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) – April 22, 2013

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

 
					
Switzerland	 	1-11778	 	98-0091805	
(State or other jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	
Baerengasse 32
CH-8001 Zurich, Switzerland
Telephone: +41 (0)43 456 76 00
(Address of principal executive offices)
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-(b))	
 
 	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02. Results of Operations and Financial Condition
On April 22, 2013, ACE Limited issued a Press Release reporting its first quarter 2013 results and the availability of its first quarter 2013 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
(d) Exhibits

Exhibit
Number	  	Description	
		
99.1	  	Press Release, Dated April 22, 2013, Reporting First Quarter 2013 Results	
		
99.2	  	First Quarter 2013 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/ Philip V. Bancroft	
	 	Philip V. Bancroft	
	 	Chief Financial Officer	
DATE: April 22, 2013

EXHIBIT INDEX

Number	    	Description	  	Method of Filing	
			
99.1	    	Press Release, Dated April 22, 2013, Reporting First Quarter 2013 Results	  	Furnished herewith	
			
99.2	    	First Quarter 2013 Financial Supplement	  	Furnished herewith	

Exhibit 99.1

	  		  		 		
	  	ACE Limited
Bärengasse 32
CH-8001 Zurich
Switzerland	  	+41 (0)43 456 76 00 main
+41 (0)43 456 76 01 fax
www.acegroup.com	 		

	  		  	Investor Contact:  	  	Helen M. Wilson
(441) 299-9283
helen.wilson@acegroup.com	
				
	  		  	Media Contact:	  	Stephen M. Wasdick
(212) 827-4444
stephen.wasdick@acegroup.com      	
 
ACE REPORTS FIRST QUARTER NET INCOME OF $953 MILLION,
OPERATING INCOME OF $746 MILLION AND P&C COMBINED RATIO OF 88.2%;
OPERATING RETURN ON EQUITY IS 11.9%
 
 	•	 	Operating income of $2.17 per share, up 6%	
 
 	•	 	Book value up 1.5% and tangible book value up 2.1%	
 
 	•	 	Total net premiums written up 6.3%; P&C net premiums written up 6.9%	
 
 	•	 	P&C current accident year underwriting income, excluding catastrophe losses, up 36.9%	
 
 	•	 	North American business now presented in two reporting segments:	
Insurance - North American P&C and Insurance - North American Agriculture
 
 	•	 	Full-year 2013 guidance increased to $7.10 to $7.50 per share in after-tax operating income	
ZURICH -- April 22, 2013 -- ACE Limited (NYSE: ACE) today reported net income for the quarter ended March 31, 2013, of $2.77 per share, compared with $2.84 per share for the same quarter last year. (1) Operating income was $2.17 per share, compared with $2.05 per share for the same quarter last year. (2) Book value and tangible book value per share increased 1.6% and 2.2%, respectively, from December 31, 2012. Book value and tangible book value per share now stand at $82.17 and $67.74, respectively. Operating return on equity for the quarter was 11.9%. (2) The property and casualty (P&C) combined ratio for the quarter was 88.2%.
First Quarter Summary
(in millions, except per share amounts)
(Unaudited)

 	  	 	 	  	 	 	  	 	 	  	(Per Share - Diluted)	 	
 	  	  2013  	 	  	  2012  	 	  	  Change  	 	  	  2013  	 	  	  2012  	 	  	  Change  	 	
	  	 	 	 	  	 	 	 	
Net income	  	$	  953	  	  	$	  973	  	  	 	(2)%	  	  	$	  2.77	  	  	$	  2.84	  	  	 	(3)%	  	
Net realized gains (losses), net of tax	  	 	207	  	  	 	272	  	  	 	(24)%	  	  	 	0.60	  	  	 	0.79	  	  	 	(24)%	  	
	  	 	 	 	  	 	 	 	
Operating income, net of tax (2)	  	$	  746	  	  	$	  701	  	  	 	7% 	  	  	$	  2.17	  	  	$	  2.05	  	  	 	6% 	  	

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had an excellent first quarter and strong start to the year. We produced $746 million in after-tax operating income and our operating ROE was 12%, driven by strong underwriting results. We had a P&C combined ratio of 88.2% that benefited from excellent current accident year underwriting income as a result of both improved margin and growth in our U.S. and international businesses.
“Premium revenue growth across the company was very good, with total net premiums up over 6%. We are taking full advantage of the improved commercial P&C pricing environment in the U.S. and our strong presence in areas of the world where economic fundamentals are superior, such as Asia and Latin America. We completed our acquisition of Mexican surety company Fianzas Monterrey and anticipate closing our acquisition of ABA Seguros, Mexico’s fourth-largest personal lines company, over the next few weeks. We are optimistic about our growth prospects for the balance of the year.”
Operating highlights for the quarter ended March 31, 2013, were as follows: (1)
 
 	•	 	Total company net premiums written increased 6.3%.	
 	•	 	P&C net premiums written increased 6.9%.	
 	•	 	Total pre-tax and after-tax catastrophe losses including reinstatement premiums for the quarter were $32 million (one percentage point of the combined ratio) and $28 million, respectively, compared with $19 million and $14 million, respectively, in 2012.	
 	•	 	P&C underwriting income was $364 million compared with $314 million in 2012.	
 	•	 	The P&C combined ratio was 88.2% compared with 89.2% last year.	
 	•	 	P&C current accident year underwriting income excluding catastrophe losses increased 36.9% to $328 million. Results included a net favorable benefit of $14 million, which comprised two one-time items: a $29 million legal settlement benefit partially offset by a $15 million expense adjustment.	
 	•	 	Favorable prior period development pre-tax was $70 million, representing 2.2 percentage points of the combined ratio, compared with $93 million last year.	
 	•	 	The P&C current accident year combined ratio excluding catastrophe losses improved to 89.4% compared with 91.7% last year.	
 	•	 	The P&C expense ratio for the quarter improved to 31.1% compared with 32.3% last year, and benefited by 0.6 percentage point related to the one-time items noted above.	
 	•	 	Operating cash flow was $913 million for the quarter.	
 	•	 	Net loss reserves decreased $60 million in the quarter after adjusting for foreign exchange due to payments related to Superstorm Sandy and prior year crop insurance losses.	
 	•	 	Net investment income for the quarter decreased 2.4% to $531 million due primarily to lower reinvestment rates offset by higher distributions from private equity funds.	
 	•	 	Net realized and unrealized gains pre-tax totaled approximately $88 million, which included net realized gains from derivative accounting related to variable annuity reinsurance of $119 million, including the effect of foreign exchange.	
 	•	 	Operating return on equity was 11.9% for the quarter. (2) Return on equity computed using net income was 13.7%.	
 	•	 	Share repurchases totaled $154 million, or approximately 1.8 million shares, during the quarter.	
 	•	 	Book value per share (2) increased 1.6% to $82.17 from $80.90 at December 31, 2012.	
 	•	 	Tangible book value per share (2) increased 2.2% to $67.74 from $66.28 at December 31, 2012.	
 	•	 	Debt plus trust preferred securities to tangible capital ratio was 20.7% compared to 18.4% at December 31, 2012, primarily due to new debt issuances totaling $950 million during the quarter.	
 	•	 	Effective with the first quarter of 2013, the company’s North American segment is split and presented in two distinct reporting segments: Insurance - North American P&C and Insurance - North American Agriculture. Prior year amounts have been adjusted to conform to the new segment presentation.	
 
Page 2/8

Details of financial results by business segment are available in the ACE Limited Financial Supplement. Key segment items for the quarter ended March 31, 2013, include:
 
 	•	 	Insurance - North American P&C: Net premiums written increased 9.3%. The combined ratio was 85.7% compared with 89.4%.	
 	•	 	Insurance - North American Agriculture: Net premiums written decreased 5.1%, or $6 million. The combined ratio was 79.3% compared with 42.8%.	
 	•	 	Insurance - Overseas General: Net premiums written increased 6.0%. On a constant-dollar basis, net premiums written increased 6.3%. The combined ratio was 90.6% compared with 91.2%.	
 	•	 	Global Reinsurance: Net premiums written increased 6.1%. The combined ratio was 67.3% compared with 68.3%.	
 	•	 	Life: Operating income was $70 million compared with $84 million. On a constant-dollar basis, Life net premiums written and deposits collected, excluding life reinsurance run-off products, (2) increased 17.8%.	
The company is issuing updated guidance for full-year 2013 to account for the positive first quarter prior period reserve development, lower-than-planned catastrophe losses realized in the first quarter and better-than-expected current accident year results excluding catastrophe losses. The range is $7.10 to $7.50 per share in after-tax operating income for the year. This includes estimated catastrophe losses of $330 million after tax for the second through fourth quarters. Guidance for the balance of the year is for the current accident year only.
Please refer to the ACE Limited Financial Supplement , dated March 31, 2013, which is posted on the company’s website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure.
ACE will host its first quarter earnings conference call and webcast on Tuesday, April 23, 2013, beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live and archived webcast at www.acegroup.com or by dialing 888-299-7205 (within the United States) or 719-457-1517 (international); passcode 3476384. Please refer to the ACE Group website in the Investor Information section under Calendar of Events for details. A replay of the call will be available until Tuesday, May 7, 2013, and the archived webcast will be available for approximately one month. To listen to the replay, please dial 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 3476384.
The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at: www.acegroup.com .
 
Page 3/8

(1)  All comparisons are with the same period last year unless specifically stated.
(2)  Non-GAAP Financial Measures:
Operating income or income excluding net realized gains (losses), net of tax is a common performance measurement for insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially-owned entities because the amount of these gains (losses) 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, policy benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest and income tax expense and net realized gains (losses). Life underwriting income includes net investment income and gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under generally accepted accounting principles (GAAP). P&C underwriting income and consolidated underwriting income are non-GAAP financial measures. We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses) is an annualized non-GAAP financial measure. The ROE numerator includes income adjusted to exclude net realized gains (losses), net of tax. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate, multiply by four. Annualized ROE calculated using income excluding realized gains (losses) is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.
Life net premiums written and deposits collected, excluding life reinsurance run-off products , is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (life deposits) are properly not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our Life business because new life deposits are an important component of production and key to our efforts to grow our business. However, we exclude results associated with our life reinsurance run-off products as there is no new life reinsurance business currently being written.
Book value per common share is shareholders’ equity divided by the shares outstanding.
Tangible book value per common share is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.
See reconciliation of Non-GAAP Financial Measures on pages 23-24 in the Financial Supplement. These measures should not be viewed as a substitute for net income, return on equity, or effective tax rate determined in accordance with GAAP.
NM - not meaningful comparison
 
Page 4/8

Cautionary Statement Regarding Forward-Looking Statements :
Forward-looking statements made in this press release, such as those related to company performance and guidance, acquisition activity, economic outlook and insurance market conditions, reflect our 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 that could cause actual results to differ materially, including without limitation, the following: competition, pricing and policy term trends, the levels of new and renewal business achieved, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and performance of acquired companies, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war, and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in our 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. We undertake 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 5/8

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

 	  	 	 	 	 	 	 	 	
 	  	    March 31    
2013	 	 	  December 31  
2012	 	
  Assets	  				 				
  Investments	  	$	61,359  	  	 	$	60,264  	  	
  Cash	  	 	855  	  	 	 	615  	  	
  Insurance and reinsurance balances receivable	  	 	4,154  	  	 	 	4,147  	  	
  Reinsurance recoverable on losses and loss expenses	  	 	11,530  	  	 	 	12,078  	  	
  Other assets	  	 	15,563  	  	 	 	15,441  	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	93,461  	  	 	$	92,545  	  	
	  	 	 	 	 	 	 	 	
   Liabilities	  				 				
  Unpaid losses and loss expenses	  	$	37,082  	  	 	$	37,946  	  	
  Unearned premiums	  	 	7,019  	  	 	 	6,864  	  	
  Other liabilities	  	 	21,418  	  	 	 	20,204  	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	65,519  	  	 	 	65,014  	  	
	  	 	 	 	 	 	 	 	
   Shareholders’ equity	  				 				
Total shareholders’ equity	  	 	27,942  	  	 	 	27,531  	  	
	  	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	93,461  	  	 	$	92,545  	  	
	  	 	 	 	 	 	 	 	
   Book value per common share (2)	  	$	82.17  	  	 	$	80.90  	  	

Page 6/8

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

 	  	 	 	 	 	 	 	 	
		
 	  	    Three Months Ended    
March 31	 	
 	  	2013	 	 	2012	 	
Gross premiums written	  	$	4,963     	  	 	$	4,787     	  	
Net premiums written	  	 	3,798     	  	 	 	3,572     	  	
Net premiums earned	  	 	3,573     	  	 	 	3,381     	  	
Losses and loss expenses	  	 	1,926     	  	 	 	1,804     	  	
Policy benefits	  	 	131     	  	 	 	147     	  	
Policy acquisition costs	  	 	614     	  	 	 	582     	  	
Administrative expenses	  	 	514     	  	 	 	510     	  	
	  	 	 	 	 	 	 	 	
Underwriting income (2)	  	 	388     	  	 	 	338     	  	
Net investment income	  	 	531     	  	 	 	544     	  	
Net realized gains (losses)	  	 	206     	  	 	 	260     	  	
Interest expense	  	 	60     	  	 	 	62     	  	
Other income (expense):	  				 				
Gains (losses) from separate account assets (2)	  	 	4     	  	 	 	18     	  	
Other	  	 	6     	  	 	 	(15)    	  	
Income tax expense	  	 	122     	  	 	 	110     	  	
	  	 	 	 	 	 	 	 	
