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)—October 28, 2003
 
ACE LIMITED
(Exact name of registrant as specified in its charter)
 
Cayman Islands	 	1-11778	 	98-0091805	
(State or other jurisdiction)	 	(Commission File Number)	 	(I.R.S. Employer of Incorporation
Identification No.)	
 
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM 08 Bermuda
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (441) 295-5200
 
Not applicable
(Former name or former address, if changed since last report)

Item 7.	 	Financial Statements, Pro Forma Financial Information and Exhibits.	
 
(c)  Exhibits	 		
 
Exhibit
Number
	  	Description

99.1	  	Press release, dated October 28, 2003, reporting third quarter results	
		
99.2	  	Third quarter Financial Supplement	
 
Item 12.	 	Results of Operations and Financial Condition 	
 
On October 28, 2003, ACE Limited issued a press release reporting its third quarter 2003 results and the availability of its third quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.
 
In accordance with general instruction B.6 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 12 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

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: October 28, 2003

EXHIBIT INDEX
 
Number
	  	Description
	  	Method of Filing
	
99.1	  	Press release, dated October 28, 2003, reporting third quarter results	  	Furnished herewith	
			
99.2	  	Third quarter Financial Supplement	  	Furnished herewith	
 
Exhibit 99.1
 
[LOGO]	  	ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue Bermuda
Hamilton HM 08
Bermuda	  	PO Box HM 1015
Hamilton HM DX
Bermuda
441 295-5200 main
441 292-8675 fax

www.acelimited.com	 	 
              News
              Release	
 
FOR IMMEDIATE RELEASE
 	 	 	
  	  	 	  	Investor Contact:        	 	Helen M. Wilson
(441) 299-9283	
				
 	  	 	  	Media Contact:           	 	Anna Lowry
(441) 278-6683	
 
ACE LIMITED REPORTS THIRD QUARTER RESULTS
 
HAMILTON, Bermuda, October 28, 2003 —ACE Limited (NYSE:ACE) today reported that fully diluted net income per share totaled $1.22, which included after-tax net realized gains of $51 million for the quarter. This compared with a net loss of $0.24 per share for the quarter a year ago after considering $205 million in net realized losses. Income excluding net realized gains (losses) for the third quarter of 2003 was up 105% to a record $304 million, or $1.04 per share, compared with $148 million or $0.53 per share for the same quarter last year. (1)
 
Net premiums written increased 4% to $2.3 billion for the quarter. Out of total net premiums written, consolidated property and casualty increased by 27%, while Financial Services declined 78% reflecting the erratic nature of production in this segment. Most of this decline was due to the absence of new loss portfolio transfer and equity CDO premium for the quarter.
 
Brian Duperreault, Chairman and Chief Executive Officer of ACE Limited commented, “This was another excellent quarter for our Company that once again demonstrated the growing strength of our organization, our global presence and diversified product capability. ACE recorded increased income before net realized gains (losses) in every operating segment for the quarter. We remain optimistic about business conditions for the balance of the year and beyond.”
 
Other operating highlights were as follows:
 
 	•	The P&C combined ratio was 91.6% for the quarter compared with 98.0% a year ago	
 
 	•	Current quarter catastrophe losses totaled $42 million or 1.9% of P&C earned premiums for the quarter, compared with $100 million, or 6.7% of P&C earned premiums in the comparable quarter of 2002	
 
 	•	Operating cash flow amounted to $1.1 billion for the quarter	
 
 	•	Net investment income increased 9% to $216 million	
 
 	•	Diluted book value per ordinary share increased to $27.76 from $24.16 at December 30, 2002, up 15% (2)	
 
Shareholders’ equity is $8.3 billion, an increase of 31% from December 31, 2002. Tangible equity amounted to $5.6 billion, a gain of 53% in the first nine months. Total capital resources were $10.7 billion as of September 30, 2003. ACE’s debt to total capital ratio improved to 17.7%. Income before net realized gains as a percent of average equity, including the application of FAS 115, on an annualized basis totaled 15.2% for the quarter, and 16.8 % excluding FAS 115.
 
Page 1/6

Financial results improved over the prior year’s results for each segment; details are available in the financial supplement. Key items include:
 
 	•	Insurance-North American: Net premiums written rose 23% in the quarter and the combined ratio was 91.9% reflecting the positive contributions made by the major business units.	
 
 	•	Insurance-Overseas General: Net premiums written were up 26% as reported and 19% excluding the effect of foreign exchange. The foreign exchange impact on earnings was minimal. The segment’s combined ratio improved to 92.9%. We are experiencing particularly strong results in our European and Asia Pacific operations.	
 
 	•	Global Reinsurance: Net premiums written were up 66%, a result of our continued strategy to diversify our reinsurance operations into a multi-line reinsurer. This segment had an excellent combined ratio of 75.0% in the quarter. The company is developing its casualty reinsurance market with segment net written premium year-to-date of $1 billion. We incurred catastrophe losses of $12 million in the quarter.	
 
 	•	Financial Services: Net premiums written were $105 million in the third quarter of 2003, principally arising from the Financial Guaranty business. Income excluding net realized gains (losses) was up 19% in the quarter. The segment had a $26 million pre-tax realized gain on its FAS 133 mark-to-market and reported a combined ratio of 89.5% for the third quarter.	
 
Please refer to the ACE Financial Supplement September 30, 2003, which is posted on the Company’s website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, financial guaranty portfolio, investment portfolio and capital structure. ACE’s website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports fin_supp_september_30_2003.xls . (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser’s URL address field.)
 
ACE Limited (NYSE: ACE) will host its third quarter earnings conference call and webcast on Wednesday, October 29, 2003 beginning at 8:00 a.m. EST. The call is available via live and archived webcast at www.acelimited.com or by dialing 1-973-582-2745. Please refer to our website in the “Investor Information, Calendar of Events” for details. A replay of the call will be available from Wednesday, October 29, 2003 until Wednesday, November 12, 2003 at 5:00 p.m. EST. To listen to the replay, dial: 1-877-519-4471 (in the United States) or 1-973-341-3080 (international); passcode 4224312.
 
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. A component of the Standard & Poor’s 500 stock index, ACE Group conducts its business on a worldwide basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: http://www.acelimited.com .

  	1 Income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments is a common performance measurement. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. This measure should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).	
 
  	2 Diluted book value per ordinary share is ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.	
 
Page 2/6

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
 
Any forward-looking statements made in this press release reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Company’s forward-looking statements could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related businesses, new theories of liability, judicial and legislative developments, litigation tactics, the amount and timing of reinsurance recoverable, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
(tables to follow)
 
Page 3/6

ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)
 
 	  	September 30
2003
	  	December 31
2002
	
 	  	(Unaudited)	  	(Audited)	
Assets	  	 	 	  	 	 	
Total investments and cash	  	$	22,085	  	$	18,324	
Reinsurance recoverable	  	 	14,032	  	 	13,991	
Insurance and reinsurance balances receivable	  	 	2,821	  	 	2,654	
Other assets	  	 	8,296	  	 	8,482	
 	  			  			
Total assets	  	$	47,234	  	$	43,451	

Liabilities	  	 	 	  	 	 	
Unpaid losses and loss expenses	  	$	25,637	  	$	24,315	
Unearned premiums	  	 	6,243	  	 	5,586	
Other liabilities	  	 	7,008	  	 	6,850	
 	  			  			
Total liabilities	  	$	38,888	  	$	36,751	

Commitments and contingencies	  	 	 	  	 	 	
			
Mezzanine equity	  	$	—  	  	$	311	
			
Shareholders’ equity	  	 	 	  	 	 	
Total shareholders’ equity	  	$	8,346	  	$	6,389	
 	  			  			
Total liabilities, mezzanine equity and shareholders’ equity	  	$	47,234	  	$	43,451	
 	  			  			
Diluted book value per ordinary share (2) 	  	$	27.76	  	$	24.16	
 
Page 4/6

ACE Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
 
 	  	Three Months Ended
September 30
	 	 	Nine Months Ended
September 30
	 	
 	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Gross premiums written	  	$	3,451	 	 	$	3,528	 	 	$	10,969	 	 	$	9,575	 	
Net premiums written	  	 	2,306	 	 	 	2,223	 	 	 	7,642	 	 	 	6,084	 	
Net premiums earned	  	 	2,397	 	 	 	1,925	 	 	 	6,775	 	 	 	4,861	 	
Losses and loss expenses	  	 	1,519	 	 	 	1,328	 	 	 	4,261	 	 	 	3,142	 	
Life and annuity benefits	  	 	45	 	 	 	60	 	 	 	137	 	 	 	106	 	
Policy acquisition costs	  	 	343	 	 	 	253	 	 	 	973	 	 	 	685	 	
Administrative expenses	  	 	293	 	 	 	250	 	 	 	840	 	 	 	678	 	
 	  				 				 				 				
Underwriting income	  	 	197	 	 	 	34	 	 	 	564	 	 	 	250	 	
Net investment income	  	 	216	 	 	 	199	 	 	 	633	 	 	 	600	 	
Other income (expense)	  	 	(3	)	 	 	(15	)	 	 	(8	)	 	 	(22	)	
Interest expense	  	 	45	 	 	 	48	 	 	 	133	 	 	 	146	 	
Income tax expense	  	 	61	 	 	 	22	 	 	 	187	 	 	 	89	 	
 	  				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	304	 	 	$	148	 	 	$	869	 	 	$	593	 	
Net realized gains (losses)	  	 	57	 	 	 	(235	)	 	 	124	 	 	 	(401	)	
Tax effect of net realized gains (losses)	  	 	(6	)	 	 	30	 	 	 	(20	)	 	 	53	 	
 	  				 				 				 				
Net income	  	 	355	 	 	 	(57	)	 	 	973	 	 	 	245	 	
Preference shares dividend	  	 	(11	)	 	 	—  	 	 	 	(15	)	 	 	—  	 	
FELINE PRIDE dividend	  	 	—  	 	 	 	(6	)	 	 	(10	)	 	 	(19	)	
 	  				 				 				 				
Net income available to holders of Ordinary Shares	  	$	344	 	 	$	(63	)	 	$	948	 	 	$	226	 	
 	  				 				 				 				
