                      =====================================               ================

Basic Earnings per share, excluding realized gains    $      0.53                                         $           0.57
                                                      ===========                                         ================
Basic earnings per share                              $      0.70                                         $           0.74
                                                      ===========                                         ================
Weighted average shares outstanding - Basic           164,651,478                                              164,651,478
                                                      ===========                                         ================
Diluted Earnings per share, excluding realized gains  $      0.52                                         $           0.56
                                                      ===========                                         ================
Diluted earnings per share                            $      0.68                                         $           0.72
                                                      ===========                                         ================
Weighted average shares outstanding - Diluted         168,680,460                                              168,680,460
                                                      ===========                                         ================	

(1) To eliminate the estimated investment income on the cash portion of the purchase cost funded by ACE (based on a yield of 5.8% which approximates the yield on the ACE portfolio for the fiscal year ended September 30, 1997).
(2) Amortization of goodwill for the period.
(3) Interest on the $385 million short-term bank borrowing which has been calculated at a rate of approximately 6%.

                                Unaudited Pro Forma Condensed Consolidated Statements of Operations

                                                                          Year ended September 30, 1997
                                                        ------------------------------------------------------------------
                                                          (in thousands of U.S. dollars, except share and per share data)
                                                                                                             Pro forma
                                                                                   Pro forma              combined for CAT
                                                             ACE        CAT(1)    Adjustments    Notes      Acquisition
                                                        ------------------------------------------------------------------
Net Premiums Written                                    $   728,311   $137,050                            $      865,361
                                                        -----------------------------------               --------------

Net Premiums Earned                                         749,129    144,397                                   893,526
Net investment income                                       285,824     25,027     $(17,632)      (2)            293,219
Losses and loss expenses                                   (718,256)   (29,721)                                 (747,977)
Acquisition costs and administrative expenses              (147,027)   (25,732)      (8,799)      (3)           (181,558)
Interest expense                                            (15,750)         -      (22,976)      (4)            (38,726)
Income tax                                                   60,862          -                                    60,862
                                                        -----------------------------------               --------------
Income excluding net realized gains                         214,782    113,971      (49,407)                     279,346
Net realized gains (losses) on investments                  128,430       (356)                                  128,074
                                                        -----------------------------------               --------------
Net Income                                              $   343,212   $113,615     $(49,407)              $      407,420
                                                        ===================================               ==============

Basic Earnings per share, excluding realized gains      $      1.26                                       $         1.64
                                                        ===========                                       ==============
Basic earnings per share                                $      2.02                                       $         2.40
                                                        ===========                                       ==============
Weighted average shares outstanding - Basic             169,820,631                                          169,820,631
                                                        ===========                                       ==============
Diluted Earnings per share, excluding realized gains    $      1.25                                       $         1.62
                                                        ===========                                       ==============
Diluted earnings per share                              $      1.99                                       $         2.36
                                                        ===========                                       ==============
Weighted average shares outstanding - Diluted           172,481,013                                          172,481,013
                                                        ===========                                       ==============	

(1) The CAT consolidated statement of operations has been compiled to reflect its results of operations for the twelve months ended September 30, 1997.
(2) To eliminate the estimated investment income on the cash portion of the purchase cost funded by ACE (based on a yield of 5.8% which approximates the yield on the ACE portfolio for the fiscal year ended September 30, 1997).
(3) Amortization of goodwill for the period
(4) Interest on the $385 million short-term bank borrowing which has been
calculated at a rate of approximately 6%.

EXHIBIT 99.3
ACE Limited Completes Acquisition of CAT Limited
HAMILTON, Bermuda--(BUSINESS WIRE)--April 1, 1998--ACE Limited (NYSE:ACL) announced today that it has completed the acquisition of CAT Limited. The total consideration paid in the transaction was approximately $711 million in cash, subject to certain post-closing adjustments. As previously disclosed, CAT Limited will be integrated with ACE's existing property catastrophe subsidiary, Tempest Reinsurance Company Limited. The combined property catastrophe reinsurers will operate under the Tempest Re name.
Brian Duperreault, chairman, president and chief executive officer of ACE Limited stated, "We are very pleased to have been able to close this transaction quickly and look forward to the new opportunities this acquisition brings to ACE."
The ACE group of companies provides insurance and reinsurance for a diverse group of international clients. Operating subsidiaries are based in Bermuda, the United States, the United Kingdom (Lloyd's), and the Republic of Ireland. At December 31, 1997, ACE had $2.6 billion in shareholders' equity and approximately $5.0 billion in assets.
CONTACT: ACE Limited
Investor Contact:
Helen M. Wilson, 441/299-9283
or
Media Contact:
Wendy Davis Johnson, 441/299-9347