Net income	  	$	953     	  	 	$	973     	  	
	  	 	 	 	 	 	 	 	
Diluted earnings per share:	  				 				
Operating income (2)	  	$	2.17     	  	 	$	2.05     	  	
Net income	  	$	2.77     	  	 	$	2.84     	  	
Weighted average diluted shares outstanding	  	 	343.9     	  	 	 	341.7     	  	
Loss and loss expense ratio	  	 	57.1%  	  	 	 	56.9%  	  	
Policy acquisition cost ratio	  	 	17.2%  	  	 	 	17.4%  	  	
Administrative expense ratio	  	 	13.9%  	  	 	 	14.9%  	  	
	  	 	 	 	 	 	 	 	
Combined ratio	  	 	88.2%  	  	 	 	89.2%  	  	

 
Page 7/8

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

 	  	 	 	 	 	 	 	 	
 	  	 Three Months Ended 
March 31	 	
 	  	2013	 	 	2012	 	
  Gross Premiums Written	  				 				
 Insurance - North American P&C	  	$	1,819   	  	 	$	1,829   	  	
 Insurance - North American Agriculture	  	 	249   	  	 	 	183   	  	
 Insurance - Overseas General	  	 	2,073   	  	 	 	1,984   	  	
 Global Reinsurance	  	 	294   	  	 	 	279   	  	
 Life	  	 	528   	  	 	 	512   	  	
	  	 	 	 	 	 	 	 	
 Total	  	$	4,963   	  	 	$	4,787   	  	
	  	 	 	 	 	 	 	 	
  Net Premiums Written	  				 				
 Insurance - North American P&C	  	$	1,284   	  	 	$	1,174   	  	
 Insurance - North American Agriculture	  	 	113   	  	 	 	119   	  	
 Insurance - Overseas General	  	 	1,620   	  	 	 	1,528   	  	
 Global Reinsurance	  	 	279   	  	 	 	263   	  	
 Life	  	 	502   	  	 	 	488   	  	
	  	 	 	 	 	 	 	 	
  Total	  	$	3,798   	  	 	$	3,572   	  	
	  	 	 	 	 	 	 	 	
  Net Premiums Earned	  				 				
 Insurance - North American P&C	  	$	1,338   	  	 	$	1,228   	  	
 Insurance - North American Agriculture	  	 	52   	  	 	 	59   	  	
 Insurance - Overseas General	  	 	1,459   	  	 	 	1,391   	  	
 Global Reinsurance	  	 	247   	  	 	 	230   	  	
 Life	  	 	477   	  	 	 	473   	  	
	  	 	 	 	 	 	 	 	
  Total	  	$	3,573   	  	 	$	3,381   	  	
	  	 	 	 	 	 	 	 	
  Operating Income (2)	  				 				
 Insurance - North American P&C	  	$	361   	  	 	$	309   	  	
 Insurance - North American Agriculture	  	 	7   	  	 	 	25   	  	
 Insurance - Overseas General	  	 	239   	  	 	 	214   	  	
 Global Reinsurance	  	 	144   	  	 	 	137   	  	
 Life	  	 	70   	  	 	 	84   	  	
 Corporate	  	 	(75)  	  	 	 	(68)  	  	
	  	 	 	 	 	 	 	 	
  Total	  	$	746   	  	 	$	701   	  	

 
Page 8/8

Table of Contents
Exhibit 99.2

 

			
Investor Contact
 
Helen M. Wilson
Phone: (441) 299-9283
Fax: (441) 292-8675
email: investorrelations@acegroup.com	  	This report is for informational purposes only. It should be read in conjunction 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 ACE’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, our 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, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable and credit developments among reinsurers.	
		
	  	Our forward-looking statements could also be affected by competition, pricing and policy term trends, 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. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.	

Table of Contents

	 	ACE Limited
 Financial Supplement Table of Contents	 		

 	  	Page	 	
I. Financial Highlights	  				
- Consolidated Financial Highlights	  	 	1	  	
		
II. Consolidated Results	  				
- Consolidated Results—Consecutive Quarters	  	 	2	  	
- Summary Consolidated Balance Sheets	  	 	3	  	
- Consolidated Premiums and Operating Income by Line of Business	  	 	4 - 5	  	
		
III. Segment Results	  				
- Insurance—North American—For Reference Only	  	 	6	  	
- Insurance—North American P&C	  	 	7	  	
- Insurance—North American Agriculture	  	 	8	  	
- Insurance—Overseas General	  	 	9	  	
- Global Reinsurance	  	 	10	  	
- Life	  	 	11	  	
		
IV. Balance Sheet Details	  				
- Loss Reserve Rollforward	  	 	12	  	
- Reinsurance Recoverable Analysis	  	 	13	  	
- Investment Portfolio	  	 	14 - 19	  	
- Net Realized and Unrealized Gains (Losses)	  	 	20	  	
- Capital Structure	  	 	21	  	
- Computation of Basic and Diluted Earnings Per Share	  	 	22	  	
		
V. Other Disclosures	  				
- Non-GAAP Financial Measures	  	 	23 - 24	  	
- Book Value and Book Value per Common Share	  	 	25	  	
- Glossary	  	 	26	  	

Table of Contents

	 	ACE Limited
 Consolidated Financial Highlights
(in millions of U.S. dollars, except share, per share data, and  ratios)
(Unaudited)	 		
Note: All dollar amounts in the Financial Supplement are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.

 	  	 	 	 	 	 	 	 	 	 	 	 	 	Constant $	 	
 	  	 	 	 	% Change	 	 	 	 	 	% Change	 	
 	  	Three months ended March 31	 	 	1Q-13 vs.	 	 	Constant $	 	 	1Q-13 vs.	 	
 	  	2013	 	 	2012	 	 	1Q-12	 	 	2012 (2)	 	 	1Q-12 (2)	 	
Gross premiums written	  	$	4,963	  	 	$	4,787	  	 	 	3.7	% 	 	$	4,789	  	 	 	3.6	% 	
Net premiums written	  	$	3,798	  	 	$	3,572	  	 	 	6.3	% 	 	$	3,573	  	 	 	6.3	% 	
Net premiums earned	  	$	3,573	  	 	$	3,381	  	 	 	5.7	% 	 	$	3,374	  	 	 	5.9	% 	
Net investment income	  	$	531	  	 	$	544	  	 	 	-2.4	% 	 				 				
Net income	  	$	953	  	 	$	973	  	 	 	-2.0	% 	 				 				
Operating income (1)	  	$	746	  	 	$	701	  	 	 	6.5	% 	 				 				
Comprehensive income	  	$	716	  	 	$	1,271	  	 	 	-43.7	% 	 				 				
Operating cash flow	  	$	913	  	 	$	572	  	 				 				 				
P&C combined ratio	  				 				 				 				 				
Loss and loss expense ratio	  	 	57.1 	%  	 	 	56.9 	%  	 				 				 				
Underwriting and administrative expense ratio	  	 	31.1	% 	 	 	32.3	% 	 				 				 				
	  	 	 	 	 	 	 	 	 				 				 				
Combined ratio	  	 	88.2	% 	 	 	89.2	% 	 				 				 				
Operating return on equity (ROE) (1)	  	 	11.9	% 	 	 	12.2	% 	 				 				 				
ROE	  	 	13.7	% 	 	 	15.6	% 	 				 				 				
Operating effective tax rate (1)	  	 	10.8	% 	 	 	13.0	% 	 				 				 				
Effective tax rate	  	 	11.3	% 	 	 	10.2	% 	 				 				 				
Diluted earnings per share	  				 				 				 				 				
Operating income (1)	  	$	2.17	  	 	$	2.05	  	 	 	5.9	% 	 				 				
Net income	  	$	2.77	  	 	$	2.84	  	 	 	-2.5	% 	 				 				
						
 	  	 	 	 	 	 	 	 	 	 	December 31
2012	 	 	% Change
1Q-13 vs.
4Q-12	 	
Book value per common share (1)	  	$	82.17	  	 	$	75.09	  	 	 	9.4	% 	 	$	80.90	  	 	 	1.6	% 	
Tangible book value per common share (1)	  	$	67.74	  	 	$	60.74	  	 	 	11.5	% 	 	$	66.28	  	 	 	2.2	% 	
Weighted average basic common shares outstanding	  	 	340.8	  	 	 	338.6	  	 				 				 				
Weighted average diluted common shares outstanding	  	 	343.9	  	 	 	341.7	  	 				 				 				
Debt plus trust preferred securities/ tangible capital	  	 	20.7	% 	 	 	20.2	% 	 				 	 	18.4	% 	 				
 
(1)	See Non-GAAP Financial Measures.	
(2)	Prior periods on a constant dollar basis.	

			
Financial Highlights	  	Page 1	

Table of Contents

	 	ACE Limited
 Consolidated Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
ACE Limited Consolidated

   	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Consolidated Results Excluding Life Segment	  				 				 				 				 				 				
Gross premiums written	  	$	4,435	  	 	$	4,602	  	 	$	5,496	  	 	$	5,140	  	 	$	4,275	  	 	$	19,513	  	
Net premiums written	  	 	3,296	  	 	 	3,140	  	 	 	4,228	  	 	 	3,644	  	 	 	3,084	  	 	 	14,096	  	
Net premiums earned	  	 	3,096	  	 	 	3,359	  	 	 	4,185	  	 	 	3,309	  	 	 	2,908	  	 	 	13,761	  	
Losses and loss expenses	  	 	1,769	  	 	 	2,535	  	 	 	2,883	  	 	 	1,968	  	 	 	1,656	  	 	 	9,042	  	
Policy acquisition costs	  	 	534	  	 	 	546	  	 	 	529	  	 	 	531	  	 	 	506	  	 	 	2,112	  	
Administrative expenses	  	 	429	  	 	 	462	  	 	 	438	  	 	 	436	  	 	 	432	  	 	 	1,768	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss) (1)	  	 	364	  	 	 	(184	) 	 	 	335	  	 	 	374	  	 	 	314	  	 	 	839	  	
Net investment income	  	 	468	  	 	 	502	  	 	 	470	  	 	 	475	  	 	 	483	  	 	 	1,930	  	
Net realized gains (losses)	  	 	79	  	 	 	83	  	 	 	11	  	 	 	27	  	 	 	29	  	 	 	150	  	
Interest expense	  	 	56	  	 	 	60	  	 	 	60	  	 	 	59	  	 	 	59	  	 	 	238	  	
Other income (expense)	  	 	6	  	 	 	20	  	 	 	3	  	 	 	(15	) 	 	 	(6	) 	 	 	2	  	
Income tax expense (benefit)	  	 	109	  	 	 	(149	) 	 	 	133	  	 	 	129	  	 	 	99	  	 	 	212	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	752	  	 	 	510	  	 	 	626	  	 	 	673	  	 	 	662	  	 	 	2,471	  	
Net realized gains (losses)	  	 	79	  	 	 	83	  	 	 	11	  	 	 	27	  	 	 	29	  	 	 	150	  	
Net realized gains (losses) in other income (expense) (1) (2)	  	 	28	  	 	 	30	  	 	 	23	  	 	 	(1	) 	 	 	23	  	 	 	75	  	
Tax expense on net realized gains (losses)	  	 	31	  	 	 	21	  	 	 	9	  	 	 	17	  	 	 	7	  	 	 	54	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (1)	  	 	676	  	 	 	418	  	 	 	601	  	 	 	664	  	 	 	617	  	 	 	2,300	  	
Life segment operating income (1)	  	 	70	  	 	 	74	  	 	 	87	  	 	 	79	  	 	 	84	  	 	 	324	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated operating income (1)	  	$	746	  	 	$	492	  	 	$	688	  	 	$	743	  	 	$	701	  	 	$	2,624	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period (3) 	  				 				 				 				 				 				
Net premiums written as reported	  	 	6.9	% 	 	 	0.3	% 	 	 	9.6	% 	 	 	5.3	% 	 	 	2.5	% 	 	 	4.7	% 	
Net premiums earned as reported	  	 	6.4	% 	 	 	-0.1	% 	 	 	4.4	% 	 	 	1.1	% 	 	 	0.8	% 	 	 	1.7	% 	
Net premiums written constant $	  	 	6.9	% 	 				 				 				 				 	 	6.3	% 	
Net premiums earned constant $	  	 	6.7	% 	 				 				 				 				 	 	3.3	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written (3)	  	 	74	% 	 	 	68	% 	 	 	77	% 	 	 	71	% 	 	 	72	% 	 	 	72	% 	
Operating effective tax rate (1)	  	 	10.8	% 	 	 	-46.8	% 	 	 	16.7	% 	 	 	14.6	% 	 	 	13.0	% 	 	 	7.5	% 	
P&C combined ratio (3) 	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	57.1	% 	 	 	75.5	% 	 	 	68.9	% 	 	 	59.5	% 	 	 	56.9	% 	 	 	65.7	% 	
Policy acquisition cost ratio	  	 	17.2	% 	 	 	16.2	% 	 	 	12.7	% 	 	 	16.1	% 	 	 	17.4	% 	 	 	15.3	% 	
Administrative expense ratio	  	 	13.9	% 	 	 	13.8	% 	 	 	10.4	% 	 	 	13.1	% 	 	 	14.9	% 	 	 	12.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	88.2	% 	 	 	105.5	% 	 	 	92.0	% 	 	 	88.7	% 	 	 	89.2	% 	 	 	93.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding catastrophe losses and PPD (1)	  	 	89.4	% 	 	 	91.4	% 	 	 	96.5	% 	 	 	90.4	% 	 	 	91.7	% 	 	 	92.8	% 	
P&C expense ratio	  	 	31.1	% 	 	 	30.0	% 	 	 	23.1	% 	 	 	29.2	% 	 	 	32.3	% 	 	 	28.2	% 	
P&C expense ratio excluding A&H	  	 	27.4	% 	 	 	26.2	% 	 	 	19.3	% 	 	 	25.3	% 	 	 	28.4	% 	 	 	24.3	% 	
Large losses and other items (before tax) (3) 	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	(7	) 	 	$	2	  	 	$	—  	  	 	$	—  	  	 	$	(5	) 	
Catastrophe losses	  	$	32	  	 	$	504	  	 	$	55	  	 	$	55	  	 	$	19	  	 	$	633	  	
Favorable prior period development (PPD) (4)	  	$	(70	) 	 	$	(37	) 	 	$	(236	) 	 	$	(113	) 	 	$	(93	) 	 	$	(479	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1)	  	 	58.3	% 	 	 	61.4	% 	 	 	73.4	% 	 	 	61.2	% 	 	 	59.5	% 	 	 	64.6	% 	
 
(1)	See Non-GAAP Financial Measures.	
(2)	Net realized investment gains and losses related to unconsolidated entities.	
(3)	Presented excluding the Life segment. This is a non-GAAP financial measure.	
(4)	Q1 2013 favorable PPD is gross of a $2 million unfavorable profit commission adjustment.	