Diluted earnings per share:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	1.04	 	 	$	0.53	 	 	$	3.08	 	 	$	2.13	 	
Net income	  	$	1.22	 	 	$	(0.24	)	 	$	3.46	 	 	$	0.84	 	
Weighted average diluted shares outstanding	  	 	281,890,236	 	 	 	268,262,197	 	 	 	274,206,084	 	 	 	270,195,775	 	
Loss and loss expense ratio	  	 	64.6	%	 	 	71.0	%	 	 	64.2	%	 	 	66.1	%	
Policy acquisition cost ratio	  	 	14.4	%	 	 	13.4	%	 	 	14.5	%	 	 	14.1	%	
Administrative expense ratio	  	 	12.4	%	 	 	13.3	%	 	 	12.6	%	 	 	14.2	%	
Combined ratio	  	 	91.4	%	 	 	97.7	%	 	 	91.3	%	 	 	94.4	%	
 
Ratios exclude life reinsurance business
 
Page 5/6

ACE Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Three Months Ended
September 30
	 	 	Nine Months Ended
September 30
	 	
 	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Gross Premiums Written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,819	 	 	$	1,783	 	 	$	5,131	 	 	$	4,476	 	
Insurance—Overseas General	  	 	1,200	 	 	 	1,008	 	 	 	3,850	 	 	 	2,911	 	
Global Reinsurance*	  	 	325	 	 	 	244	 	 	 	1,231	 	 	 	889	 	
Financial Services	  	 	107	 	 	 	493	 	 	 	757	 	 	 	1,299	 	
 	  				 				 				 				
Total	  	$	3,451	 	 	$	3,528	 	 	$	10,969	 	 	$	9,575	 	
 	  				 				 				 				
Net Premiums Written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,065	 	 	$	869	 	 	$	2,967	 	 	$	2,100	 	
Insurance—Overseas General	  	 	872	 	 	 	690	 	 	 	2,769	 	 	 	1,920	 	
Global Reinsurance*	  	 	264	 	 	 	188	 	 	 	1,143	 	 	 	795	 	
Financial Services	  	 	105	 	 	 	476	 	 	 	763	 	 	 	1,269	 	
 	  				 				 				 				
Total	  	$	2,306	 	 	$	2,223	 	 	$	7,642	 	 	$	6,084	 	
 	  				 				 				 				
Net Premiums Earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	990	 	 	$	654	 	 	$	2,663	 	 	$	1,733	 	
Insurance—Overseas General	  	 	882	 	 	 	647	 	 	 	2,556	 	 	 	1,722	 	
Global Reinsurance*	  	 	320	 	 	 	251	 	 	 	927	 	 	 	571	 	
Financial Services	  	 	205	 	 	 	373	 	 	 	629	 	 	 	835	 	
 	  				 				 				 				
Total	  	$	2,397	 	 	$	1,925	 	 	$	6,775	 	 	$	4,861	 	
 	  				 				 				 				
Income (Loss) Excluding Net Realized Gains (Losses) (1)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Insurance—North American	  	$	125	 	 	$	113	 	 	$	379	 	 	$	333	 	
Insurance—Overseas General	  	 	86	 	 	 	(16	)	 	 	221	 	 	 	44	 	
Global Reinsurance*	  	 	95	 	 	 	66	 	 	 	266	 	 	 	224	 	
Financial Services	  	 	57	 	 	 	48	 	 	 	174	 	 	 	152	 	
Corporate	  	 	(59	)	 	 	(63	)	 	 	(171	)	 	 	(160	)	
 	  				 				 				 				
Total	  	$	304	 	 	$	148	 	 	$	869	 	 	$	593	 	

 	*	Includes both property and casualty reinsurance and life reinsurance	
 
# # #
 
Page 6/6
 
Exhibit 99.2
[GRAPHIC APPEARS HERE]
 
ACE Limited
Financial Supplement
 
September 30, 2003
 
Investor Contact	  	Helen M. Wilson
Phone: (441) 299-9283
Fax: (441) 292-8675
email: investorrelations@ace.bm	  	This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.	
 
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
 
Any forward-looking statements made in this financial supplement reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Company’s forward-looking statements concerning reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience which differs from the Company’s assumptions, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative developments, litigation tactics, credit developments among reinsurers and other factors identified in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, the Company’s quarterly reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003 and in the Company’s earnings press release, which are available on the Company’s website. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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ACE Limited
 
Financial Supplement Table of Contents
 
 	 	 	  	Page
	
I.	 	Financial Highlights	  	 	
 	 	—  Consolidated Financial Highlights	  	1	
			
II.	 	Consolidated Results	  	 	
 	 	—  Consolidated Results—Consecutive Quarters	  	2-3	
 	 	—  Computation of Basic and Diluted Earnings Per Share	  	4	
 	 	—  Summary Consolidated Balance Sheets	  	5	
 	 	—  Consolidated Premiums by Line of Business	  	6	
 	 	—  Consolidating Statement of Operations	  	7-8	
			
III.	 	Segment Results	  	 	
  	 	—  Insurance-North American	  	9	
 	 	—  Insurance-Overseas General	  	10-11	
 	 	—  Global Reinsurance	  	12-13	
 	 	—  Financial Services	  	14-15	
 	 	—  Financial Guaranty Profile	  	16-17	
 	 	—  Financial Services Portfolio	  	18-21	
			
IV.	 	Balance Sheet Details	  	 	
 	 	—  Loss Reserve Rollforward	  	22	
 	 	—  Asbestos and Environmental Reserves	  	23	
 	 	—  Reinsurance Recoverable Analysis	  	24-27	
 	 	—  Investment Portfolio	  	28-29	
 	 	—  Realized and Unrealized Gains (Losses)	  	30	
 	 	—  Capital Structure	  	31	
			
V.	 	Other Disclosures	  	 	
 	 	—  Non-GAAP Financial Measures and Comprehensive Income	  	32	
 	 	—  Diluted Book Value per Ordinary Share	  	33	
 	 	—  Statutory Accounting Principles to GAAP Reconciliation	  	34	
 	 	—  Glossary	  	35	

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ACE Limited
 
Consolidated Financial Highlights
(in millions of U.S. dollars, except per share data and ratios)
(Unaudited)
 
 	  	Three months
ended Sept. 30
	 	 	% Change
3Q-03 vs.
3Q-02
	  	Nine months
ended Sept. 30
	  	% Change
YTD-
03 vs.
YTD-02
	
 	  	2003
	  	2002
	 	 		  	2003
	  	2002
	  		
Gross premiums written	  	$	3,451	  	$	3,528	 	 	-2%	  	$	10,969	  	$	9,575	  	15%	
Net premiums written	  	$	2,306	  	$	2,223	 	 	4%	  	$	7,642	  	$	6,084	  	26%	
Net premiums earned	  	$	2,397	  	$	1,925	 	 	25%	  	$	6,775	  	$	4,861	  	39%	
Net investment income	  	$	216	  	$	199	 	 	9%	  	$	633	  	$	600	  	6%	
Income excluding net realized gains (losses)	  	$	304	  	$	148	 	 	105%	  	$	869	  	$	593	  	47%	
Net income	  	$	355	  	$	(57	)	 	NM	  	$	973	  	$	245	  	297%	
Comprehensive income	  	$	210	  	$	104	 	 	101%	  	$	1,201	  	$	428	  	180%	
Operating cash flow	  	$	1,060	  	$	1,020	 	 	4%	  	$	2,638	  	$	1,591	  	66%	
Combined ratio	  	 	 	  	 	 	 	 	 	  	 	 	  	 	 	  	 	
Loss and loss expense ratio	  	 	64.6%	  	 	71.0%	 	 	 	  	 	64.2%	  	 	66.1%	  	 	
Underwriting and administrative expense ratio	  	 	26.8%	  	 	26.7%	 	 	 	  	 	27.1%	  	 	28.3%	  	 	
 	  			  				 	 	  			  			  	 	
Combined ratio	  	 	91.4%	  	 	97.7%	 	 	 	  	 	91.3%	  	 	94.4%	  	 	
Annualized ROE	  	 	15.2%	  	 	8.9%	 	 	 	  	 	15.9%	  	 	12.2%	  	 	
Annualized ROE, excluding FAS 115	  	 	16.8%	  	 	9.2%	 	 	 	  	 	17.3%	  	 	12.7%	  	 	
Diluted earnings per share	  	 	 	  	 	 	 	 	 	  	 	 	  	 	 	  	 	
Income excluding net realized gains (losses)	  	$	1.04	  	$	0.53	 	 	96%	  	$	3.08	  	$	2.13	  	45%	
Net income	  	$	1.22	  	$	(0.24	)	 	NM	  	$	3.46	  	$	0.84	  	312%	
Diluted book value per ordinary share	  	$	27.76	  	$	24.37	 	 	14%	  	$	27.76	  	$	24.37	  	14%	
Diluted tangible book value per ordinary share	  	$	18.43	  	$	14.78	 	 	25%	  	$	18.43	  	$	14.78	  	25%	
Weighted average diluted ordinary shares outstanding	  	 	281.9	  	 	268.2	 	 	5%	  	 	274.2	  	 	270.2	  	1%	
Debt/ total capitalization	  	 	17.7%	  	 	21.4%	 	 	 	  	 	17.7%	  	 	21.4%	  	 	
 
Page 1

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

 	  	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	4Q-02
	 	 	3Q-02
	 	 	YTD
2003
	 	 	YTD
2002
	 	 	Full Year
2002
	 	
Consolidated Property and Casualty	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Excluding Financial Services (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	3,295	 	 	$	3,241	 	 	$	3,532	 	 	$	2,956	 	 	$	2,977	 	 	$	10,068	 	 	$	8,161	 	 	$	11,117	 	
Net premiums written	  	 	2,154	 	 	 	2,230	 	 	 	2,357	 	 	 	1,709	 	 	 	1,690	 	 	 	6,741	 	 	 	4,703	 	 	 	6,412	 	
Net premiums earned	  	 	2,146	 	 	 	2,049	 	 	 	1,815	 	 	 	1,631	 	 	 	1,495	 	 	 	6,010	 	 	 	3,914	 	 	 	5,545	 	
Losses and loss expenses	  	 	1,375	 	 	 	1,298	 	 	 	1,122	 	 	 	1,507	 	 	 	1,000	 	 	 	3,795	 	 	 	2,452	 	 	 	3,959	 	
Policy acquisition costs	  	 	321	 	 	 	315	 	 	 	281	 	 	 	260	 	 	 	232	 	 	 	917	 	 	 	612	 	 	 	872	 	
Administrative expenses	  	 	271	 	 	 	266	 	 	 	241	 	 	 	250	 	 	 	233	 	 	 	778	 	 	 	631	 	 	 	881	 	
 	  				 				 				 				 				 				 				 				
P& C Underwriting income (loss)	  	$	179	 	 	$	170	 	 	$	171	 	 	$	(386	)	 	$	30	 	 	$	520	 	 	$	219	 	 	$	(167	)	
Financial Services underwriting income	  	 	22	 	 	 	17	 	 	 	19	 	 	 	6	 	 	 	12	 	 	 	58	 	 	 	45	 	 	 	51	 	
Life underwriting income (loss) excluding investment income	  	 	(4	)	 	 	(5	)	 	 	(5	)	 	 	(8	)	 	 	(8	)	 	 	(14	)	 	 	(14	)	 	 	(22	)	
Net investment income	  	 	216	 	 	 	211	 	 	 	206	 	 	 	202	 	 	 	199	 	 	 	633	 	 	 	600	 	 	 	802	 	
Other income (expense) (2)	  	 	(3	)	 	 	1	 	 	 	(6	)	 	 	1	 	 	 	(15	)	 	 	(8	)	 	 	(22	)	 	 	(21	)	
Interest expense	  	 	45	 	 	 	43	 	 	 	45	 	 	 	47	 	 	 	48	 	 	 	133	 	 	 	146	 	 	 	193	 	
Income tax expense (benefit)	  	 	61	 	 	 	65	 	 	 	61	 	 	 	(133	)	 	 	22	 	 	 	187	 	 	 	89	 	 	 	(44	)	
 	  				 				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	304	 	 	$	286	 	 	$	279	 	 	$	(99	)	 	$	148	 	 	$	869	 	 	$	593	 	 	$	494	 	
Net realized gains (losses)	  	 	57	 	 	 	107	 	 	 	(40	)	 	 	(88	)	 	 	(235	)	 	 	124	 	 	 	(401	)	 	 	(489	)	
Tax effect of net realized gains (losses)	  	 	(6	)	 	 	(22	)	 	 	8	 	 	 	19	 	 	 	30	 	 	 	(20	)	 	 	53	 	 	 	72	 	
 	  				 				 				 				 				 				 				 				
Net income (loss)	  	$	355	 	 	$	371	 	 	$	247	 	 	$	(168	)	 	$	(57	)	 	$	973	 	 	$	245	 	 	$	77	 	
 	  				 				 				 				 				 				 				 				
% Change Versus Prior Year Period (1)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	11%	 	 	 	25%	 	 	 	36%	 	 	 	44%	 	 	 	43%	 	 	 	23%	 	 	 	31%	 	 	 	34%	 	
Net premiums written	  	 	27%	 	 	 	46%	 	 	 	59%	 	 	 	54%	 	 	 	67%	 	 	 	43%	 	 	 	39%	 	 	 	43%	 	
Net premiums earned	  	 	44%	 	 	 	55%	 	 	 	65%	 	 	 	54%	 	 	 	50%	 	 	 	54%	 	 	 	29%	 	 	 	36%	 	
Other Ratios (1)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	65%	 	 	 	69%	 	 	 	67%	 	 	 	58%	 	 	 	57%	 	 	 	67%	 	 	 	58%	 	 	 	58%	 	
Effective tax rate	  	 	17%	 	 	 	19%	 	 	 	18%	 	 	 	57%	 	 	 	13%	 	 	 	18%	 	 	 	13%	 	 	 	-10%	 	
ROE	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Annualized ROE	  	 	15.2%	 	 	 	15.6%	 	 	 	16.7%	 	 	 	-6.6%	 	 	 	8.9%	 	 	 	15.9%	 	 	 	12.2%	 	 	 	7.5%	 	
Annualized ROE, excluding FAS 115	  	 	16.8%	 	 	 	17.2%	 	 	 	18.1%	 	 	 	-7.1%	 	 	 	9.2%	 	 	 	17.3%	 	 	 	12.7%	 	 	 	7.9%	 	

(1)	Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. 	
(2)	Other income (expense) in Q2 and Q3 of 2002 includes debt prepayment expense. The tax effect in 2Q-02 was $4M and 3Q-02 was $5M. 	
 
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ACE Limited
 
Consolidated Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
ACE Limited Consolidated
 
 	  	3Q-03
	  	2Q-03
	  	1Q-03
	  	4Q-02
	  	3Q-02
	  	YTD
2003
	  	YTD
2002
	  	Full Year
2002
	
Combined ratio	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
Loss and loss expense ratio	  	64.6%	  	64.5%	  	63.4%	  	91.8%	  	71.0%	  	64.2%	  	66.1%	  	73.5%	
Policy acquisition cost ratio	  	14.4%	  	14.6%	  	14.4%	  	14.3%	  	13.4%	  	14.5%	  	14.1%	  	14.2%	
Administrative expense ratio	  	12.4%	  	12.6%	  	12.8%	  	13.7%	  	13.3%	  	12.6%	  	14.2%	  	14.0%	
 	  		  		  		  		  		  		  		  		
Combined ratio	  	91.4%	  	91.7%	  	90.6%	  	119.8%	  	97.7%	  	91.3%	  	94.4%	  	101.7%	

Consolidated Property and Casualty Excluding Financial Services (1)
 
 	  	3Q-03
	  	2Q-03
	  	1Q-03
	  	4Q-02
	 	 	3Q-02
	 	 	YTD
2003
	  	YTD
2002
	 	 	Full Year
2002
	 	
Combined ratio	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	64.0%	  	 	63.4%	  	 	61.8%	  	 	92.4%	 	 	 	66.8%	 	 	 	63.1%	  	 	62.6%	 	 	 	71.4%	 	
Policy acquisition cost ratio	  	 	15.0%	  	 	15.3%	  	 	15.5%	  	 	15.9%	 	 	 	15.6%	 	 	 	15.3%	  	 	15.6%	 	 	 	15.7%	 	
Administrative expense ratio	  	 	12.6%	  	 	13.0%	  	 	13.3%	  	 	15.4%	 	 	 	15.6%	 	 	 	12.9%	  	 	16.1%	 	 	 	15.9%	 	
 	  			  			  			  				 				 			  				 				
Combined ratio	  	 	91.6%	  	 	91.7%	  	 	90.6%	  	 	123.7%	 	 	 	98.0%	 	 	 	91.3%	  	 	94.3%	 	 	 	103.0%	 	
 	  			  			  			  				 				 			  				 				
Large losses and other items	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Catastrophe losses	  	$	42	  	$	30	  	$	—  	  	$	—  	 	 	$	100	(3)	 	$	72	  	$	100	(3)	 	$	100	(3)	
Other losses	  	 	—  	  	 	—  	  	 	—  	  	 	516	(2)	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	516	(2)	
Prior period development (4)	  	 	62	  	 	21	  	 	24	  	 	71	 	 	 	52	 	 	 	107	  	 	93	 	 	 	164	 	

(1)	Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.	
(2)	Reported in press release on January 27, 2003.	
(3)	Reported in press release on September 18, 2002. Total after tax of $90 million includes Overseas General and Global Reinsurance.	
(4)	Prior period development for the Financial Services segment was favorable $2 million in 3Q-03, favorable $9 million in 2Q-03, adverse $10 million 1Q-03 and adverse $3 million for both 4Q and 3Q 2002. Year to date 2003 is favorable $1 million compared with adverse of $27 million in 2002. Full year 2002 was adverse $30 million.	
 
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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 Sept. 30
	 	 	Nine months ended Sept. 30
	 	
 	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Numerator	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	304	 	 	$	148	 	 	$	869	 	 	$	593	 	
Perpetual preferred dividend	  	 	(11	)	 	 	—  	 	 	 	(15	)	 	 	—  	 	
Mezzanine equity dividend	  	 	—  	 	 	 	(6	)	 	 	(10	)	 	 	(19	)	
 	  				 				 				 				
Income to ordinary shares, excl. net realized gains (losses)	  	 	293	 	 	 	142	 	 	 	844	 	 	 	574	 	
Net realized gains (losses), net of income tax	  	 	51	 	 	 	(205	)	 	 	104	 	 	 	(348	)	
 	  				 				 				 				
Net income available to the holders of ordinary shares	  	$	344	 	 	$	(63	)	 	$	948	 	 	$	226	 	

Rollforward of ordinary shares	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares—beginning of period	  	 	277,755,290	 	 	 	262,247,758	 	 	 	262,679,356	 	 	 	259,861,205	 	
Mezzanine equity conversion	  	 	—  	 	 	 	—  	 	 	 	11,814,274	 	 	 	—  	 	
Issued under employee stock purchase plan	  	 	152,251	 	 	 	138,834	 	 	 	288,400	 	 	 	252,619	 	
Stock (cancelled) granted	  	 	12,631	 	 	 	(58,995	)	 	 	1,066,771	 	 	 	423,864	 	
Issued for option exercises	  	 	560,738	 	 	 	167,613	 	 	 	2,632,109	 	 	 	1,957,522	 	
 	  				 				 				 				
Ordinary shares—end of period	  	 	278,480,910	 	 	 	262,495,210	 	 	 	278,480,910	 	 	 	262,495,210	 	

Denominator	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding	  	 	275,404,544	 	 	 	260,264,791	 	 	 	268,474,758	 	 	 	259,810,039	 	
Dilutive effect of mezzanine equity	  	 	—  	 	 	 	1,614,340	 	 	 	—  	 	 	 	3,137,944	 	
Effect of other dilutive securities	  	 	6,485,692	 	 	 	6,383,066	 	 	 	5,731,326	 	 	 	7,247,792	 	
 	  				 				 				 				
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	281,890,236	 	 	 	268,262,197	 	 	 	274,206,084	 	 	 	270,195,775	 	