			
Consolidated Results	  	Page 2	

Table of Contents

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

 	  	March 31
2013	 	 	December 31
2012	 	
Assets	  				 				
Fixed maturities available for sale, at fair value	  	$	47,947	  	 	$	47,306	  	
Fixed maturities held to maturity, at amortized cost	  	 	6,867	  	 	 	7,270	  	
Equity securities, at fair value	  	 	832	  	 	 	744	  	
Short-term investments, at fair value	  	 	2,893	  	 	 	2,228	  	
Other investments	  	 	2,820	  	 	 	2,716	  	
	  	 	 	 	 	 	 	 	
Total investments	  	 	61,359	  	 	 	60,264	  	
Cash	  	 	855	  	 	 	615	  	
Securities lending collateral	  	 	1,786	  	 	 	1,791	  	
Insurance and reinsurance balances receivable	  	 	4,154	  	 	 	4,147	  	
Reinsurance recoverable on losses and loss expenses	  	 	11,530	  	 	 	12,078	  	
Deferred policy acquisition costs	  	 	1,966	  	 	 	1,873	  	
Value of business acquired	  	 	583	  	 	 	614	  	
Prepaid reinsurance premiums	  	 	1,653	  	 	 	1,617	  	
Goodwill and other intangible assets	  	 	4,909	  	 	 	4,975	  	
Deferred tax assets	  	 	505	  	 	 	453	  	
Investments in partially-owned insurance companies	  	 	449	  	 	 	454	  	
Other assets	  	 	3,712	  	 	 	3,664	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	93,461	  	 	$	92,545	  	
	  	 	 	 	 	 	 	 	
Liabilities	  				 				
Unpaid losses and loss expenses	  	$	37,082	  	 	$	37,946	  	
Unearned premiums	  	 	7,019	  	 	 	6,864	  	
Future policy benefits	  	 	4,465	  	 	 	4,470	  	
Insurance and reinsurance balances payable	  	 	3,402	  	 	 	3,472	  	
Securities lending payable	  	 	1,789	  	 	 	1,795	  	
Accounts payable, accrued expenses, and other liabilities	  	 	5,744	  	 	 	5,397	  	
Short-term debt	  	 	1,402	  	 	 	1,401	  	
Long-term debt	  	 	4,307	  	 	 	3,360	  	
Trust preferred securities	  	 	309	  	 	 	309	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	65,519	  	 	 	65,014	  	
Shareholders’ equity	  				 				
Total shareholders’ equity, excl. AOCI	  	 	25,292	  	 	 	24,644	  	
Accumulated other comprehensive income (AOCI)	  	 	2,650	  	 	 	2,887	  	
	  	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	27,942	  	 	 	27,531	  	
	  	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	93,461	  	 	$	92,545	  	
	  	 	 	 	 	 	 	 	
Book value per common share (1) 	  	$	82.17	  	 	$	80.90	  	
% change over prior quarter	  	 	1.6	% 	 	 	1.9	% 	
Tangible book value per common share (1) 	  	$	67.74	  	 	$	66.28	  	
% change over prior quarter	  	 	2.2	% 	 	 	2.5	% 	
 
(1)	See Non-GAAP Financial Measures.	

			
Consol Bal Sheet	  	Page 3	

Table of Contents

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

 	  	1Q-13	 	  	% of
Total
Consolidated	 	 	1Q-12	 	  	% of
Total
Consolidated	 	 	% Change
1Q-13 vs.
1Q-12	 	
Net premiums written	  				  				 				  				 				
Property and all other	  	$	1,222	  	  	 	32	% 	 	$	1,112	  	  	 	31	% 	 	 	9.9	% 	
Agriculture	  	 	113	  	  	 	3	% 	 	 	119	  	  	 	3	% 	 	 	-5.1	% 	
Casualty	  	 	1,308	  	  	 	35	% 	 	 	1,214	  	  	 	34	% 	 	 	7.7	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Subtotal	  	 	2,643	  	  	 	70	% 	 	 	2,445	  	  	 	68	% 	 	 	8.1	% 	
Personal accident (A&H) (1)	  	 	914	  	  	 	24	% 	 	 	882	  	  	 	25	% 	 	 	3.7	% 	
Life	  	 	241	  	  	 	6	% 	 	 	245	  	  	 	7	% 	 	 	-1.6	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Total consolidated	  	$	3,798	  	  	 	100	% 	 	$	3,572	  	  	 	100	% 	 	 	6.3	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Net premiums earned	  				  				 				  				 				
Property and all other	  	$	1,067	  	  	 	30	% 	 	$	970	  	  	 	29	% 	 	 	10.0	% 	
Agriculture	  	 	52	  	  	 	1	% 	 	 	59	  	  	 	2	% 	 	 	-11.1	% 	
Casualty	  	 	1,353	  	  	 	38	% 	 	 	1,270	  	  	 	37	% 	 	 	6.5	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Subtotal	  	 	2,472	  	  	 	69	% 	 	 	2,299	  	  	 	68	% 	 	 	7.5	% 	
Personal accident (A&H) (1)	  	 	874	  	  	 	25	% 	 	 	852	  	  	 	25	% 	 	 	2.6	% 	
Life	  	 	227	  	  	 	6	% 	 	 	230	  	  	 	7	% 	 	 	-1.3	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Total consolidated	  	$	3,573	  	  	 	100	% 	 	$	3,381	  	  	 	100	% 	 	 	5.7	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Operating income (2) 	  				  				 				  				 				
Property, casualty, and all other	  	$	581	  	  	 	78	% 	 	$	517	  	  	 	74	% 	 	 	12.4	% 	
Agriculture	  	 	7	  	  	 	1	% 	 	 	25	  	  	 	3	% 	 	 	-72.4	% 	
Personal accident (A&H) (1)	  	 	124	  	  	 	16	% 	 	 	118	  	  	 	17	% 	 	 	5.4	% 	
Life	  	 	34	  	  	 	5	% 	 	 	41	  	  	 	6	% 	 	 	-17.1	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 				
Total consolidated	  	$	746	  	  	 	100	% 	 	$	701	  	  	 	100	% 	 	 	6.5	% 	

(1)	For purposes of this schedule only, A&H results from our Combined North American and International businesses, normally included in the Life and Insurance-Overseas General segments, respectively, are included in the Personal Accident (A&H) line items above.	
(2)	See Non-GAAP Financial Measures.	

			
Line of Business	  	Page 4	

Table of Contents

	 	ACE Limited
Consolidated Premiums and Operating Income
by Line of Business, Adjusted for Foreign Exchange
(in millions of U.S. dollars)
(Unaudited)	 		
ACE Limited Consolidated Constant Dollar

 	  	1Q-13	 	  	Constant $
1Q-12 (2)	 	  	Constant $
% Change
1Q-13 vs.
1Q-12	 	
Net premiums written	  				  				  				
Property, casualty, agriculture, and all other	  	$	2,643	  	  	$	2,441	  	  	 	8.3	% 	
Personal accident (A&H) (1)	  	 	914	  	  	 	887	  	  	 	3.1	% 	
Life	  	 	241	  	  	 	245	  	  	 	-1.6	% 	
	  	 	 	 	  	 	 	 	  				
Total consolidated	  	$	3,798	  	  	$	3,573	  	  	 	6.3	% 	
	  	 	 	 	  	 	 	 	  				
Net premiums earned	  				  				  				
Property, casualty, agriculture, and all other	  	$	2,472	  	  	$	2,288	  	  	 	8.0	% 	
Personal accident (A&H) (1)	  	 	874	  	  	 	855	  	  	 	2.2	% 	
Life	  	 	227	  	  	 	231	  	  	 	-1.7	% 	
	  	 	 	 	  	 	 	 	  				
Total consolidated	  	$	3,573	  	  	$	3,374	  	  	 	5.9	% 	
	  	 	 	 	  	 	 	 	  				
Operating income (3) 	  				  				  				
Property, casualty, agriculture, and all other	  	$	588	  	  	$	542	  	  	 	8.5	% 	
Personal accident (A&H) (1)	  	 	124	  	  	 	119	  	  	 	4.4	% 	
Life	  	 	34	  	  	 	42	  	  	 	-19.0	% 	
	  	 	 	 	  	 	 	 	  				
Total consolidated	  	$	746	  	  	$	703	  	  	 	6.1	% 	

(1)	For purposes of this schedule only, A&H results from our Combined North American and International businesses, normally included in the Life and Insurance-Overseas General segments, respectively, are included in the Personal Accident (A&H) line items above.	
(2)	Prior periods on a constant dollar basis.	
(3)	See Non-GAAP Financial Measures.	

			
Line of Business 2	  	Page 5	

Table of Contents

	 	ACE Limited
Insurance—North American
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
Effective Q1 2013, the company’s Insurance—North American business is presented in two distinct reporting segments: Insurance—North American P&C (refer to page 7) and Insurance—North American Agriculture (refer to page 8). The below table shows the previous Insurance—North American business presentation and should be used for reference purposes only.
 Insurance—North American

 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Gross premiums written	  	$	2,068	  	 	$	2,528	  	 	$	3,345	  	 	$	2,856	  	 	$	2,012	  	 	$	10,741	  	
Net premiums written	  	 	1,397	  	 	 	1,518	  	 	 	2,537	  	 	 	1,860	  	 	 	1,293	  	 	 	7,208	  	
Net premiums earned	  	 	1,390	  	 	 	1,608	  	 	 	2,472	  	 	 	1,652	  	 	 	1,287	  	 	 	7,019	  	
Losses and loss expenses	  	 	910	  	 	 	1,504	  	 	 	2,110	  	 	 	1,163	  	 	 	849	  	 	 	5,626	  	
Policy acquisition costs	  	 	147	  	 	 	142	  	 	 	160	  	 	 	157	  	 	 	127	  	 	 	586	  	
Administrative expenses	  	 	130	  	 	 	153	  	 	 	148	  	 	 	153	  	 	 	147	  	 	 	601	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	203	  	 	 	(191	) 	 	 	54	  	 	 	179	  	 	 	164	  	 	 	206	  	
Net investment income	  	 	257	  	 	 	283	  	 	 	263	  	 	 	271	  	 	 	274	  	 	 	1,091	  	
Net realized gains (losses)	  	 	26	  	 	 	26	  	 	 	(1	) 	 	 	18	  	 	 	(1	) 	 	 	42	  	
Interest expense	  	 	(2	) 	 	 	3	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	12	  	
Other income (expense)	  	 	7	  	 	 	13	  	 	 	5	  	 	 	(10	) 	 	 	1	  	 	 	9	  	
Income tax expense (benefit)	  	 	96	  	 	 	(79	) 	 	 	81	  	 	 	107	  	 	 	91	  	 	 	200	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	399	  	 	 	207	  	 	 	237	  	 	 	348	  	 	 	344	  	 	 	1,136	  	
Net realized gains (losses)	  	 	26	  	 	 	26	  	 	 	(1	) 	 	 	18	  	 	 	(1	) 	 	 	42	  	
Net realized gains (losses) in other income (expense) (1)	  	 	14	  	 	 	21	  	 	 	17	  	 	 	5	  	 	 	15	  	 	 	58	  	
Tax expense on net realized gains (losses)	  	 	9	  	 	 	10	  	 	 	2	  	 	 	10	  	 	 	4	  	 	 	26	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (1)	  	$	368	  	 	$	170	  	 	$	223	  	 	$	335	  	 	$	334	  	 	$	1,062	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	65.5	% 	 	 	93.6	% 	 	 	85.3	% 	 	 	70.4	% 	 	 	66.0	% 	 	 	80.2	% 	
Policy acquisition cost ratio	  	 	10.5	% 	 	 	8.8	% 	 	 	6.5	% 	 	 	9.5	% 	 	 	9.9	% 	 	 	8.3	% 	
Administrative expense ratio	  	 	9.4	% 	 	 	9.5	% 	 	 	6.0	% 	 	 	9.3	% 	 	 	11.4	% 	 	 	8.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	85.4	% 	 	 	111.9	% 	 	 	97.8	% 	 	 	89.2	% 	 	 	87.3	% 	 	 	97.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding catastrophe losses & PPD (1)	  	 	87.6	% 	 	 	90.0	% 	 	 	99.5	% 	 				 				 	 	93.4	% 	
Large losses and other items (before tax)	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	(8	) 	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	(8	) 	
Catastrophe losses	  	$	11	  	 	$	338	  	 	$	38	  	 	$	49	  	 	$	16	  	 	$	441	  	
Unfavorable (favorable) prior period development (PPD)	  	$	(43	) 	 	$	7	  	 	$	(80	) 	 	$	(59	) 	 	$	(60	) 	 	$	(192	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1)	  	 	67.6	% 	 	 	71.8	% 	 	 	87.2	% 	 	 	71.1	% 	 	 	69.3	% 	 	 	76.6	% 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written	  	 	8.0	% 	 	 	-6.5	% 	 	 	14.9	% 	 	 	7.2	% 	 	 	0.6	% 	 	 	5.2	% 	
Net premiums earned	  	 	7.9	% 	 	 	-3.2	% 	 	 	7.5	% 	 	 	3.0	% 	 	 	-4.4	% 	 	 	1.6	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	68	% 	 	 	60	% 	 	 	76	% 	 	 	65	% 	 	 	64	% 	 	 	67	% 	
 
(1)	See Non-GAAP Financial Measures.	