Basic earnings (loss) per share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	1.06	 	 	$	0.55	 	 	$	3.14	 	 	$	2.21	 	
% Change	  	 	93%	 	 	 	 	 	 	 	42%	 	 	 	 	 	
Net realized gains (losses)	  	 	0.19	 	 	 	(0.79	)	 	 	0.39	 	 	 	(1.34	)	
 	  				 				 				 				
Net income	  	$	1.25	 	 	$	(0.24	)	 	$	3.53	 	 	$	0.87	 	

Diluted earnings (loss) per share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	1.04	 	 	$	0.53	 	 	$	3.08	 	 	$	2.13	 	
% Change	  	 	96%	 	 	 	 	 	 	 	45%	 	 	 	 	 	
Net realized gains (losses)	  	 	0.18	 	 	 	(0.77	)	 	 	0.38	 	 	 	(1.29	)	
 	  				 				 				 				
Net income	  	$	1.22	 	 	$	(0.24	)	 	$	3.46	 	 	$	0.84	 	

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ACE Limited
 
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)
 
 	  	September 30
2003
	 	 	June 30
2003
	 	 	March 31
2003
	 	 	December 31
2002
	 	 	December 31
2001
	 	
Assets	  	 	(Unaudited	)	 	 	(Unaudited	)	 	 	(Unaudited	)	 	 	(Audited	)	 	 	(Audited	)	
Fixed maturities available for sale, at fair value	  	$	17,413	 	 	$	16,884	 	 	$	15,044	 	 	$	14,420	 	 	$	13,000	 	
Equity securities, at fair value	  	 	460	 	 	 	471	 	 	 	410	 	 	 	411	 	 	 	468	 	
Securities on loan, at fair value	  	 	596	 	 	 	546	 	 	 	521	 	 	 	293	 	 	 	—  	 	
Short-term investments	  	 	2,520	 	 	 	2,048	 	 	 	2,081	 	 	 	1,885	 	 	 	1,206	 	
Other investments, at fair value	  	 	665	 	 	 	661	 	 	 	685	 	 	 	652	 	 	 	591	 	
Cash	  	 	431	 	 	 	576	 	 	 	477	 	 	 	663	 	 	 	671	 	
 	  				 				 				 				 				
Total investments and cash	  	$	22,085	 	 	 	21,186	 	 	$	19,218	 	 	$	18,324	 	 	$	15,936	 	
Insurance and reinsurance balances receivable	  	 	2,821	 	 	 	3,186	 	 	 	3,228	 	 	 	2,654	 	 	 	2,522	 	
Reinsurance recoverable	  	 	14,032	 	 	 	13,891	 	 	 	14,132	 	 	 	13,991	 	 	 	11,398	 	
Deferred policy acquisition costs	  	 	998	 	 	 	984	 	 	 	915	 	 	 	832	 	 	 	679	 	
Prepaid reinsurance premiums	  	 	1,370	 	 	 	1,452	 	 	 	1,790	 	 	 	1,721	 	 	 	1,223	 	
Goodwill	  	 	2,711	 	 	 	2,711	 	 	 	2,711	 	 	 	2,717	 	 	 	2,772	 	
Deferred tax assets	  	 	1,103	 	 	 	1,075	 	 	 	1,227	 	 	 	1,288	 	 	 	1,251	 	
Other assets	  	 	2,114	 	 	 	2,141	 	 	 	2,235	 	 	 	1,924	 	 	 	1,406	 	
 	  				 				 				 				 				
Total assets	  	$	47,234	 	 	 	46,626	 	 	$	45,456	 	 	$	43,451	 	 	$	37,187	 	
 	  				 				 				 				 				
Liabilities	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unpaid losses and loss expenses	  	$	25,637	 	 	$	24,940	 	 	$	24,636	 	 	$	24,315	 	 	$	20,728	 	
Unearned premiums	  	 	6,243	 	 	 	6,394	 	 	 	6,573	 	 	 	5,586	 	 	 	3,853	 	
Future policy benefits for life and annuity contracts	  	 	479	 	 	 	470	 	 	 	459	 	 	 	442	 	 	 	383	 	
Insurance and reinsurance balances payable	  	 	1,874	 	 	 	1,989	 	 	 	1,963	 	 	 	1,870	 	 	 	1,418	 	
Contract holder deposit funds	  	 	76	 	 	 	74	 	 	 	89	 	 	 	90	 	 	 	101	 	
Securities lending collateral	  	 	608	 	 	 	561	 	 	 	533	 	 	 	301	 	 	 	—  	 	
Accounts payable, accrued expenses and other liabilities	  	 	1,601	 	 	 	1,650	 	 	 	1,820	 	 	 	1,777	 	 	 	1,567	 	
Short-term debt	  	 	146	 	 	 	146	 	 	 	146	 	 	 	146	 	 	 	495	 	
Long-term debt	  	 	1,749	 	 	 	1,749	 	 	 	1,749	 	 	 	1,749	 	 	 	1,349	 	
Trust preferred securities	  	 	475	 	 	 	475	 	 	 	475	 	 	 	475	 	 	 	875	 	
 	  				 				 				 				 				
Total liabilities	  	$	38,888	 	 	$	38,448	 	 	$	38,443	 	 	$	36,751	 	 	$	30,769	 	
 	  				 				 				 				 				
Mezzanine equity	  	$	—  	 	 	$	—  	 	 	$	311	 	 	$	311	 	 	$	311	 	
 	  				 				 				 				 				
Shareholders’ equity	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity, excl. AOCI	  	$	7,678	 	 	$	7,365	 	 	$	6,164	 	 	$	5,949	 	 	$	6,005	 	
Accumulated other comprehensive income (AOCI)	  	 	668	 	 	 	813	 	 	 	538	 	 	 	440	 	 	 	102	 	
 	  				 				 				 				 				
Total shareholders’ equity	  	$	8,346	 	 	$	8,178	 	 	$	6,702	 	 	$	6,389	 	 	$	6,107	 	
 	  				 				 				 				 				
Total liabilities, mezzanine equity and shareholders’ equity	  	$	47,234	 	 	$	46,626	 	 	$	45,456	 	 	$	43,451	 	 	$	37,187	 	
 	  				 				 				 				 				
Diluted book value per ordinary share	  	$	27.76	 	 	$	27.24	 	 	$	25.14	 	 	$	24.16	 	 	$	23.59	 	
Diluted tangible book value per ordinary share	  	$	18.43	 	 	$	17.91	 	 	$	15.72	 	 	$	14.56	 	 	$	13.99	 	
 
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ACE Limited
 
Consolidated Premiums Line of Business
(in millions of U.S. dollars)
(Unaudited)
 
ACE Limited Consolidated
 
 	  	YTD
2003
	  	% of
Total
Consolidated
	  	YTD
2002
	  	% of
Total
Consolidated
	  	% Change
YTD-03 vs.
YTD-02
	  	Full Year
2002
	
Net Premiums Written	  	 	 	  	 	  	 	 	  	 	  	 	  	 	 	
Property and all other	  	$	2,625	  	34%	  	$	2,035	  	33%	  	29%	  	$	2,518	
Casualty	  	 	3,398	  	45%	  	 	2,149	  	35%	  	58%	  	 	3,188	
Personal accident	  	 	718	  	9%	  	 	519	  	9%	  	38%	  	 	706	
 	  			  		  			  		  		  			
Total P&C	  	$	6,741	  	88%	  	$	4,703	  	77%	  	43%	  	$	6,412	
 	  			  		  			  		  		  			
Global Re—life	  	 	138	  	2%	  	 	112	  	2%	  	23%	  	 	159	
Financial guaranty	  	 	350	  	5%	  	 	291	  	5%	  	20%	  	 	387	
Financial solutions	  	 	413	  	5%	  	 	978	  	16%	  	-58%	  	 	1,110	
 	  			  		  			  		  		  			
Total Consolidated	  	$	7,642	  	100%	  	$	6,084	  	100%	  	26%	  	$	8,068	
 	  			  		  			  		  		  			
Net Premiums Earned	  	 	 	  	 	  	 	 	  	 	  	 	  	 	 	
Property and all other	  	$	2,367	  	35%	  	$	1,657	  	34%	  	43%	  	$	2,255	
Casualty	  	 	2,971	  	44%	  	 	1,748	  	36%	  	70%	  	 	2,589	
Personal accident	  	 	672	  	10%	  	 	509	  	11%	  	32%	  	 	701	
 	  			  		  			  		  		  			
Total P&C	  	$	6,010	  	89%	  	$	3,914	  	81%	  	54%	  	$	5,545	
 	  			  		  			  		  		  			
Global Re—life	  	 	136	  	2%	  	 	112	  	2%	  	21%	  	 	158	
Financial guaranty	  	 	240	  	3%	  	 	201	  	4%	  	19%	  	 	282	
Financial solutions	  	 	389	  	6%	  	 	634	  	13%	  	-39%	  	 	845	
 	  			  		  			  		  		  			
Total Consolidated	  	$	6,775	  	100%	  	$	4,861	  	100%	  	39%	  	$	6,830	

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ACE Limited
 
Consolidating Statement of Operations
 
Three months ended September 30, 2003 and 2002
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Insurance—
North
American
	 	 	Insurance—
Overseas
General
	 	 	Global
Reinsurance
	 	 	Corporate
& Other
	 	 	Consolidated
P&C
	 	 	Financial
Services
	 	 	ACE
Consolidated
	 	
September 30, 2003	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	1,819	 	 	$	1,200	 	 	$	276	 	 	$	—  	 	 	$	3,295	 	 	$	107	 	 	$	3,402	 	
Net premiums written	  	 	1,065	 	 	 	872	 	 	 	217	 	 	 	—  	 	 	 	2,154	 	 	 	105	 	 	 	2,259	 	
Net premiums earned	  	 	990	 	 	 	882	 	 	 	274	 	 	 	—  	 	 	 	2,146	 	 	 	205	 	 	 	2,351	 	
Losses and loss expenses	  	 	712	 	 	 	529	 	 	 	134	 	 	 	—  	 	 	 	1,375	 	 	 	144	 	 	 	1,519	 	
Policy acquisition costs	  	 	95	 	 	 	170	 	 	 	56	 	 	 	—  	 	 	 	321	 	 	 	17	 	 	 	338	 	
Administrative expenses	  	 	103	 	 	 	121	 	 	 	16	 	 	 	31	 	 	 	271	 	 	 	22	 	 	 	293	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	$	80	 	 	$	62	 	 	$	68	 	 	$	(31	)	 	$	179	 	 	$	22	 	 	$	201	 	
 	  				 				 				 				 				 				 				
Life underwriting income	  	 	—  	 	 	 	—  	 	 	 	6	 	 	 	—  	 	 	 	6	 	 	 	—  	 	 	 	6	 	
Net investment income—property and casualty	  	 	100	 	 	 	40	 	 	 	23	 	 	 	(6	)	 	 	157	 	 	 	49	 	 	 	206	 	
Other income (expense)	  	 	—  	 	 	 	(3	)	 	 	1	 	 	 	—  	 	 	 	(2	)	 	 	(1	)	 	 	(3	)	
Interest expense	  	 	7	 	 	 	1	 	 	 	—  	 	 	 	35	 	 	 	43	 	 	 	2	 	 	 	45	 	
Income tax expense (benefit)	  	 	48	 	 	 	12	 	 	 	3	 	 	 	(13	)	 	 	50	 	 	 	11	 	 	 	61	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	125	 	 	$	86	 	 	$	95	 	 	$	(59	)	 	$	247	 	 	$	57	 	 	$	304	 	
Net realized gains (losses)	  	 	8	 	 	 	4	 	 	 	10	 	 	 	5	 	 	 	28	 	 	 	29	 	 	 	57	 	
Tax effect of net realized gains (losses)	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(6	)	 	 	(6	)	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	133	 	 	$	90	 	 	$	105	 	 	$	(54	)	 	$	275	 	 	$	80	 	 	$	355	 	
 	  				 				 				 				 				 				 				
September 30, 2002	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	1,783	 	 	$	1,008	 	 	$	186	 	 	$	—  	 	 	$	2,977	 	 	$	493	 	 	$	3,470	 	
Net premiums written	  	 	869	 	 	 	690	 	 	 	131	 	 	 	—  	 	 	 	1,690	 	 	 	476	 	 	 	2,166	 	
Net premiums earned	  	 	654	 	 	 	647	 	 	 	194	 	 	 	—  	 	 	 	1,495	 	 	 	373	 	 	 	1,868	 	
Losses and loss expenses	  	 	453	 	 	 	446	 	 	 	101	 	 	 	—  	 	 	 	1,000	 	 	 	328	 	 	 	1,328	 	
Policy acquisition costs	  	 	55	 	 	 	140	 	 	 	37	 	 	 	—  	 	 	 	232	 	 	 	18	 	 	 	250	 	
Administrative expenses	  	 	86	 	 	 	107	 	 	 	11	 	 	 	29	 	 	 	233	 	 	 	15	 	 	 	248	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	$	60	 	 	$	(46	)	 	$	45	 	 	$	(29	)	 	$	30	 	 	$	12	 	 	$	42	 	
 	  				 				 				 				 				 				 				
Life underwriting income (loss)	  	 	—  	 	 	 	—  	 	 	 	(1	)	 	 	—  	 	 	 	(1	)	 	 	—  	 	 	 	(1	)	
Net investment income—property and casualty	  	 	101	 	 	 	28	 	 	 	20	 	 	 	(3	)	 	 	146	 	 	 	46	 	 	 	192	 	
Other income (expense)	  	 	—  	 	 	 	(1	)	 	 	1	 	 	 	(15	)	 	 	(15	)	 	 	—  	 	 	 	(15	)	
Interest expense	  	 	7	 	 	 	1	 	 	 	—  	 	 	 	37	 	 	 	45	 	 	 	3	 	 	 	48	 	
Income tax expense (benefit)	  	 	41	 	 	 	(4	)	 	 	(1	)	 	 	(21	)	 	 	15	 	 	 	7	 	 	 	22	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	113	 	 	$	(16	)	 	$	66	 	 	$	(63	)	 	$	100	 	 	$	48	 	 	$	148	 	
Net realized gains (losses)	  	 	(55	)	 	 	(21	)	 	 	(27	)	 	 	(55	)	 	 	(158	)	 	 	(77	)	 	 	(235	)	
Tax effect of net realized gains (losses)	  	 	4	 	 	 	7	 	 	 	—  	 	 	 	—  	 	 	 	11	 	 	 	19	 	 	 	30	 	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	62	 	 	$	(30	)	 	$	39	 	 	$	(118	)	 	$	(47	)	 	$	(10	)	 	$	(57	)	

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ACE Limited
 
Consolidating Statement of Operations
 
Nine months ended September 30, 2003 and 2002
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Insurance—
North
American
	 	 	Insurance—
Overseas
General
	 	 	Global
Reinsurance
	 	 	Corporate
& Other
	 	 	Consolidated
P&C
	 	 	Financial
Services
	 	 	ACE
Consolidated
	 	
September 30, 2003	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	5,131	 	 	$	3,850	 	 	$	1,087	 	 	$	—  	 	 	$	10,068	 	 	$	757	 	 	$	10,825	 	
Net premiums written	  	 	2,967	 	 	 	2,769	 	 	 	1,005	 	 	 	—  	 	 	 	6,741	 	 	 	763	 	 	 	7,504	 	
Net premiums earned	  	 	2,663	 	 	 	2,556	 	 	 	791	 	 	 	—  	 	 	 	6,010	 	 	 	629	 	 	 	6,639	 	
Losses and loss expenses	  	 	1,861	 	 	 	1,541	 	 	 	393	 	 	 	—  	 	 	 	3,795	 	 	 	466	 	 	 	4,261	 	
Policy acquisition costs	  	 	279	 	 	 	485	 	 	 	153	 	 	 	—  	 	 	 	917	 	 	 	45	 	 	 	962	 	
Administrative expenses	  	 	293	 	 	 	356	 	 	 	45	 	 	 	84	 	 	 	778	 	 	 	60	 	 	 	838	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	$	230	 	 	$	174	 	 	$	200	 	 	$	(84	)	 	$	520	 	 	$	58	 	 	$	578	 	
 	  				 				 				 				 				 				 				
Life underwriting income	  	 	—  	 	 	 	—  	 	 	 	11	 	 	 	—  	 	 	 	11	 	 	 	—  	 	 	 	11	 	
Net investment income—property and casualty	  	 	306	 	 	 	113	 	 	 	63	 	 	 	(23	)	 	 	459	 	 	 	149	 	 	 	608	 	
Other income (expense)	  	 	(6	)	 	 	(4	)	 	 	2	 	 	 	—  	 	 	 	(8	)	 	 	—  	 	 	 	(8	)	
Interest expense	  	 	22	 	 	 	2	 	 	 	—  	 	 	 	104	 	 	 	128	 	 	 	5	 	 	 	133	 	
Income tax expense (benefit)	  	 	129	 	 	 	60	 	 	 	10	 	 	 	(40	)	 	 	159	 	 	 	28	 	 	 	187	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	379	 	 	$	221	 	 	$	266	 	 	$	(171	)	 	$	695	 	 	$	174	 	 	$	869	 	
Net realized gains (losses)	  	 	15	 	 	 	(7	)	 	 	26	 	 	 	(8	)	 	 	26	 	 	 	98	 	 	 	124	 	
Tax effect of net realized gains (losses)	  	 	—  	 	 	 	5	 	 	 	1	 	 	 	—  	 	 	 	6	 	 	 	(26	)	 	 	(20	)	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	394	 	 	$	219	 	 	$	293	 	 	$	(179	)	 	$	727	 	 	$	246	 	 	$	973	 	
 	  				 				 				 				 				 				 				
September 30, 2002	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	4,476	 	 	$	2,911	 	 	$	774	 	 	$	—  	 	 	$	8,161	 	 	$	1,299	 	 	$	9,460	 	
Net premiums written	  	 	2,100	 	 	 	1,920	 	 	 	683	 	 	 	—  	 	 	 	4,703	 	 	 	1,269	 	 	 	5,972	 	
Net premiums earned	  	 	1,733	 	 	 	1,722	 	 	 	459	 	 	 	—  	 	 	 	3,914	 	 	 	835	 	 	 	4,749	 	
Losses and loss expenses	  	 	1,176	 	 	 	1,083	 	 	 	193	 	 	 	—  	 	 	 	2,452	 	 	 	690	 	 	 	3,142	 	
Policy acquisition costs	  	 	147	 	 	 	382	 	 	 	83	 	 	 	—  	 	 	 	612	 	 	 	58	 	 	 	670	 	
Administrative expenses	  	 	244	 	 	 	282	 	 	 	26	 	 	 	79	 	 	 	631	 	 	 	42	 	 	 	673	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	$	166	 	 	$	(25	)	 	$	157	 	 	$	(79	)	 	$	219	 	 	$	45	 	 	$	264	 	
 	  				 				 				 				 				 				 				
Life underwriting income	  	 	—  	 	 	 	—  	 	 	 	5	 	 	 	—  	 	 	 	5	 	 	 	—  	 	 	 	5	 	
Net investment income—property and casualty	  	 	306	 	 	 	77	 	 	 	63	 	 	 	(6	)	 	 	440	 	 	 	141	 	 	 	581	 	
Other income (expense)	  	 	—  	 	 	 	3	 	 	 	1	 	 	 	(26	)	 	 	(22	)	 	 	—  	 	 	 	(22	)	
Interest expense	  	 	24	 	 	 	2	 	 	 	1	 	 	 	109	 	 	 	136	 	 	 	10	 	 	 	146	 	
Income tax expense (benefit)	  	 	115	 	 	 	9	 	 	 	1	 	 	 	(60	)	 	 	65	 	 	 	24	 	 	 	89	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	333	 	 	$	44	 	 	$	224	 	 	$	(160	)	 	$	441	 	 	$	152	 	 	$	593	 	
Net realized gains (losses)	  	 	(107	)	 	 	(32	)	 	 	(57	)	 	 	(78	)	 	 	(274	)	 	 	(127	)	 	 	(401	)	
Tax effect of net realized gains (losses)	  	 	16	 	 	 	10	 	 	 	—  	 	 	 	—  	 	 	 	26	 	 	 	27	 	 	 	53	 	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	242	 	 	$	22	 	 	$	167	 	 	$	(238	)	 	$	193	 	 	$	52	 	 	$	245	 	