			
Insurance—North American	  	Page 6	

Table of Contents

	 	ACE Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
Insurance—North American P&C (1) 

 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Gross premiums written	  	$	1,819	  	 	$	2,236	  	 	$	1,921	  	 	$	2,134	  	 	$	1,829	  	 	$	8,120	  	
Net premiums written	  	 	1,284	  	 	 	1,434	  	 	 	1,373	  	 	 	1,368	  	 	 	1,174	  	 	 	5,349	  	
Net premiums earned	  	 	1,338	  	 	 	1,345	  	 	 	1,306	  	 	 	1,268	  	 	 	1,228	  	 	 	5,147	  	
Losses and loss expenses	  	 	878	  	 	 	1,241	  	 	 	819	  	 	 	844	  	 	 	811	  	 	 	3,715	  	
Policy acquisition costs	  	 	143	  	 	 	139	  	 	 	147	  	 	 	135	  	 	 	137	  	 	 	558	  	
Administrative expenses	  	 	125	  	 	 	157	  	 	 	148	  	 	 	153	  	 	 	150	  	 	 	608	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	192	  	 	 	(192	) 	 	 	192	  	 	 	136	  	 	 	130	  	 	 	266	  	
Net investment income	  	 	251	  	 	 	277	  	 	 	257	  	 	 	265	  	 	 	267	  	 	 	1,066	  	
Net realized gains (losses)	  	 	26	  	 	 	26	  	 	 	(2	) 	 	 	18	  	 	 	(1	) 	 	 	41	  	
Interest expense	  	 	(2	) 	 	 	3	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	12	  	
Other income (expense)	  	 	15	  	 	 	21	  	 	 	13	  	 	 	(2	) 	 	 	9	  	 	 	41	  	
Income tax expense (benefit)	  	 	94	  	 	 	(79	) 	 	 	129	  	 	 	96	  	 	 	83	  	 	 	229	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	392	  	 	 	208	  	 	 	328	  	 	 	318	  	 	 	319	  	 	 	1,173	  	
Net realized gains (losses)	  	 	26	  	 	 	26	  	 	 	(2	) 	 	 	18	  	 	 	(1	) 	 	 	41	  	
Net realized gains (losses) in other income (expense) (2)	  	 	14	  	 	 	21	  	 	 	17	  	 	 	5	  	 	 	15	  	 	 	58	  	
Tax expense on net realized gains (losses)	  	 	9	  	 	 	10	  	 	 	2	  	 	 	10	  	 	 	4	  	 	 	26	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (2)	  	$	361	  	 	$	171	  	 	$	315	  	 	$	305	  	 	$	309	  	 	$	1,100	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	65.6	% 	 	 	92.2	% 	 	 	62.7	% 	 	 	66.6	% 	 	 	66.0	% 	 	 	72.2	% 	
Policy acquisition cost ratio	  	 	10.7	% 	 	 	10.3	% 	 	 	11.3	% 	 	 	10.6	% 	 	 	11.2	% 	 	 	10.8	% 	
Administrative expense ratio	  	 	9.4	% 	 	 	11.8	% 	 	 	11.3	% 	 	 	12.1	% 	 	 	12.2	% 	 	 	11.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	85.7	% 	 	 	114.3	% 	 	 	85.3	% 	 	 	89.3	% 	 	 	89.4	% 	 	 	94.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding catastrophe losses and PPD (2)	  	 	87.7	% 	 	 	88.4	% 	 	 	88.8	% 	 				 				 	 	89.9	% 	
Large losses and other items (before tax)	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	(8	) 	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	(8	) 	
Catastrophe losses	  	$	11	  	 	$	335	  	 	$	38	  	 	$	45	  	 	$	14	  	 	$	430	  	
Unfavorable (favorable) prior period development (PPD) (3)	  	$	(40	) 	 	$	8	  	 	$	(80	) 	 	$	(57	) 	 	$	(51	) 	 	$	(180	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (2)	  	 	67.6	% 	 	 	66.4	% 	 	 	66.7	% 	 	 	67.6	% 	 	 	69.0	% 	 	 	67.4	% 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written	  	 	9.3	% 	 	 	6.0	% 	 	 	20.3	% 	 	 	10.3	% 	 	 	0.6	% 	 	 	9.2	% 	
Net premiums earned	  	 	8.9	% 	 	 	9.0	% 	 	 	7.1	% 	 	 	1.6	% 	 	 	-4.4	% 	 	 	3.6	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	71	% 	 	 	64	% 	 	 	71	% 	 	 	64	% 	 	 	64	% 	 	 	66	% 	
 
(1)	Effective Q1 2013, the company’s Insurance—North American business is presented in two distinct reporting segments: Insurance—North American P&C and Insurance—North American Agriculture. Prior year amounts have been adjusted to conform to the new segment presentation.	
(2)	See Non-GAAP Financial Measures.	
(3)	Q1 2013 favorable PPD is gross of a $2 million unfavorable profit commission adjustment.	

			
Insurance—North American P&C	  	Page 7	

Table of Contents

	 	ACE Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
Insurance—North American Agriculture (1) 

 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Gross premiums written	  	$	249	  	 	$	292	  	 	$	1,424	  	 	$	722	  	 	$	183	  	 	$	2,621	  	
Net premiums written	  	 	113	  	 	 	84	  	 	 	1,164	  	 	 	492	  	 	 	119	  	 	 	1,859	  	
Net premiums earned	  	 	52	  	 	 	263	  	 	 	1,166	  	 	 	384	  	 	 	59	  	 	 	1,872	  	
Losses and loss expenses	  	 	32	  	 	 	263	  	 	 	1,291	  	 	 	319	  	 	 	38	  	 	 	1,911	  	
Policy acquisition costs	  	 	4	  	 	 	3	  	 	 	13	  	 	 	22	  	 	 	(10	) 	 	 	28	  	
Administrative expenses	  	 	5	  	 	 	(4	) 	 	 	—  	  	 	 	—  	  	 	 	(3	) 	 	 	(7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	11	  	 	 	1	  	 	 	(138	) 	 	 	43	  	 	 	34	  	 	 	(60	) 	
Net investment income	  	 	6	  	 	 	6	  	 	 	6	  	 	 	6	  	 	 	7	  	 	 	25	  	
Net realized gains (losses)	  	 	—  	  	 	 	—  	  	 	 	1	  	 	 	—  	  	 	 	—  	  	 	 	1	  	
Interest expense	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Other income (expense)	  	 	(8	) 	 	 	(8	) 	 	 	(8	) 	 	 	(8	) 	 	 	(8	) 	 	 	(32	) 	
Income tax expense (benefit)	  	 	2	  	 	 	—  	  	 	 	(48	) 	 	 	11	  	 	 	8	  	 	 	(29	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	7	  	 	 	(1	) 	 	 	(91	) 	 	 	30	  	 	 	25	  	 	 	(37	) 	
Net realized gains (losses)	  	 	—  	  	 	 	—  	  	 	 	1	  	 	 	—  	  	 	 	—  	  	 	 	1	  	
Net realized gains (losses) in other income (expense) (2)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Tax expense on net realized gains (losses)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (2)	  	$	7	  	 	$	(1	) 	 	$	(92	) 	 	$	30	  	 	$	25	  	 	$	(38	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	61.9	% 	 	 	100.3	% 	 	 	110.7	% 	 	 	83.0	% 	 	 	64.2	% 	 	 	102.1	% 	
Policy acquisition cost ratio	  	 	7.5	% 	 	 	1.2	% 	 	 	1.1	% 	 	 	5.9	% 	 	 	-17.7	% 	 	 	1.5	% 	
Administrative expense ratio	  	 	9.9	% 	 	 	-2.0	% 	 	 	0.0	% 	 	 	-0.2	% 	 	 	-3.7	% 	 	 	-0.4	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	79.3	% 	 	 	99.5	% 	 	 	111.8	% 	 	 	88.7	% 	 	 	42.8	% 	 	 	103.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding PPD & certain items (3)	  	 	85.6	% 	 				 				 				 	 	88.1	% 	 				
Large losses and other items (before tax)	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	—  	  	
Catastrophe losses	  	$	—  	  	 	$	4	  	 	$	1	  	 	$	4	  	 	$	2	  	 	$	11	  	
Favorable prior period development (PPD)	  	$	(3	) 	 	$	(1	) 	 	$	—  	  	 	$	(2	) 	 	$	(9	) 	 	$	(12	) 	
Loss and loss expense ratio excluding catastrophe losses (2)	  	 	67.9	% 	 	 	99.3	% 	 	 	110.6	% 	 	 	82.4	% 	 	 	76.1	% 	 	 	102.2	% 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written	  	 	-5.1	% 	 	 	-69.0	% 	 	 	9.2	% 	 	 	-0.5	% 	 	 	0.9	% 	 	 	-4.7	% 	
Net premiums earned	  	 	-11.1	% 	 	 	-38.6	% 	 	 	7.9	% 	 	 	7.8	% 	 	 	-24.3	% 	 	 	-3.6	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	45	% 	 	 	29	% 	 	 	82	% 	 	 	68	% 	 	 	65	% 	 	 	71	% 	
 
(1)	Effective Q1 2013, the company’s Insurance—North American business is presented in two distinct reporting segments: Insurance—North American P&C and Insurance—North American Agriculture. Prior year amounts have been adjusted to conform to the new segment presentation.	
(2)	See Non-GAAP Financial Measures.	
(3)	Q1 2012 benefited from favorable prior period development, a favorable agent profit share commission adjustment, and higher administrative and operating expense reimbursements related to the 2011 crop year. This is a non-GAAP financial measure.	

			
Insurance—North American Agriculture	  	Page 8	

Table of Contents

	 	ACE Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
 Insurance—Overseas General

 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Gross premiums written	  	$	2,073	  	 	$	1,925	  	 	$	1,841	  	 	$	1,952	  	 	$	1,984	  	 	$	7,702	  	
Net premiums written	  	 	1,620	  	 	 	1,476	  	 	 	1,384	  	 	 	1,475	  	 	 	1,528	  	 	 	5,863	  	
Net premiums earned	  	 	1,459	  	 	 	1,497	  	 	 	1,432	  	 	 	1,420	  	 	 	1,391	  	 	 	5,740	  	
Losses and loss expenses	  	 	747	  	 	 	832	  	 	 	622	  	 	 	703	  	 	 	705	  	 	 	2,862	  	
Policy acquisition costs	  	 	339	  	 	 	357	  	 	 	329	  	 	 	332	  	 	 	335	  	 	 	1,353	  	
Administrative expenses	  	 	236	  	 	 	239	  	 	 	234	  	 	 	233	  	 	 	229	  	 	 	935	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income	  	 	137	  	 	 	69	  	 	 	247	  	 	 	152	  	 	 	122	  	 	 	590	  	
Net investment income	  	 	132	  	 	 	135	  	 	 	127	  	 	 	128	  	 	 	131	  	 	 	521	  	
Net realized gains (losses)	  	 	34	  	 	 	44	  	 	 	13	  	 	 	26	  	 	 	20	  	 	 	103	  	
Interest expense	  	 	1	  	 	 	1	  	 	 	2	  	 	 	1	  	 	 	1	  	 	 	5	  	
Other income (expense)	  	 	1	  	 	 	—  	  	 	 	3	  	 	 	(6	) 	 	 	—  	  	 	 	(3	) 	
Income tax expense (benefit)	  	 	46	  	 	 	(33	) 	 	 	77	  	 	 	51	  	 	 	38	  	 	 	133	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	257	  	 	 	280	  	 	 	311	  	 	 	248	  	 	 	234	  	 	 	1,073	  	
Net realized gains (losses)	  	 	34	  	 	 	44	  	 	 	13	  	 	 	26	  	 	 	20	  	 	 	103	  	
Net realized gains (losses) in other income (expense) (1)	  	 	6	  	 	 	1	  	 	 	2	  	 	 	(3	) 	 	 	3	  	 	 	3	  	
Tax expense on net realized gains (losses)	  	 	22	  	 	 	11	  	 	 	6	  	 	 	7	  	 	 	3	  	 	 	27	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (1)	  	$	239	  	 	$	246	  	 	$	302	  	 	$	232	  	 	$	214	  	 	$	994	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	51.2	% 	 	 	55.5	% 	 	 	43.4	% 	 	 	49.6	% 	 	 	50.7	% 	 	 	49.8	% 	
Policy acquisition cost ratio	  	 	23.2	% 	 	 	23.8	% 	 	 	23.1	% 	 	 	23.4	% 	 	 	24.1	% 	 	 	23.6	% 	
Administrative expense ratio	  	 	16.2	% 	 	 	16.1	% 	 	 	16.2	% 	 	 	16.3	% 	 	 	16.4	% 	 	 	16.3	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	90.6	% 	 	 	95.4	% 	 	 	82.7	% 	 	 	89.3	% 	 	 	91.2	% 	 	 	89.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	(8	) 	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	(8	) 	
Catastrophe losses	  	$	21	  	 	$	65	  	 	$	4	  	 	$	5	  	 	$	2	  	 	$	76	  	
Favorable prior period development (PPD)	  	$	(22	) 	 	$	(30	) 	 	$	(135	) 	 	$	(39	) 	 	$	(22	) 	 	$	(226	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1)	  	 	51.3	% 	 	 	52.9	% 	 	 	52.6	% 	 	 	51.9	% 	 	 	52.1	% 	 	 	52.4	% 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written as reported	  	 	6.0	% 	 	 	7.1	% 	 	 	-1.0	% 	 	 	2.2	% 	 	 	8.4	% 	 	 	4.2	% 	
Net premiums earned as reported	  	 	4.9	% 	 	 	3.2	% 	 	 	-2.6	% 	 	 	0.3	% 	 	 	8.8	% 	 	 	2.2	% 	
Net premiums written constant $	  	 	6.3	% 	 				 				 				 				 	 	7.7	% 	
Net premiums earned constant $	  	 	5.7	% 	 				 				 				 				 	 	6.0	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	78	% 	 	 	77	% 	 	 	75	% 	 	 	76	% 	 	 	77	% 	 	 	76	% 	
 
(1)	See Non-GAAP Financial Measures.	