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ACE Limited
 
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Insurance-North American
 
 	  	3Q-03
	  	2Q-03
	 	 	1Q-03
	 	 	4Q-02
	 	 	3Q-02
	 	 	YTD
2003
	 	 	YTD
2002
	 	  	Full Year
2002
	 	
Gross premiums written	  	$	1,819	  	$	1,648	 	 	$	1,664	 	 	$	1,640	 	 	$	1,783	 	 	$	5,131	 	 	$	4,476	 	  	$	6,116	 	
Net premiums written	  	 	1,065	  	 	969	 	 	 	933	 	 	 	819	 	 	 	869	 	 	 	2,967	 	 	 	2,100	 	  	 	2,919	 	
Net premiums earned	  	 	990	  	 	920	 	 	 	753	 	 	 	742	 	 	 	654	 	 	 	2,663	 	 	 	1,733	 	  	 	2,475	 	
Losses and loss expenses	  	 	712	  	 	637	 	 	 	512	 	 	 	1,024	 	 	 	453	 	 	 	1,861	 	 	 	1,176	 	  	 	2,200	 	
Policy acquisition costs	  	 	95	  	 	101	 	 	 	83	 	 	 	69	 	 	 	55	 	 	 	279	 	 	 	147	 	  	 	216	 	
Administrative expenses	  	 	103	  	 	102	 	 	 	88	 	 	 	97	 	 	 	86	 	 	 	293	 	 	 	244	 	  	 	341	 	
 	  			  				 				 				 				 				 				  				
Underwriting income (loss)	  	$	80	  	$	80	 	 	$	70	 	 	$	(448	)	 	$	60	 	 	$	230	 	 	$	166	 	  	$	(282	)	
Net investment income—property and casualty	  	 	100	  	 	103	 	 	 	103	 	 	 	100	 	 	 	101	 	 	 	306	 	 	 	306	 	  	 	406	 	
Other income (expense)	  	 	—  	  	 	—  	 	 	 	(6	)	 	 	1	 	 	 	—  	 	 	 	(6	)	 	 	—  	 	  	 	1	 	
Interest expense	  	 	7	  	 	7	 	 	 	8	 	 	 	8	 	 	 	7	 	 	 	22	 	 	 	24	 	  	 	32	 	
Income tax expense (benefit)	  	 	48	  	 	42	 	 	 	39	 	 	 	(119	)	 	 	41	 	 	 	129	 	 	 	115	 	  	 	(4	)	
 	  			  				 				 				 				 				 				  				
Income (loss) excluding net realized gains (losses)	  	$	125	  	$	134	 	 	$	120	 	 	$	(236	)	 	$	113	 	 	$	379	 	 	$	333	 	  	$	97	 	
Net realized gains (losses)	  	 	8	  	 	25	 	 	 	(18	)	 	 	(92	)	 	 	(55	)	 	 	15	 	 	 	(107	)	  	 	(199	)	
Tax effect of net realized gains (losses)	  	 	—  	  	 	(3	)	 	 	3	 	 	 	27	 	 	 	4	 	 	 	—  	 	 	 	16	 	  	 	43	 	
 	  			  				 				 				 				 				 				  				
Net income (loss)	  	$	133	  	$	156	 	 	$	105	 	 	$	(301	)	 	$	62	 	 	$	394	 	 	$	242	 	  	$	(59	)	
 	  			  				 				 				 				 				 				  				
Combined ratio	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Loss and loss expense ratio	  	 	71.9%	  	 	69.2%	 	 	 	68.0%	 	 	 	137.9%	 	 	 	69.2%	 	 	 	69.9%	 	 	 	67.9%	 	  	 	88.9%	 	
Policy acquisition cost ratio	  	 	9.6%	  	 	10.9%	 	 	 	11.0%	 	 	 	9.4%	 	 	 	8.3%	 	 	 	10.4%	 	 	 	8.5%	 	  	 	8.7%	 	
Administrative expense ratio	  	 	10.4%	  	 	11.1%	 	 	 	11.6%	 	 	 	13.0%	 	 	 	13.2%	 	 	 	11.0%	 	 	 	14.0%	 	  	 	13.8%	 	
 	  			  				 				 				 				 				 				  				
Combined ratio	  	 	91.9%	  	 	91.2%	 	 	 	90.6%	 	 	 	160.3%	 	 	 	90.7%	 	 	 	91.3%	 	 	 	90.4%	 	  	 	111.4%	 	
Large losses and other items	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Large losses (before tax)	  	$	20	  	$	—  	 	 	$	—  	 	 	$	516	(1)	 	$	—  	 	 	$	20	 	 	$	—  	 	  	$	516	(1)	
% Change Versus Prior Year Period	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Gross premiums written	  	 	2%	  	 	15%	 	 	 	32%	 	 	 	49%	 	 	 	35%	 	 	 	15%	 	 	 	31%	 	  	 	35%	 	
Net premiums written	  	 	23%	  	 	35%	 	 	 	82%	 	 	 	75%	 	 	 	58%	 	 	 	41%	 	 	 	38%	 	  	 	47%	 	
Net premiums earned	  	 	51%	  	 	52%	 	 	 	59%	 	 	 	63%	 	 	 	37%	 	 	 	54%	 	 	 	27%	 	  	 	36%	 	
Other Ratios	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net premiums written/gross premiums written	  	 	59%	  	 	59%	 	 	 	56%	 	 	 	50%	 	 	 	49%	 	 	 	58%	 	 	 	47%	 	  	 	48%	 	

(1)	Reported in press release on January 27, 2003.	
 
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ACE Limited
 
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Insurance - Overseas General
 
 	  	3Q-03
	 	 	2Q-03
	  	1Q-03
	 	 	4Q-02
	 	 	3Q-02
	 	 	YTD
2003
	 	 	YTD
2002
	 	  	Full Year
2002
	 	
Gross premiums written	  	$	1,200	 	 	$	1,244	  	$	1,406	 	 	$	1,203	 	 	$	1,008	 	 	$	3,850	 	 	$	2,911	 	  	$	4,114	 	
Net premiums written	  	 	872	 	 	 	916	  	 	981	 	 	 	796	 	 	 	690	 	 	 	2,769	 	 	 	1,920	 	  	 	2,716	 	
Net premiums earned	  	 	882	 	 	 	860	  	 	814	 	 	 	671	 	 	 	647	 	 	 	2,556	 	 	 	1,722	 	  	 	2,393	 	
Losses and loss expenses	  	 	529	 	 	 	518	  	 	494	 	 	 	372	 	 	 	446	 	 	 	1,541	 	 	 	1,083	 	  	 	1,455	 	
Policy acquisition costs	  	 	170	 	 	 	163	  	 	152	 	 	 	151	 	 	 	140	 	 	 	485	 	 	 	382	 	  	 	533	 	
Administrative expenses	  	 	121	 	 	 	121	  	 	114	 	 	 	108	 	 	 	107	 	 	 	356	 	 	 	282	 	  	 	390	 	
 	  				 			  				 				 				 				 				  				
Underwriting income (loss)	  	$	62	 	 	$	58	  	$	54	 	 	$	40	 	 	$	(46	)	 	$	174	 	 	$	(25	)	  	$	15	 	
Net investment income—property and casualty	  	 	40	 	 	 	38	  	 	35	 	 	 	31	 	 	 	28	 	 	 	113	 	 	 	77	 	  	 	108	 	
Other income (expense)	  	 	(3	)	 	 	—  	  	 	(1	)	 	 	(1	)	 	 	(1	)	 	 	(4	)	 	 	3	 	  	 	2	 	
Interest expense	  	 	1	 	 	 	1	  	 	—  	 	 	 	1	 	 	 	1	 	 	 	2	 	 	 	2	 	  	 	3	 	
Income tax expense (benefit)	  	 	12	 	 	 	25	  	 	23	 	 	 	(3	)	 	 	(4	)	 	 	60	 	 	 	9	 	  	 	6	 	
 	  				 			  				 				 				 				 				  				
Income (loss) excluding net realized gains (losses)	  	$	86	 	 	$	70	  	$	65	 	 	$	72	 	 	$	(16	)	 	$	221	 	 	$	44	 	  	$	116	 	
Net realized gains (losses)	  	 	4	 	 	 	2	  	 	(13	)	 	 	(5	)	 	 	(21	)	 	 	(7	)	 	 	(32	)	  	 	(37	)	
Tax effect of net realized gains (losses)	  	 	—  	 	 	 	—  	  	 	5	 	 	 	2	 	 	 	7	 	 	 	5	 	 	 	10	 	  	 	12	 	
 	  				 			  				 				 				 				 				  				
Net income (loss)	  	$	90	 	 	$	72	  	$	57	 	 	$	69	 	 	$	(30	)	 	$	219	 	 	$	22	 	  	$	91	 	
 	  				 			  				 				 				 				 				  				
Combined ratio	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Loss and loss expense ratio	  	 	59.9%	 	 	 	60.3%	  	 	60.7%	 	 	 	55.5%	 	 	 	68.9%	 	 	 	60.3%	 	 	 	62.9%	 	  	 	60.8%	 	
Policy acquisition cost ratio	  	 	19.3%	 	 	 	18.9%	  	 	18.7%	 	 	 	22.4%	 	 	 	21.8%	 	 	 	19.0%	 	 	 	22.2%	 	  	 	22.3%	 	
Administrative expense ratio	  	 	13.7%	 	 	 	14.0%	  	 	14.0%	 	 	 	16.2%	 	 	 	16.5%	 	 	 	13.9%	 	 	 	16.3%	 	  	 	16.3%	 	
 	  				 			  				 				 				 				 				  				
Combined ratio	  	 	92.9%	 	 	 	93.2%	  	 	93.4%	 	 	 	94.1%	 	 	 	107.2%	 	 	 	93.2%	 	 	 	101.4%	 	  	 	99.4%	 	
Large losses and other items	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Large losses (before tax)	  	$	10	 	 	$	—  	  	$	—  	 	 	$	—  	 	 	$	68	(1)	 	$	10	 	 	$	68	 	  	$	68	(1)	
% Change Versus Prior Year Period	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Gross premiums written	  	 	19%	 	 	 	32%	  	 	46%	 	 	 	30%	 	 	 	50%	 	 	 	32%	 	 	 	23%	 	  	 	25%	 	
Net premiums written	  	 	26%	 	 	 	49%	  	 	60%	 	 	 	28%	 	 	 	63%	 	 	 	44%	 	 	 	25%	 	  	 	26%	 	
Net premiums earned	  	 	36%	 	 	 	52%	  	 	60%	 	 	 	31%	 	 	 	45%	 	 	 	48%	 	 	 	20%	 	  	 	23%	 	
Other Ratios	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net premiums written/gross premiums written	  	 	73%	 	 	 	74%	  	 	70%	 	 	 	66%	 	 	 	68%	 	 	 	72%	 	 	 	66%	 	  	 	66%	 	

(1)	Reported in press release on September 18, 2002. Total after tax of $90M includes $61M in Overseas General and $29M in Global Reinsurance.	
 
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[GRAPHIC APPEARS HERE]
 
ACE Limited
 
Segment Results—Consecutive Quarters—2
(in millions of U.S. dollars)
(Unaudited)
 
Insurance—Overseas General
 
 	  	3Q-03
	  	2Q-03
	  	1Q-03
	  	4Q-02
	  	3Q-02
	  	YTD
2003
	  	YTD
2002
	  	Full Year
2002
	
Gross premiums written	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	$	351	  	$	422	  	$	346	  	$	511	  	$	325	  	$	1,119	  	$	940	  	$	1,451	
ACE International	  	 	849	  	 	822	  	 	1,060	  	 	692	  	 	683	  	 	2,731	  	 	1,971	  	 	2,663	
 	  			  			  			  			  			  			  			  			
Total	  	$	1,200	  	$	1,244	  	$	1,406	  	$	1,203	  	$	1,008	  	$	3,850	  	$	2,911	  	$	4,114	
 	  			  			  			  			  			  			  			  			
Net premiums written	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	$	253	  	$	295	  	$	256	  	$	282	  	$	196	  	$	804	  	$	505	  	$	787	
ACE International	  	 	619	  	 	621	  	 	725	  	 	514	  	 	494	  	 	1,965	  	 	1,415	  	 	1,929	
 	  			  			  			  			  			  			  			  			
Total	  	$	872	  	$	916	  	$	981	  	$	796	  	$	690	  	$	2,769	  	$	1,920	  	$	2,716	
 	  			  			  			  			  			  			  			  			
Net premiums earned	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	$	244	  	$	256	  	$	248	  	$	177	  	$	181	  	$	748	  	$	485	  	$	662	
ACE International	  	 	638	  	 	604	  	 	566	  	 	494	  	 	466	  	 	1,808	  	 	1,237	  	 	1,731	
 	  			  			  			  			  			  			  			  			
Total	  	$	882	  	$	860	  	$	814	  	$	671	  	$	647	  	$	2,556	  	$	1,722	  	$	2,393	
 	  			  			  			  			  			  			  			  			
Net premiums written/gross premiums written	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	 	72.1%	  	 	69.9%	  	 	74.0%	  	 	55.2%	  	 	60.3%	  	 	71.8%	  	 	53.7%	  	 	54.2%	
ACE International	  	 	72.9%	  	 	75.5%	  	 	68.4%	  	 	74.3%	  	 	72.3%	  	 	72.0%	  	 	71.8%	  	 	72.4%	
 	  			  			  			  			  			  			  			  			
Total NPW/GPW	  	 	72.7%	  	 	73.6%	  	 	69.8%	  	 	66.2%	  	 	68.5%	  	 	71.9%	  	 	66.0%	  	 	66.0%	
 	  			  			  			  			  			  			  			  			
Loss ratio	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	 	61.2%	  	 	61.4%	  	 	61.2%	  	 	51.3%	  	 	69.7%	  	 	61.3%	  	 	62.8%	  	 	59.7%	
ACE International	  	 	59.4%	  	 	59.8%	  	 	60.4%	  	 	56.9%	  	 	68.6%	  	 	59.9%	  	 	62.9%	  	 	61.2%	
 	  			  			  			  			  			  			  			  			
Total loss ratio	  	 	59.9%	  	 	60.3%	  	 	60.7%	  	 	55.5%	  	 	68.9%	  	 	60.3%	  	 	62.9%	  	 	60.8%	
 	  			  			  			  			  			  			  			  			
Expense ratio	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	 	35.7%	  	 	35.7%	  	 	36.7%	  	 	52.1%	  	 	46.8%	  	 	36.1%	  	 	48.8%	  	 	49.6%	
ACE International	  	 	32.0%	  	 	31.7%	  	 	30.9%	  	 	33.9%	  	 	35.0%	  	 	31.6%	  	 	34.6%	  	 	34.4%	
 	  			  			  			  			  			  			  			  			
Total expense ratio	  	 	33.0%	  	 	32.9%	  	 	32.7%	  	 	38.6%	  	 	38.3%	  	 	32.9%	  	 	38.5%	  	 	38.6%	
 	  			  			  			  			  			  			  			  			
Combined ratio	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
ACE Global Markets	  	 	96.9%	  	 	97.1%	  	 	97.9%	  	 	103.4%	  	 	116.5%	  	 	97.4%	  	 	111.6%	  	 	109.3%	
ACE International	  	 	91.4%	  	 	91.5%	  	 	91.3%	  	 	90.8%	  	 	103.6%	  	 	91.5%	  	 	97.5%	  	 	95.6%	
 	  			  			  			  			  			  			  			  			
Total combined ratio	  	 	92.9%	  	 	93.2%	  	 	93.4%	  	 	94.1%	  	 	107.2%	  	 	93.2%	  	 	101.4%	  	 	99.4%	

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[GRAPHIC APPEARS HERE]
 
ACE Limited
 
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Global Reinsurance
 
 	  	3Q-03
	  	2Q-03
	  	1Q-03
	  	4Q-02
	  	3Q-02
	 	 	YTD
2003
	  	YTD
2002
	 	  	Full Year
2002
	 	
Property and casualty	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Gross premiums written	  	$	276	  	$	349	  	$	462	  	$	113	  	$	186	 	 	$	1,087	  	$	774	 	  	$	887	 	
Net premiums written	  	 	217	  	 	345	  	 	443	  	 	94	  	 	131	 	 	 	1,005	  	 	683	 	  	 	777	 	
Net premiums earned	  	 	274	  	 	269	  	 	248	  	 	218	  	 	194	 	 	 	791	  	 	459	 	  	 	677	 	
Losses and loss expenses	  	 	134	  	 	143	  	 	116	  	 	111	  	 	101	 	 	 	393	  	 	193	 	  	 	304	 	
Policy acquisition costs	  	 	56	  	 	51	  	 	46	  	 	40	  	 	37	 	 	 	153	  	 	83	 	  	 	123	 	
Administrative expenses	  	 	16	  	 	14	  	 	15	  	 	14	  	 	11	 	 	 	45	  	 	26	 	  	 	40	 	
 	  			  			  			  			  				 			  				  				
P&C underwriting income (loss)	  	$	68	  	$	61	  	$	71	  	$	53	  	$	45	 	 	$	200	  	$	157	 	  	$	210	 	
Life	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Gross premiums written	  	$	49	  	$	46	  	$	49	  	$	50	  	$	58	 	 	$	144	  	$	115	 	  	$	165	 	
Net premiums written	  	 	47	  	 	44	  	 	47	  	 	47	  	 	57	 	 	 	138	  	 	112	 	  	 	159	 	
Net premiums earned	  	 	46	  	 	42	  	 	48	  	 	46	  	 	57	 	 	 	136	  	 	112	 	  	 	158	 	
Losses and loss expenses	  	 	45	  	 	44	  	 	48	  	 	52	  	 	60	 	 	 	137	  	 	106	 	  	 	158	 	
Policy acquisition costs	  	 	5	  	 	2	  	 	4	  	 	1	  	 	3	 	 	 	11	  	 	15	 	  	 	16	 	
Administrative expenses	  	 	—  	  	 	1	  	 	1	  	 	1	  	 	2	 	 	 	2	  	 	5	 	  	 	6	 	
Net investment income	  	 	10	  	 	8	  	 	7	  	 	8	  	 	7	 	 	 	25	  	 	19	 	  	 	27	 	
 	  			  			  			  			  				 			  				  				
Life underwriting income (loss)	  	$	6	  	$	3	  	$	2	  	$	—  	  	$	(1	)	 	$	11	  	$	5	 	  	$	5	 	
Total underwriting income	  	$	74	  	$	64	  	$	73	  	$	53	  	$	44	 	 	$	211	  	$	162	 	  	$	215	 	
Net investment income—property and casualty	  	 	23	  	 	21	  	 	19	  	 	19	  	 	20	 	 	 	63	  	 	63	 	  	 	82	 	
Other income (expense)	  	 	1	  	 	—  	  	 	1	  	 	—  	  	 	1	 	 	 	2	  	 	1	 	  	 	1	 	
Interest expense	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	 	 	 	—  	  	 	1	 	  	 	1	 	
Income tax expense (benefit)	  	 	3	  	 	3	  	 	4	  	 	—  	  	 	(1	)	 	 	10	  	 	1	 	  	 	1	 	
 	  			  			  			  			  				 			  				  				
Income (loss) excluding net realized gains (losses)	  	$	95	  	$	82	  	$	89	  	$	72	  	$	66	 	 	$	266	  	$	224	 	  	$	296	 	
Net realized gains (losses)	  	 	10	  	 	13	  	 	3	  	 	—  	  	 	(27	)	 	 	26	  	 	(57	)	  	 	(57	)	
Tax effect of net realized gains (losses)	  	 	—  	  	 	1	  	 	—  	  	 	—  	  	 	—  	 	 	 	1	  	 	—  	 	  	 	—  	 	
 	  			  			  			  			  				 			  				  				
Net income (loss)	  	$	105	  	$	96	  	$	92	  	$	72	  	$	39	 	 	$	293	  	$	167	 	  	$	239	 	
 	  			  			  			  			  				 			  				  				
P&C combined ratio	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Loss and loss expense ratio	  	 	48.9%	  	 	53.1%	  	 	46.7%	  	 	51.1%	  	 	52.0%	 	 	 	49.6%	  	 	42.0%	 	  	 	44.9%	 	
Policy acquisition cost ratio	  	 	20.4%	  	 	18.8%	  	 	18.6%	  	 	18.2%	  	 	19.2%	 	 	 	19.3%	  	 	18.1%	 	  	 	18.1%	 	
Administrative expense ratio	  	 	5.7%	  	 	5.3%	  	 	6.0%	  	 	6.5%	  	 	5.2%	 	 	 	5.7%	  	 	5.6%	 	  	 	5.9%	 	
 	  			  			  			  			  				 			  				  				
P&C combined ratio	  	 	75.0%	  	 	77.2%	  	 	71.3%	  	 	75.8%	  	 	76.4%	 	 	 	74.6%	  	 	65.7%	 	  	 	68.9%	 	
Large losses and other items	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Large losses (before tax)	  	$	12	  	$	30	  	$	—  	  	$	—  	  	$	32	(1)	 	$	42	  	$	32	 	  	$	32	(1)	

(1)	Reported in press release on September 18, 2002. Total after tax of $90M million includes $61M in Overseas General and $29M in Global Reinsurance.	
 