			
Insurance—Overseas General	  	Page 9	

Table of Contents

	 	ACE Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
 Global Reinsurance

 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	Full Year
2012	 	
Gross premiums written	  	$	294	  	 	$	149	  	 	$	310	  	 	$	332	  	 	$	279	  	 	$	1,070	  	
Net premiums written	  	 	279	  	 	 	146	  	 	 	307	  	 	 	309	  	 	 	263	  	 	 	1,025	  	
Net premiums earned	  	 	247	  	 	 	254	  	 	 	281	  	 	 	237	  	 	 	230	  	 	 	1,002	  	
Losses and loss expenses	  	 	106	  	 	 	198	  	 	 	151	  	 	 	102	  	 	 	102	  	 	 	553	  	
Policy acquisition costs	  	 	48	  	 	 	47	  	 	 	40	  	 	 	42	  	 	 	43	  	 	 	172	  	
Administrative expenses	  	 	12	  	 	 	13	  	 	 	13	  	 	 	13	  	 	 	12	  	 	 	51	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	81	  	 	 	(4	) 	 	 	77	  	 	 	80	  	 	 	73	  	 	 	226	  	
Net investment income	  	 	72	  	 	 	77	  	 	 	72	  	 	 	70	  	 	 	71	  	 	 	290	  	
Net realized gains (losses)	  	 	20	  	 	 	12	  	 	 	(2	) 	 	 	(17	) 	 	 	13	  	 	 	6	  	
Interest expense	  	 	1	  	 	 	1	  	 	 	1	  	 	 	1	  	 	 	1	  	 	 	4	  	
Other income (expense)	  	 	8	  	 	 	8	  	 	 	5	  	 	 	(3	) 	 	 	5	  	 	 	15	  	
Income tax expense (benefit)	  	 	8	  	 	 	(2	) 	 	 	11	  	 	 	—  	  	 	 	6	  	 	 	15	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	172	  	 	 	94	  	 	 	140	  	 	 	129	  	 	 	155	  	 	 	518	  	
Net realized gains (losses)	  	 	20	  	 	 	12	  	 	 	(2	) 	 	 	(17	) 	 	 	13	  	 	 	6	  	
Net realized gains (losses) in other income (expense) (1)	  	 	8	  	 	 	8	  	 	 	4	  	 	 	(3	) 	 	 	5	  	 	 	14	  	
Tax expense (benefit) on net realized gains (losses)	  	 	—  	  	 	 	—  	  	 	 	1	  	 	 	—  	  	 	 	—  	  	 	 	1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (1)	  	$	144	  	 	$	74	  	 	$	139	  	 	$	149	  	 	$	137	  	 	$	499	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				
Loss and loss expense ratio	  	 	43.0	% 	 	 	78.2	% 	 	 	53.9	% 	 	 	42.5	% 	 	 	44.4	% 	 	 	55.2	% 	
Policy acquisition cost ratio	  	 	19.3	% 	 	 	18.3	% 	 	 	14.1	% 	 	 	17.8	% 	 	 	18.7	% 	 	 	17.1	% 	
Administrative expense ratio	  	 	5.0	% 	 	 	5.2	% 	 	 	4.7	% 	 	 	5.8	% 	 	 	5.2	% 	 	 	5.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	67.3	% 	 	 	101.7	% 	 	 	72.7	% 	 	 	66.1	% 	 	 	68.3	% 	 	 	77.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	9	  	 	$	2	  	 	$	—  	  	 	$	—  	  	 	$	11	  	
Catastrophe losses	  	$	—  	  	 	$	101	  	 	$	13	  	 	$	1	  	 	$	1	  	 	$	116	  	
Favorable prior period development (PPD)	  	$	(5	) 	 	$	(14	) 	 	$	(21	) 	 	$	(15	) 	 	$	(11	) 	 	$	(61	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1)	  	 	44.8	% 	 	 	45.6	% 	 	 	57.7	% 	 	 	48.3	% 	 	 	48.7	% 	 	 	50.4	% 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written as reported	  	 	6.1	% 	 	 	12.0	% 	 	 	22.2	% 	 	 	9.4	% 	 	 	-16.5	% 	 	 	4.7	% 	
Net premiums earned as reported	  	 	7.3	% 	 	 	2.3	% 	 	 	16.8	% 	 	 	-6.5	% 	 	 	-11.5	% 	 	 	0.0	% 	
Net premiums written constant $	  	 	4.8	% 	 				 				 				 				 	 	5.3	% 	
Net premiums earned constant $	  	 	7.0	% 	 				 				 				 				 	 	0.4	% 	
Other ratios	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	95	% 	 	 	99	% 	 	 	99	% 	 	 	93	% 	 	 	94	% 	 	 	96	% 	
 
(1)	See Non-GAAP Financial Measures.	

			
Global Reinsurance	  	Page 10	

Table of Contents

	 	ACE Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)	 		
 Life

 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Full Year	 	
 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	2012	 	
Gross premiums written	  	$	528	  	 	$	544	  	 	$	511	  	 	$	513	  	 	$	512	  	 	$	2,080	  	
Net premiums written	  	 	502	  	 	 	517	  	 	 	488	  	 	 	486	  	 	 	488	  	 	 	1,979	  	
Net premiums earned	  	 	477	  	 	 	489	  	 	 	480	  	 	 	474	  	 	 	473	  	 	 	1,916	  	
Losses and loss expenses	  	 	157	  	 	 	148	  	 	 	164	  	 	 	151	  	 	 	148	  	 	 	611	  	
Policy benefits (1)	  	 	131	  	 	 	142	  	 	 	130	  	 	 	102	  	 	 	147	  	 	 	521	  	
(Gains) losses from fair value changes in separate account assets (1)	  	 	(4	) 	 	 	(11	) 	 	 	(14	) 	 	 	14	  	 	 	(18	) 	 	 	(29	) 	
Policy acquisition costs	  	 	80	  	 	 	90	  	 	 	80	  	 	 	88	  	 	 	76	  	 	 	334	  	
Administrative expenses	  	 	85	  	 	 	91	  	 	 	81	  	 	 	78	  	 	 	78	  	 	 	328	  	
Net investment income	  	 	63	  	 	 	65	  	 	 	63	  	 	 	62	  	 	 	61	  	 	 	251	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Life underwriting income (2)	  	 	91	  	 	 	94	  	 	 	102	  	 	 	103	  	 	 	103	  	 	 	402	  	
Net realized gains (losses):	  				 				 				 				 				 				
Mark-to-market on guaranteed living benefits derivative (net of related hedges)	  	 	78	  	 	 	138	  	 	 	(64	) 	 	 	(397	) 	 	 	197	  	 	 	(126	) 	
Foreign exchange gains (losses) and all other	  	 	49	  	 	 	51	  	 	 	(7	) 	 	 	(24	) 	 	 	34	  	 	 	54	  	
Interest expense	  	 	4	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	12	  	
Other income (expense) (1)	  	 	—  	  	 	 	(11	) 	 	 	—  	  	 	 	(5	) 	 	 	(9	) 	 	 	(25	) 	
Income tax expense	  	 	13	  	 	 	14	  	 	 	14	  	 	 	19	  	 	 	11	  	 	 	58	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	201	  	 	 	255	  	 	 	14	  	 	 	(345	) 	 	 	311	  	 	 	235	  	
Net realized gains (losses)	  	 	127	  	 	 	189	  	 	 	(71	) 	 	 	(421	) 	 	 	231	  	 	 	(72	) 	
Net realized gains (losses) in other income (expense) (3)	  	 	5	  	 	 	(7	) 	 	 	(3	) 	 	 	2	  	 	 	(5	) 	 	 	(13	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	1	  	 	 	1	  	 	 	(1	) 	 	 	5	  	 	 	(1	) 	 	 	4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (3)	  	$	70	  	 	$	74	  	 	$	87	  	 	$	79	  	 	$	84	  	 	$	324	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period	  				 				 				 				 				 				
Net premiums written as reported	  	 	3.0	% 	 	 	3.9	% 	 	 	0.0	% 	 	 	-1.2	% 	 	 	11.9	% 	 	 	3.4	% 	
Net premiums earned as reported	  	 	1.1	% 	 	 	4.2	% 	 	 	0.0	% 	 	 	-1.9	% 	 	 	11.3	% 	 	 	3.1	% 	
Net premiums written constant $ (4)	  	 	2.7	% 	 				 				 				 				 	 	4.5	% 	
Net premiums earned constant $	  	 	0.8	% 	 				 				 				 				 	 	4.2	% 	
 
(1)	(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP are reclassified from Other income (expense) for purposes of presenting Life underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits.	
(2)	We assess the performance of our Life business based on Life underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets.	
(3)	See Non-GAAP Financial Measures.	
(4)	Net premiums written and deposits breakdown:	

 	  	 	 	  	Constant $	 	  	Constant $	 	
 	  	1Q-13	 	  	1Q-12	 	  	% Change	 	
Life excluding life reinsurance run-off products (3)(5)	  	$	630	  	  	$	535	  	  	 	17.8	% 	
Life reinsurance run-off products including variable annuity	  	 	74	  	  	 	85	  	  	 	-12.9	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total Life (3)	  	$	704	  	  	$	620	  	  	 	13.5	% 	

(5)	Includes deposits collected on universal life and investment contracts of $202 million for Q1 2013 and $131 million for Q1 2012 on a constant-dollar basis. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues.	

			
Life	  	Page 11	

Table of Contents

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

 	  	Unpaid Losses	 	 	Net Paid to	 	
 	  	Gross	 	 	Ceded	 	 	Net	 	 	Incurred Ratio	 	
Balance at December 31, 2011	  	$	37,477	  	 	$	11,602	  	 	$	25,875	  	 				
Losses and loss expenses incurred	  	 	2,361	  	 	 	557	  	 	 	1,804	  	 				
Losses and loss expenses paid	  	 	(2,876	) 	 	 	(931	) 	 	 	(1,945	) 	 	 	108	% 	
Other (incl. foreign exch. revaluation)	  	 	285	  	 	 	90	  	 	 	195	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at March 31, 2012	  	$	37,247	  	 	$	11,318	  	 	$	25,929	  	 				
Losses and loss expenses incurred	  	 	2,851	  	 	 	732	  	 	 	2,119	  	 				
Losses and loss expenses paid	  	 	(2,916	) 	 	 	(893	) 	 	 	(2,023	) 	 	 	95	% 	
Other (incl. foreign exch. revaluation)	  	 	(332	) 	 	 	(171	) 	 	 	(161	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at June 30, 2012	  	$	36,850	  	 	$	10,986	  	 	$	25,864	  	 				
Losses and loss expenses incurred	  	 	4,073	  	 	 	1,026	  	 	 	3,047	  	 				
Losses and loss expenses paid	  	 	(3,078	) 	 	 	(1,013	) 	 	 	(2,065	) 	 	 	68	% 	
Other (incl. foreign exch. revaluation)	  	 	355	  	 	 	163	  	 	 	192	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at September 30, 2012	  	$	38,200	  	 	$	11,162	  	 	$	27,038	  	 				
Losses and loss expenses incurred	  	 	4,642	  	 	 	1,959	  	 	 	2,683	  	 				
Losses and loss expenses paid	  	 	(4,913	) 	 	 	(1,727	) 	 	 	(3,186	) 	 	 	119	% 	
Other (incl. foreign exch. revaluation)	  	 	17	  	 	 	5	  	 	 	12	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at December 31, 2012	  	$	37,946	  	 	$	11,399	  	 	$	26,547	  	 				
Losses and loss expenses incurred	  	 	2,483	  	 	 	557	  	 	 	1,926	  	 				
Losses and loss expenses paid	  	 	(2,987	) 	 	 	(932	) 	 	 	(2,055	) 	 	 	107	% 	
Other (incl. foreign exch. revaluation)	  	 	(360	) 	 	 	(106	) 	 	 	(254	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at March 31, 2013	  	$	37,082	  	 	$	10,918	  	 	$	26,164	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Add net recoverable on paid losses	  	 	—  	  	 	 	612	  	 	 	(612	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance including net recoverable on paid losses	  	$	37,082	  	 	$	11,530	  	 	$	25,552	  	 				

 
			
Loss Reserve Rollforward	  	Page 12	

Table of Contents

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

 	  	March 31	 	 	December 31	 	
 	  	2013	 	 	2012	 	
Reinsurance recoverable on paid losses and loss expenses	  				 				
Active operations	  	$	409	  	 	$	464	  	
Brandywine and Other Run-off	  	 	284	  	 	 	303	  	
	  	 	 	 	 	 	 	 	
Total	  	$	693	  	 	$	767	  	
	  	 	 	 	 	 	 	 	
Reinsurance recoverable on unpaid losses and loss expenses	  				 				
Active operations	  	$	9,786	  	 	$	10,199	  	
Brandywine and Other Run-off	  	 	1,484	  	 	 	1,551	  	
	  	 	 	 	 	 	 	 	
Total	  	$	11,270	  	 	$	11,750	  	
	  	 	 	 	 	 	 	 	
Gross reinsurance recoverable	  				 				
Active operations	  	$	10,195	  	 	$	10,663	  	
Brandywine and Other Run-off	  	 	1,768	  	 	 	1,854	  	
	  	 	 	 	 	 	 	 	
Total	  	$	11,963	  	 	$	12,517	  	
	  	 	 	 	 	 	 	 	
Provision for uncollectible reinsurance (1) 	  				 				
Active operations	  	$	(274	) 	 	$	(277	) 	
Brandywine and Other Run-off	  	 	(159	) 	 	 	(162	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	(433	) 	 	$	(439	) 	
	  	 	 	 	 	 	 	 	
Net reinsurance recoverable	  				 				
Active operations	  	$	9,921	  	 	$	10,386	  	
Brandywine and Other Run-off	  	 	1,609	  	 	 	1,692	  	
	  	 	 	 	 	 	 	 	
Total	  	$	11,530	  	 	$	12,078	  	

(1)	The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance recoverables, net of approximately $2.5 billion of collateral.	

			
Reinsurance Recoverable	  	Page 13	

Table of Contents

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

 	  	March 31	 	 	December 31	 	
 	  	2013	 	 	2012	 	
Market Value	  				 				 				 				
Fixed maturities available for sale	  	$	47,947	  	 				 	$	47,306	  	 				
Fixed maturities held to maturity	  	 	7,213	  	 				 	 	7,633	  	 				
Short-term investments	  	 	2,893	  	 				 	 	2,228	  	 				
	  	 	 	 	 				 	 	 	 	 				
Total	  	$	58,053	  	 				 	$	57,167	  	 				
	  	 	 	 	 				 	 	 	 	 				
Asset Allocation by Market Value	  				 				 				 				
Treasury	  	$	2,750	  	 	 	5	% 	 	$	2,794	  	 	 	5	% 	
Agency	  	 	2,090	  	 	 	4	% 	 	 	2,024	  	 	 	4	% 	
Corporate and asset-backed	  	 	19,123	  	 	 	33	% 	 	 	18,983	  	 	 	33	% 	
Mortgage-backed	  	 	12,064	  	 	 	21	% 	 	 	12,589	  	 	 	22	% 	
Municipal (1)	  	 	4,532	  	 	 	7	% 	 	 	3,872	  	 	 	7	% 	
Non-U.S.	  	 	14,601	  	 	 	25	% 	 	 	14,677	  	 	 	25	% 	
Short-term investments	  	 	2,893	  	 	 	5	% 	 	 	2,228	  	 	 	4	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	58,053	  	 	 	100	% 	 	$	57,167	  	 	 	100	% 	

Note: Insured municipal bonds represent $749 million, or 17% of our municipal bond holdings.	  	 				
					
Credit Quality by Market Value	  				 				 				 				
AAA	  	$	9,948	  	 	 	17	% 	 	$	9,285	  	 	 	16	% 	
AA	  	 	22,036	  	 	 	38	% 	 	 	22,014	  	 	 	39	% 	
A	  	 	11,150	  	 	 	19	% 	 	 	10,760	  	 	 	19	% 	
BBB	  	 	6,596	  	 	 	11	% 	 	 	6,591	  	 	 	12	% 	
BB	  	 	4,010	  	 	 	7	% 	 	 	4,146	  	 	 	7	% 	
B	  	 	3,956	  	 	 	7	% 	 	 	3,846	  	 	 	6	% 	
Other	  	 	357	  	 	 	1	% 	 	 	525	  	 	 	1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	58,053	  	 	 	100	% 	 	$	57,167	  	 	 	100	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost/Amortized Cost	  				 				 				 				
Fixed maturities available for sale	  	$	45,470	  	 				 	$	44,666	  	 				
Fixed maturities held to maturity	  	 	6,867	  	 				 	 	7,270	  	 				
Short-term investments	  	 	2,893	  	 				 	 	2,228	  	 				
	  	 	 	 	 				 	 	 	 	 				
Subtotal	  	 	55,230	  	 				 	 	54,164	  	 				
Equity securities	  	 	781	  	 				 	 	707	  	 				
Other investments	  	 	2,544	  	 				 	 	2,465	  	 				
	  	 	 	 	 				 	 	 	 	 				
Total	  	$	58,555	  	 				 	$	57,336	  	 				
	  	 	 	 	 				 	 	 	 	 				
Avg. duration of fixed maturities	  	 	4.0 years	  	 				 	 	3.9 years	  	 				
Avg. market yield of fixed maturities (2)	  	 	2.3	% 	 				 	 	2.3	% 	 				
Avg. credit quality (3)	  	 	A/Aa	  	 				 	 	A/Aa	  	 				
Avg. yield on invested assets (4)	  	 	3.7	% 	 				 	 	3.8	% 	 				
 
(1)	The rating of the municipal portfolio is AA with 7% of our holdings pre-funded with AA/Aaa Federal securities. The portfolio is highly diversified predominantly in State general obligation bonds and essential service revenue bonds, including education and utilities (water, power, and sewers).	
(2)	Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.	
(3)	We use a split rating due to S&P’s downgrade of U.S. Treasury and Agency securities.	
(4)	Net investment income, excluding non-recurring items, divided by average cost of fixed maturities and other investments, and average market value of equity securities. Net investment income includes private equity distributions of $24 million and $29 million for Q1 2013 and Q4 2012, respectively.	

			
Investments	  	Page 14	

Table of Contents

	 	ACE Limited
Investment Portfolio—2
(in millions of U.S. dollars)
(Unaudited)	 		
Mortgage-backed Fixed Income Portfolio
Mortgage-backed securities

 	  	S&P Credit Rating	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	
Market Value at March 31, 2013	  				  				  				  				  				  				
Agency residential mortgage-backed (RMBS)	  	$	—  	  	  	$	10,274	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	10,274	  	
Non-agency RMBS	  	 	70	  	  	 	15	  	  	 	33	  	  	 	26	  	  	 	213	  	  	 	357	  	
Commercial mortgage-backed	  	 	1,403	  	  	 	13	  	  	 	10	  	  	 	7	  	  	 	—  	  	  	 	1,433	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at market value	  	$	1,473	  	  	$	10,302	  	  	$	43	  	  	$	33	  	  	$	213	  	  	$	12,064	  	

																									
 	  	S&P Credit Rating	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	
Amortized Cost at March 31, 2013	  				  				  				  				  				  				
Agency RMBS	  	$	—  	  	  	$	9,901	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	9,901	  	
Non-agency RMBS	  	 	69	  	  	 	14	  	  	 	32	  	  	 	25	  	  	 	220	  	  	 	360	  	
Commercial mortgage-backed	  	 	1,338	  	  	 	11	  	  	 	9	  	  	 	6	  	  	 	—  	  	  	 	1,364	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at amortized cost	  	$	1,407	  	  	$	9,926	  	  	$	41	  	  	$	31	  	  	$	220	  	  	$	11,625	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mortgage-backed securities total $12.1 billion, are rated predominantly AA and comprise 21% of the fixed income portfolio. This compares to a 31% mortgage-backed weighting in representative indices of the U.S. fixed income market. The minimum rating for initial purchases of mortgage-backed securities is AA for agency mortgages and AAA for non-agency mortgages.
Securities issued by Federal agencies with implied or explicit government guarantees total $10.3 billion and represent 97% of the residential mortgage-backed portfolio.
Non-agency residential mortgage-backed securities are backed by prime collateral, and broadly diversified in over 33,000 loans. The portfolio’s original loan-to-value ratio is approximately 65% with an average FICO score of 731. With this conservative loan-to-value ratio and subordinated collateral of 5%, the cumulative 5-year foreclosure rate would have to rise to 17% before principal is significantly impaired. The foreclosure rate of ACE’s non-agency RMBS portfolio at March 31, 2013 was 6%.
Commercial mortgage-backed securities of $1.4 billion are rated predominantly AAA, broadly diversified with over 13,000 loans and seasoned with 31% of the portfolio issued before 2006 and 52% of the portfolio issued after 2009. The average loan-to-value ratio is approximately 64% with a debt service coverage ratio in excess of 1.9 and weighted average subordinated collateral of 30%. The cumulative foreclosure rate would have to rise to 43% before principal is impaired. The foreclosure rate of ACE’s commercial mortgage-backed securities portfolio at March 31, 2013 was 1.7%.

			
Investments 2	  	Page 15	

Table of Contents

	 	ACE Limited
Investment Portfolio—3
(in millions of U.S. dollars)
(Unaudited)	 		
U.S. Corporate and Asset-backed Fixed Income Portfolios
Market Value at March 31, 2013

 	  	S&P Credit Rating	 	
 	  	Investment Grade	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	Total	 	
Asset-backed	  	$	613	  	  	$	67	  	  	$	1	  	  	$	—  	  	  	$	681	  	
Banks	  	 	—  	  	  	 	—  	  	  	 	2,412	  	  	 	350	  	  	 	2,762	  	
Basic Materials	  	 	—  	  	  	 	—  	  	  	 	88	  	  	 	246	  	  	 	334	  	
Communications	  	 	—  	  	  	 	—  	  	  	 	789	  	  	 	573	  	  	 	1,362	  	
Consumer, Cyclical	  	 	—  	  	  	 	88	  	  	 	282	  	  	 	241	  	  	 	611	  	
Consumer, Non-Cyclical	  	 	63	  	  	 	506	  	  	 	943	  	  	 	591	  	  	 	2,103	  	
Diversified Financial Services	  	 	—  	  	  	 	54	  	  	 	218	  	  	 	106	  	  	 	378	  	
Energy	  	 	35	  	  	 	27	  	  	 	217	  	  	 	683	  	  	 	962	  	
Industrial	  	 	—  	  	  	 	309	  	  	 	352	  	  	 	220	  	  	 	881	  	
Utilities	  	 	—  	  	  	 	12	  	  	 	555	  	  	 	505	  	  	 	1,072	  	
All Others	  	 	49	  	  	 	144	  	  	 	436	  	  	 	592	  	  	 	1,221	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	760	  	  	$	1,207	  	  	$	6,293	  	  	$	4,107	  	  	$	12,367	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
U.S. Investment Grade Corporate Fixed Income Portfolio
The average credit quality of ACE’s U.S. investment grade bond portfolio is high at A.
ACE prohibits investments in complex structured securities (e.g., CDOs, CLOs) and over-the-counter derivatives and does not permit the use of portfolio leverage.
Corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA 2%, A 1%, BBB 0.5% of total portfolio) and are monitored on a daily basis by ACE via an internal compliance system.
Market Value at March 31, 2013

 	  	S&P Credit Rating	 	
 	  	Below Investment Grade	 	
 	  	BB	 	  	B	 	  	CCC	 	  	Total	 	
Asset-backed	  	$	—  	  	  	$	4	  	  	$	18	  	  	$	22	  	
Banks	  	 	—  	  	  	 	3	  	  	 	—  	  	  	 	3	  	
Basic Materials	  	 	142	  	  	 	167	  	  	 	6	  	  	 	315	  	
Communications	  	 	448	  	  	 	529	  	  	 	27	  	  	 	1,004	  	
Consumer, Cyclical	  	 	537	  	  	 	534	  	  	 	35	  	  	 	1,106	  	
Consumer, Non-Cyclical	  	 	570	  	  	 	858	  	  	 	26	  	  	 	1,454	  	
Diversified Financial Services	  	 	74	  	  	 	107	  	  	 	9	  	  	 	190	  	
Energy	  	 	681	  	  	 	398	  	  	 	15	  	  	 	1,094	  	
Industrial	  	 	390	  	  	 	418	  	  	 	10	  	  	 	818	  	
Utilities	  	 	258	  	  	 	14	  	  	 	—  	  	  	 	272	  	
All Others	  	 	177	  	  	 	296	  	  	 	5	  	  	 	478	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	3,277	  	  	$	3,328	  	  	$	151	  	  	$	6,756	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
U.S. Below Investment Grade Corporate Fixed Income Portfolio
ACE manages high yield bonds as a distinct and separate asset class from investment grade bonds. ACE’s allocation to high yield bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B). Our minimum rating for initial purchase is BB/B.
Six external investment managers are responsible for high yield security selection and portfolio construction.
ACE’s high yield managers have a conservative approach to credit selection and very low historical default experience.
Securities holdings are highly diversified across industries and are subject to a 1.5% issuer limit as a percentage of high yield allocation. The portfolio comprises over 750 issuers with our largest current issuer exposure at $90 million. ACE monitors position limits on a daily basis through an internal compliance system.
Derivative and structured securities (e.g., credit default swaps, CLOs) are not permitted in high yield portfolios.

			
Investments 3	  	Page 16	

Table of Contents

	 	ACE Limited
Investment Portfolio—4
(in millions of U.S. dollars)
(Unaudited)	 		
Non-U.S. Fixed Income Portfolio
March 31, 2013

 	  	Market Value by S&P Credit Rating	 	  	Amortized
Cost	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	  			
United Kingdom	  	$	1,054	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	1,054	  	  	$	1,019	  	
Canada	  	 	908	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	908	  	  	 	883	  	
Republic of Korea	  	 	—  	  	  	 	531	  	  	 	63	  	  	 	—  	  	  	 	—  	  	  	 	594	  	  	 	529	  	
Germany	  	 	432	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	432	  	  	 	423	  	
France	  	 	—  	  	  	 	323	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	323	  	  	 	313	  	
Japan	  	 	—  	  	  	 	321	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	321	  	  	 	320	  	
Kingdom of Thailand	  	 	—  	  	  	 	—  	  	  	 	194	  	  	 	50	  	  	 	—  	  	  	 	244	  	  	 	240	  	
Federative Republic of Brazil	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	243	  	  	 	—  	  	  	 	243	  	  	 	233	  	
Province of Ontario	  	 	—  	  	  	 	212	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	212	  	  	 	202	  	
Province of Quebec	  	 	—  	  	  	 	—  	  	  	 	188	  	  	 	—  	  	  	 	—  	  	  	 	188	  	  	 	178	  	
Commonwealth of Australia	  	 	186	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	187	  	  	 	176	  	
State of Queensland	  	 	58	  	  	 	88	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	146	  	  	 	138	  	
Federation of Malaysia	  	 	—  	  	  	 	—  	  	  	 	129	  	  	 	—  	  	  	 	—  	  	  	 	129	  	  	 	129	  	
United Mexican States	  	 	—  	  	  	 	—  	  	  	 	62	  	  	 	58	  	  	 	—  	  	  	 	120	  	  	 	113	  	
Swiss Confederation	  	 	116	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	116	  	  	 	111	  	
People’s Republic of China	  	 	67	  	  	 	48	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	116	  	  	 	112	  	
State of New South Wales	  	 	85	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	85	  	  	 	81	  	
Taiwan	  	 	—  	  	  	 	82	  	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	84	  	  	 	83	  	
Socialist Republic of Vietnam	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	74	  	  	 	74	  	  	 	69	  	
Russian Federation	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	64	  	  	 	—  	  	  	 	64	  	  	 	63	  	
State of Victoria	  	 	53	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	53	  	  	 	50	  	
Republic of Indonesia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	50	  	  	 	50	  	  	 	49	  	
Republic of Colombia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	49	  	  	 	—  	  	  	 	49	  	  	 	48	  	
Province of British Columbia	  	 	41	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	41	  	  	 	39	  	
Dominion of New Zealand	  	 	—  	  	  	 	38	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	39	  	  	 	39	  	
Other Non-U.S. Government	  	 	207	  	  	 	235	  	  	 	95	  	  	 	47	  	  	 	150	  	  	 	734	  	  	 	715	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Non-U.S. Government Securities	  	$	3,207	  	  	$	1,879	  	  	$	735	  	  	$	511	  	  	$	274	  	  	$	6,606	  	  	$	6,355	  	
Eurozone Non-U.S. Corporate (1) 	  	 	545	  	  	 	357	  	  	 	502	  	  	 	480	  	  	 	406	  	  	 	2,290	  	  	 	2,158	  	
Other Non-U.S. Corporate	  	 	712	  	  	 	600	  	  	 	2,396	  	  	 	1,391	  	  	 	606	  	  	 	5,705	  	  	 	5,377	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	4,464	  	  	$	2,836	  	  	$	3,633	  	  	$	2,382	  	  	$	1,286	  	  	$	14,601	  	  	$	13,890	  	

(1)	Excludes United Kingdom	
Non-U.S. Fixed Income Portfolio
ACE’s non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of ACE’s non-U.S. operations.
75% of ACE’s non-U.S. fixed income portfolios are denominated in G7 currencies.
Average credit quality of non-U.S. fixed income securities is high at A and 54% of holdings are rated AAA or guaranteed by governments or quasi-government agencies.
Corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA 2%, A 1%, BBB 0.5% of total portfolio) and are monitored on a daily basis by ACE via an internal compliance system.

			
Investments 4	  	Page 17	

Table of Contents

	 	ACE Limited
Investment Portfolio—5
(in millions of U.S. dollars)
(Unaudited)	 		
Eurozone Non-U.S. Fixed Income Portfolio (Excluding United Kingdom)
March 31, 2013

 	  	Market Value by Industry	 	  	Amortized
Cost	 	
 	  	Bank	 	  	Financial	 	  	Industrial	 	  	Utility	 	  	Total	 	  			
Netherlands	  	$	182	  	  	$	144	  	  	$	339	  	  	$	142	  	  	$	807	  	  	$	754	  	
France	  	 	116	  	  	 	35	  	  	 	179	  	  	 	157	  	  	 	487	  	  	 	463	  	
Luxembourg	  	 	10	  	  	 	5	  	  	 	229	  	  	 	72	  	  	 	316	  	  	 	296	  	
Germany	  	 	214	  	  	 	—  	  	  	 	60	  	  	 	5	  	  	 	279	  	  	 	267	  	
Euro Supranational	  	 	175	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	175	  	  	 	167	  	
Ireland	  	 	12	  	  	 	1	  	  	 	105	  	  	 	12	  	  	 	130	  	  	 	120	  	
Belgium	  	 	10	  	  	 	—  	  	  	 	30	  	  	 	—  	  	  	 	40	  	  	 	37	  	
Finland	  	 	16	  	  	 	—  	  	  	 	9	  	  	 	3	  	  	 	28	  	  	 	27	  	
Austria	  	 	18	  	  	 	—  	  	  	 	3	  	  	 	—  	  	  	 	21	  	  	 	21	  	
Spain	  	 	6	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	6	  	  	 	6	  	
Portugal	  	 	—  	  	  	 	—  	  	  	 	1	  	  	 	—  	  	  	 	1	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Eurozone Non-U.S. Corporate Securities	  	$	759	  	  	$	185	  	  	$	955	  	  	$	391	  	  	$	2,290	  	  	$	2,158	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Note: ACE has no investments in Greece and Italy.
Top 10 Exposures—Eurozone Banks (Excluding United Kingdom)

March 31, 2013	  	Market Value	 	  	Amortized Cost	 	  	Rating	
European Investment Bank	  	$	142	  	  	$	135	  	  	AAA	
KFW	  	 	140	  	  	 	134	  	  	AAA	
Rabobank Nederland NV	  	 	107	  	  	 	98	  	  	AA-	
Bank Nederlandse Gemeenten	  	 	39	  	  	 	38	  	  	AAA	
BNP Paribas SA	  	 	33	  	  	 	31	  	  	A+	
Credit Agricole Groupe	  	 	33	  	  	 	32	  	  	A	
Groupe BPCE	  	 	24	  	  	 	23	  	  	A	
Erste Abwicklungsanstalt	  	 	24	  	  	 	23	  	  	AA-	
EUROFIMA	  	 	18	  	  	 	17	  	  	AA+	
Societe Generale SA	  	 	17	  	  	 	17	  	  	A	
Top 10 Exposures—Eurozone Corporate (Excluding United Kingdom)

March 31, 2013	  	Market Value	 	  	Amortized Cost	 	  	Rating	
Electricite de France SA	  	$	91	  	  	$	86	  	  	A+	
ING Groep NV	  	 	81	  	  	 	77	  	  	A	
Intelsat SA	  	 	76	  	  	 	71	  	  	B	
Royal Dutch Shell PLC	  	 	74	  	  	 	70	  	  	AA	
Deutsche Telekom AG	  	 	64	  	  	 	58	  	  	BBB+	
LyondellBasell Industries NV	  	 	57	  	  	 	49	  	  	BBB-	
France Telecom SA	  	 	41	  	  	 	39	  	  	A-	
General Electric Co	  	 	34	  	  	 	30	  	  	AA+	
NIBC Holding NV	  	 	33	  	  	 	32	  	  	BBB-	
Porsche Automobil Holding SE	  	 	31	  	  	 	31	  	  	A-	

			
Investments 5	  	Page 18	

Table of Contents

	 	ACE Limited
Investment Portfolio—6
(in millions of U.S. dollars)
(Unaudited)	 		
Investment portfolio
Top 25 Exposures—Fixed Maturity Investments

 	 	March 31, 2013	  	Market
Value	 	  	Rating	
1	 	JP Morgan Chase & Co	  	$	508	  	  	A	
2	 	Goldman Sachs Group Inc	  	 	418	  	  	A-	
3	 	General Electric Co	  	 	375	  	  	AA+	
4	 	Citigroup Inc	  	 	345	  	  	A-	
5	 	Bank of America Corp	  	 	304	  	  	A-	
6	 	Morgan Stanley	  	 	282	  	  	A-	
7	 	Wells Fargo & Co	  	 	265	  	  	A+	
8	 	Verizon Communications Inc	  	 	260	  	  	A-	
9	 	AT&T INC	  	 	218	  	  	A-	
10	 	HSBC Holdings Plc	  	 	214	  	  	A+	
11	 	Comcast Corp	  	 	187	  	  	A-	
12	 	Mondelez International Inc	  	 	159	  	  	BBB	
13	 	Anheuser-Busch InBev NV	  	 	143	  	  	A	
14	 	BP Plc	  	 	135	  	  	A	
15	 	Philip Morris International Inc	  	 	134	  	  	A	
16	 	Duke Energy Corp	  	 	128	  	  	BBB+	
17	 	Time Warner Cable Inc	  	 	125	  	  	BBB	
18	 	Pfizer Inc	  	 	123	  	  	AA	
19	 	Barclays Plc	  	 	118	  	  	A	
20	 	Enterprise Products Partners LP	  	 	117	  	  	BBB+	
21	 	Credit Suisse Group	  	 	113	  	  	A	
22	 	Royal Bank of Scotland Group Plc	  	 	113	  	  	A-	
23	 	American Express Co	  	 	113	  	  	BBB+	
24	 	Rabobank Nederland NV	  	 	107	  	  	AA-	
25	 	UBS AG	  	 	105	  	  	A	

			
Investments 6	  	Page 19	

Table of Contents

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

 	  	Three months ended March 31, 2013	 	
 	  	Net Realized	 	 	Net Unrealized	 	 	 	 	
 	  	Gains	 	 	Gains	 	 	Net	 	
 	  	(Losses)   (1)	 	 	(Losses)	 	 	Impact	 	
Fixed maturities	  	$	36	  	 	$	(191	) 	 	$	(155	) 	
Fixed income derivatives	  	 	18	  	 	 	—  	  	 	 	18	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total fixed maturities	  	 	54	  	 	 	(191	) 	 	 	(137	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Public equity	  	 	(1	) 	 	 	14	  	 	 	13	  	
Private equity	  	 	28	  	 	 	25	  	 	 	53	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total equity	  	 	27	  	 	 	39	  	 	 	66	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market gains from derivative transactions (2)	  	 	78	  	 	 	—  	  	 	 	78	  	
Foreign exchange gains (2)	  	 	76	  	 	 	—  	  	 	 	76	  	
Other	  	 	—  	  	 	 	1	  	 	 	1	  	
Partially-owned entities (3)	  	 	4	  	 	 	—  	  	 	 	4	  	
Income tax expense (benefit)	  	 	32	  	 	 	(56	) 	 	 	(24	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net gains (losses)	  	$	207	  	 	$	(95	) 	 	$	112	  	

(1)	Other-than-temporary impairments for the quarter includes $1 million for fixed maturities, $1 million for public equity, and $1 million for private equity.	
(2)	Includes $78 million of realized gains from variable annuity reinsurance for the quarter which comprises $328 million in mark-to-market gains from derivative transactions, net of $250 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange gains for the quarter were $41 million.	
(3)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	

 	  	Three months ended March 31, 2012	 	
 	  	Net Realized	 	 	Net Unrealized	 	  	 	 	
 	  	Gains	 	 	Gains	 	  	Net	 	
 	  	(Losses) (4)	 	 	(Losses)	 	  	Impact	 	
Fixed maturities	  	$	34	  	 	$	243	  	  	$	277	  	
Fixed income derivatives	  	 	42	  	 	 	—  	  	  	 	42	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total fixed maturities	  	 	76	  	 	 	243	  	  	 	319	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Public equity	  	 	1	  	 	 	38	  	  	 	39	  	
Private equity	  	 	23	  	 	 	7	  	  	 	30	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total equity	  	 	24	  	 	 	45	  	  	 	69	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Mark-to-market gains from derivative transactions (5)	  	 	192	  	 	 	—  	  	  	 	192	  	
Foreign exchange losses (5)	  	 	(5	) 	 	 	—  	  	  	 	(5	) 	
Other	  	 	(2	) 	 	 	4	  	  	 	2	  	
Partially-owned entities (6)	  	 	(7	) 	 	 	—  	  	  	 	(7	) 	
Income tax expense	  	 	6	  	 	 	49	  	  	 	55	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Net gains	  	$	272	  	 	$	243	  	  	$	515	  	

(4)	Other-than-temporary impairments for the quarter includes $7 million for fixed maturities, $2 million for private equity, and $1 million for public equity.	
(5)	Includes $197 million of realized gains from variable annuity reinsurance for the quarter which comprises $428 million in mark-to-market gains from derivatives transactions, net of $231 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange gains for the quarter were $34 million.	
(6)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	

			
Investment Gains (Losses)	  	Page 20	

Table of Contents

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

 	  	March 31	 	 	December 31	 	 	December 31	 	
 	  	2013	 	 	2012	 	 	2011	 	
Total short-term debt (1)	  	$	1,402	  	 	$	1,401	  	 	$	1,251	  	
Total long-term debt (2)	  	 	4,307	  	 	 	3,360	  	 	 	3,360	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total debt	  	$	5,709	  	 	$	4,761	  	 	$	4,611	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total trust preferred securities	  	$	309	  	 	$	309	  	 	$	309	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	  	$	27,942	  	 	$	27,531	  	 	$	24,332	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total capitalization	  	$	33,960	  	 	$	32,601	  	 	$	29,252	  	
Tangible capital (3)	  	$	29,051	  	 	$	27,626	  	 	$	24,453	  	
Leverage ratios	  				 				 				
Debt/ total capitalization	  	 	16.8	% 	 	 	14.6	% 	 	 	15.8	% 	
Debt plus trust preferred securities/ total capitalization	  	 	17.7	% 	 	 	15.6	% 	 	 	16.8	% 	
Debt/ tangible capital	  	 	19.7	% 	 	 	17.2	% 	 	 	18.9	% 	
Debt plus trust preferred securities/ tangible capital	  	 	20.7	% 	 	 	18.4	% 	 	 	20.1	% 	
Note: As of March 31, 2013, there was $1.4 billion usage of credit facilities on a total commitment of $1.9 billion.
 
(1)	Repurchase agreements in the amount of $608 million matured during the quarter, and there were new repurchase agreements in the amount of $609 million.	
(2)	During Q1 2013, we issued $950 million par value of 10-year and 30-year senior debt.	
(3)	Tangible capital is equal to total capitalization less goodwill and other intangible assets.	

			
Capital Structure	  	Page 21	

Table of Contents

	 	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 March 31	 	
 	  	2013	 	 	2012	 	
Numerator	  				 				
Operating income to common shares (1)	  	$	746	  	 	$	701	  	
Net realized gains (losses), net of income tax	  	 	207	  	 	 	272	  	
	  	 	 	 	 	 	 	 	
Net income	  	$	953	  	 	$	973	  	
	  	 	 	 	 	 	 	 	
Rollforward of Common Shares Outstanding	  				 				
Shares—beginning of period	  	 	340,321,534	  	 	 	336,927,276	  	
Repurchase of shares	  	 	(1,808,300	) 	 	 	(100,000	) 	
Shares issued, excluding option exercises	  	 	947,536	  	 	 	1,036,709	  	
Issued for option exercises	  	 	584,486	  	 	 	789,397	  	
	  	 	 	 	 	 	 	 	
Shares—end of period	  	 	340,045,256	  	 	 	338,653,382	  	
	  	 	 	 	 	 	 	 	
Denominator	  				 				
Weighted average shares outstanding	  	 	340,778,142	  	 	 	338,567,341	  	
Effect of other dilutive securities	  	 	3,128,226	  	 	 	3,123,641	  	
	  	 	 	 	 	 	 	 	
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	343,906,368	  	 	 	341,690,982	  	
	  	 	 	 	 	 	 	 	
Basic earnings per share	  				 				
Operating income (1)	  	$	2.19	  	 	$	2.07	  	
Net realized gains (losses), net of income tax	  	 	0.61	  	 	 	0.80	  	
	  	 	 	 	 	 	 	 	
Net income	  	$	2.80	  	 	$	2.87	  	
	  	 	 	 	 	 	 	 	
Diluted earnings per share	  				 				
Operating income (1)	  	$	2.17	  	 	$	2.05	  	
Net realized gains (losses), net of income tax	  	 	0.60	  	 	 	0.79	  	
	  	 	 	 	 	 	 	 	
Net income	  	$	2.77	  	 	$	2.84	  	

(1)	See Non-GAAP Financial Measures.	

			
Earnings per share	  	Page 22	

Table of Contents

	 	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 generally accepted accounting principles (GAAP). A reconciliation of book value per common share is provided on page 25.
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, policy 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). Life underwriting income includes net investment income and gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.
Loss and loss expense ratio excluding the impact of catastrophe losses and prior period development (PPD) is a non-GAAP financial measure. The loss ratio numerator includes Losses and loss expenses adjusted to exclude catastrophe losses and PPD. The loss ratio denominator includes Net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating this ratio. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
Combined ratio excluding catastrophe losses and PPD is a non-GAAP financial measure. The ratio numerator includes losses and loss expenses, policy acquisition costs, and administrative expenses adjusted to exclude catastrophe losses and PPD. The ratio denominator includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected and net earned premium adjustments on loss sensitive policies. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
Life net premiums written and deposits collected, excluding life reinsurance run-off products, is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (life deposits) are properly not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our Life business because new life deposits are an important component of production and key to our efforts to grow our business. However, we exclude results associated with our life reinsurance run-off products as there is no new life reinsurance business currently being written.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses) is an annualized non-GAAP financial measure. The ROE numerator includes income adjusted to exclude net realized gains (losses), net of tax. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate, multiply by four. Operating ROE is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.
Operating income or Income excluding net realized gains (losses), net of tax, is a common performance measurement for insurance companies and non-GAAP financial measure. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially owned entities because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. Operating income or Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with GAAP.
Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on net realized gains (losses). The denominator excludes net realized gains (losses), before tax. We exclude net realized gains (losses) and the related tax impact because these amounts are heavily influenced by, and fluctuate in part according to, the availability of market opportunities. Operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.
The following table presents the reconciliation of Net income to Operating income:

 	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	  	Full Year	 	
 	  	1Q-13	 	  	4Q-12	 	  	3Q-12	 	 	2Q-12	 	 	1Q-12	 	  	2012	 	
Net income, as reported	  	$	953	  	  	$	765	  	  	$	640	  	 	$	328	  	 	$	973	  	  	$	2,706	  	
Net realized gains (losses)	  	 	206	  	  	 	272	  	  	 	(60	) 	 	 	(394	) 	 	 	260	  	  	 	78	  	
Net realized gains (losses) in other income (expense) (1)	  	 	33	  	  	 	23	  	  	 	20	  	 	 	1	  	 	 	18	  	  	 	62	  	
Income tax expense on net realized gains (losses)	  	 	32	  	  	 	22	  	  	 	8	  	 	 	22	  	 	 	6	  	  	 	58	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	746	  	  	$	492	  	  	$	688	  	 	$	743	  	 	$	701	  	  	$	2,624	  	

(1)	Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	

			
Reconciliation Non-GAAP	  	Page 23	

Table of Contents

	 	ACE Limited
Non-GAAP Financial Measures—2
(in millions of U.S. dollars, except ratios)
(Unaudited)	 		
Regulation G—Non-GAAP Financial Measures (continued)
The following table presents the reconciliation of effective tax rate to the operating effective tax rate:

 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Full Year	 	
 	  	1Q-13	 	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	2012	 	
Tax expense (benefit), as reported	  	$	122	  	 	$	(135	) 	 	$	147	  	 	$	148	  	 	$	110	  	 	$	270	  	
Tax expense on net realized gains (losses)	  	 	32	  	 	 	22	  	 	 	8	  	 	 	22	  	 	 	6	  	 	 	58	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax expense (benefit), adjusted	  	$	90	  	 	$	(157	) 	 	$	139	  	 	$	126	  	 	$	104	  	 	$	212	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before tax, as reported	  	$	1,075	  	 	$	630	  	 	$	787	  	 	$	476	  	 	$	1,083	  	 	$	2,976	  	
Less: realized gains (losses)	  	 	206	  	 	 	272	  	 	 	(60	) 	 	 	(394	) 	 	 	260	  	 	 	78	  	
Less: realized gains (losses) in other income (expense)	  	 	33	  	 	 	23	  	 	 	20	  	 	 	1	  	 	 	18	  	 	 	62	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income before tax	  	$	836	  	 	$	335	  	 	$	827	  	 	$	869	  	 	$	805	  	 	$	2,836	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	11.3	% 	 	 	-21.4	% 	 	 	18.7	% 	 	 	31.0	% 	 	 	10.2	% 	 	 	9.1	% 	
Adjustment for tax impact of net realized gains (losses)	  	 	-0.5	% 	 	 	-25.4	% 	 	 	-2.0	% 	 	 	-16.4	% 	 	 	2.8	% 	 	 	-1.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating effective tax rate	  	 	10.8	% 	 	 	-46.8	% 	 	 	16.7	% 	 	 	14.6	% 	 	 	13.0	% 	 	 	7.5	% 	

The following table presents the reconciliation of ROE to Operating ROE:	  	
							
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Full Year	 	
 	  	1Q-13	 	 	 	 	 	 	 	 	 	 	 	1Q-12	 	 	2012	 	
Net income	  	$	953	  	 				 				 				 	$	973	  	 	$	2,706	  	
Operating income	  	$	746	  	 				 				 				 	$	701	  	 	$	2,624	  	
Equity—beginning of period, as reported	  	$	27,531	  	 				 				 				 	$	24,332	  	 	$	24,332	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	2,633	  	 				 				 				 	 	1,715	  	 	 	1,715	  	
	  	 	 	 	 				 				 				 	 	 	 	 	 	 	 	
Equity—beginning of period, as adjusted	  	$	24,898	  	 				 				 				 	$	22,617	  	 	$	22,617	  	
	  	 	 	 	 				 				 				 	 	 	 	 	 	 	 	
Equity—end of period, as reported	  	$	27,942	  	 				 				 				 	$	25,431	  	 	$	27,531	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	2,538	  	 				 				 				 	 	1,958	  	 	 	2,633	  	
	  	 	 	 	 				 				 				 	 	 	 	 	 	 	 	
Equity—end of period, as adjusted	  	$	25,404	  	 				 				 				 	$	23,473	  	 	$	24,898	  	
	  	 	 	 	 				 				 				 	 	 	 	 	 	 	 	
Average equity, as reported	  	$	27,737	  	 				 				 				 	$	24,882	  	 	$	25,932	  	
Average equity, as adjusted	  	$	25,151	  	 				 				 				 	$	23,045	  	 	$	23,758	  	
Operating ROE	  	 	11.9	% 	 				 				 				 	 	12.2	% 	 	 	11.0	% 	
ROE	  	 	13.7	% 	 				 				 				 	 	15.6	% 	 	 	10.4	% 	

			
Reconciliation Non-GAAP 2	  	Page 24	

Table of Contents

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

 	  	March 31	 	 	December 31	 	 	March 31	 	
 	  	2013	 	 	2012	 	 	2012	 	
Shareholders’ equity	  	$	27,942	  	 	$	27,531	  	 	$	25,431	  	
Less: goodwill and other intangible assets	  	 	4,909	  	 	 	4,975	  	 	 	4,860	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Numerator for tangible book value per share	  	$	23,033	  	 	$	22,556	  	 	$	20,571	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Book value—% change over prior quarter	  	 	1.5	% 	 	 	2.1	% 	 	 	4.5	% 	
Tangible book value—% change over prior quarter	  	 	2.1	% 	 	 	2.7	% 	 	 	5.3	% 	
Denominator	  	 	340,045,256	  	 	 	340,321,534	  	 	 	338,653,382	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Book value per common share	  	$	82.17	  	 	$	80.90	  	 	$	75.09	  	
Tangible book value per common share	  	$	67.74	  	 	$	66.28	  	 	$	60.74	  	
Reconciliation of Book Value	  				 				 				
Shareholders’ equity, beginning of quarter	  	$	27,531	  	 	$	26,963	  	 	$	24,332	  	
Operating income	  	 	746	  	 	 	492	  	 	 	701	  	
Net realized gains (losses), net of tax	  	 	207	  	 	 	273	  	 	 	272	  	
Net unrealized gains (losses), net of tax	  	 	(95	) 	 	 	(70	) 	 	 	243	  	
Repurchase of shares	  	 	(154	) 	 	 	—  	  	 	 	(7	) 	
Dividend declared on common shares	  	 	(168	) 	 	 	(168	) 	 	 	(200	) 	
Cumulative translation, net of tax	  	 	(156	) 	 	 	(37	) 	 	 	56	  	
Pension liability	  	 	14	  	 	 	(20	) 	 	 	(1	) 	
Other (1)	  	 	17	  	 	 	98	  	 	 	35	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
	  	$	27,942	  	 	$	27,531	  	 	$	25,431	  	

(1)	Other primarily includes proceeds from exercise of stock options and stock compensation.	

			
Reconciliation Book Value	  	Page 25	

Table of Contents

	 	ACE Limited
 Glossary	 		
ACE Limited Consolidated comprises all segments including Corporate and Other.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses): Operating income or Income excluding net realized gains (losses), net of tax, divided by average shareholders’ equity for the period excluding unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate multiply by four.
Book value per common share: Shareholders’ equity divided by the shares outstanding.
Combined Insurance: Combined Insurance Company of America, acquired April 1, 2008.
Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding life business. Calculated on a GAAP basis.
Operating effective tax rate: Income tax expense excluding tax expense (benefit) on net realized gains (losses) divided by income excluding net realized gains (losses) before tax.
G7: A group of seven industrialized nations including Canada, France, Germany, Italy, Japan, United Kingdom, and the United States.
Life underwriting income: Net premiums earned and net investment income less policy benefits, acquisition costs, and administrative expenses. In addition, Life underwriting income includes gains/losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.
NM: Not meaningful.
Tangible book value per common share: Shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.
Tangible capital: Total capitalization less goodwill and other intangible assets.
Total capitalization: Short-term debt, long-term debt, trust preferreds, and shareholders’ equity.

			
Glossary	  	Page 26