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ACE Limited
 
Segment Results—Consecutive Quarters—2
(in millions of U.S. dollars)
(Unaudited)
 
Global Reinsurance—Property & Casualty
 
 	  	3Q-03
	  	2Q-03
	  	1Q-03
	  	4Q-02
	 	 	3Q-02
	  	YTD
2003
	  	YTD
2002
	  	Full Year
2002
	
% Change Versus Prior Year Period	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Gross premiums written	  	 	48%	  	 	63%	  	 	24%	  	 	242%	 	 	 	98%	  	 	40%	  	 	81%	  	 	93%	
Net premiums written	  	 	66%	  	 	75%	  	 	25%	  	 	422%	 	 	 	264%	  	 	47%	  	 	103%	  	 	120%	
Net premiums earned	  	 	41%	  	 	79%	  	 	116%	  	 	140%	 	 	 	177%	  	 	72%	  	 	97%	  	 	109%	
Other Ratios	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Net premiums written/gross premiums written	  	 	79%	  	 	99%	  	 	96%	  	 	83%	 	 	 	70%	  	 	92%	  	 	88%	  	 	88%	
									
Global Reinsurance—By Division	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
									
Gross premiums written	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Tempest Europe	  	$	60	  	$	97	  	$	123	  	$	34	 	 	$	36	  	$	280	  	$	196	  	$	230	
Tempest USA	  	 	147	  	 	133	  	 	100	  	 	86	 	 	 	69	  	 	380	  	 	148	  	 	234	
Tempest Bermuda	  	 	69	  	 	119	  	 	239	  	 	(7	)	 	 	81	  	 	427	  	 	430	  	 	423	
 	  			  			  			  				 			  			  			  			
Total GPW	  	$	276	  	$	349	  	$	462	  	$	113	 	 	$	186	  	$	1,087	  	$	774	  	$	887	
 	  			  			  			  				 			  			  			  			
Net premiums written	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Tempest Europe	  	$	52	  	$	94	  	$	115	  	$	18	 	 	$	27	  	$	261	  	$	164	  	$	182	
Tempest USA	  	 	144	  	 	132	  	 	99	  	 	86	 	 	 	69	  	 	375	  	 	148	  	 	234	
Tempest Bermuda	  	 	21	  	 	119	  	 	229	  	 	(10	)	 	 	35	  	 	369	  	 	371	  	 	361	
 	  			  			  			  				 			  			  			  			
Total NPW	  	$	217	  	$	345	  	$	443	  	$	94	 	 	$	131	  	$	1,005	  	$	683	  	$	777	
 	  			  			  			  				 			  			  			  			
Net premiums earned	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Tempest Europe	  	$	55	  	$	63	  	$	69	  	$	45	 	 	$	38	  	$	187	  	$	97	  	$	142	
Tempest USA	  	 	127	  	 	112	  	 	86	  	 	69	 	 	 	53	  	 	325	  	 	113	  	 	182	
Tempest Bermuda	  	 	92	  	 	94	  	 	93	  	 	104	 	 	 	103	  	 	279	  	 	249	  	 	353	
 	  			  			  			  				 			  			  			  			
Total NPE	  	$	274	  	$	269	  	$	248	  	$	218	 	 	$	194	  	$	791	  	$	459	  	$	677	
 	  			  			  			  				 			  			  			  			
Net premiums written/gross premiums written	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	
Tempest Europe	  	 	86.7%	  	 	96.9%	  	 	93.5%	  	 	52.9%	 	 	 	75.0%	  	 	93.2%	  	 	83.7%	  	 	79.1%	
Tempest USA	  	 	98.0%	  	 	99.2%	  	 	99.0%	  	 	100.0%	 	 	 	100.0%	  	 	98.7%	  	 	100.0%	  	 	100.0%	
Tempest Bermuda	  	 	30.4%	  	 	100.0%	  	 	95.8%	  	 	142.9%	 	 	 	43.2%	  	 	86.4%	  	 	86.3%	  	 	85.3%	
 	  			  			  			  				 			  			  			  			
Total NPW/GPW	  	 	78.6%	  	 	98.9%	  	 	95.9%	  	 	83.2%	 	 	 	70.4%	  	 	92.5%	  	 	88.2%	  	 	87.6%	

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ACE Limited
 
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Financial Services
 
 	  	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	4Q-02
	  	3Q-02
	 	 	YTD
2003
	 	 	YTD
2002
	 	 	Full Year
2002
	 	
Gross premiums written	  	$	107	 	 	$	118	 	 	$	532	 	 	$	238	  	$	493	 	 	$	757	 	 	$	1,299	 	 	$	1,537	 	
Net premiums written	  	 	105	 	 	 	132	 	 	 	526	 	 	 	228	  	 	476	 	 	 	763	 	 	 	1,269	 	 	 	1,497	 	
Net premiums earned	  	 	205	 	 	 	215	 	 	 	209	 	 	 	292	  	 	373	 	 	 	629	 	 	 	835	 	 	 	1,127	 	
Losses and loss expenses	  	 	144	 	 	 	161	 	 	 	161	 	 	 	257	  	 	328	 	 	 	466	 	 	 	690	 	 	 	947	 	
Policy acquisition costs	  	 	17	 	 	 	17	 	 	 	11	 	 	 	14	  	 	18	 	 	 	45	 	 	 	58	 	 	 	72	 	
Administrative expenses	  	 	22	 	 	 	20	 	 	 	18	 	 	 	15	  	 	15	 	 	 	60	 	 	 	42	 	 	 	57	 	
 	  				 				 				 			  				 				 				 				
Underwriting income (loss)	  	$	22	 	 	$	17	 	 	$	19	 	 	$	6	  	$	12	 	 	$	58	 	 	$	45	 	 	$	51	 	
Net investment income	  	 	49	 	 	 	49	 	 	 	51	 	 	 	51	  	 	46	 	 	 	149	 	 	 	141	 	 	 	192	 	
Other income	  	 	(1	)	 	 	1	 	 	 	—  	 	 	 	1	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1	 	
Interest expense	  	 	2	 	 	 	1	 	 	 	2	 	 	 	2	  	 	3	 	 	 	5	 	 	 	10	 	 	 	12	 	
Income tax expense	  	 	11	 	 	 	8	 	 	 	9	 	 	 	6	  	 	7	 	 	 	28	 	 	 	24	 	 	 	30	 	
 	  				 				 				 			  				 				 				 				
Income (loss) excluding net realized gains (losses)	  	$	57	 	 	$	58	 	 	$	59	 	 	$	50	  	$	48	 	 	$	174	 	 	$	152	 	 	$	202	 	
Net realized gains (losses)	  	 	29	 	 	 	72	 	 	 	(3	)	 	 	—  	  	 	(77	)	 	 	98	 	 	 	(127	)	 	 	(126	)	
Tax effect of net realized 
gains (losses)	  	 	(6	)	 	 	(20	)	 	 	—  	 	 	 	—  	  	 	19	 	 	 	(26	)	 	 	27	 	 	 	26	 	
 	  				 				 				 			  				 				 				 				
Net income (loss)	  	$	80	 	 	$	110	 	 	$	56	 	 	$	50	  	$	(10	)	 	$	246	 	 	$	52	 	 	$	102	 	
 	  				 				 				 			  				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	70.2%	 	 	 	74.9%	 	 	 	77.0%	 	 	 	88.2%	  	 	88.0%	 	 	 	74.0%	 	 	 	82.6%	 	 	 	84.0%	 	
Policy acquisition cost ratio	  	 	8.7%	 	 	 	7.8%	 	 	 	5.2%	 	 	 	5.0%	  	 	4.6%	 	 	 	7.2%	 	 	 	6.9%	 	 	 	6.4%	 	
Administrative expense ratio	  	 	10.6%	 	 	 	9.5%	 	 	 	8.6%	 	 	 	4.6%	  	 	4.2%	 	 	 	9.6%	 	 	 	5.1%	 	 	 	5.0%	 	
 	  				 				 				 			  				 				 				 				
Combined ratio	  	 	89.5%	 	 	 	92.2%	 	 	 	90.8%	 	 	 	97.8%	  	 	96.8%	 	 	 	90.8%	 	 	 	94.6%	 	 	 	95.4%	 	
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss portfolio transfers(1)	  	$	4	 	 	$	—  	 	 	$	—  	 	 	$	99	  	$	187	 	 	$	4	 	 	$	212	 	 	$	311	 	
% Change Versus Prior Year Period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	-78%	 	 	 	-63%	 	 	 	9%	 	 	 	-18%	  	 	28%	 	 	 	-42%	 	 	 	9%	 	 	 	4%	 	
Net premiums written	  	 	-78%	 	 	 	-58%	 	 	 	11%	 	 	 	-43%	  	 	81%	 	 	 	-40%	 	 	 	20%	 	 	 	2%	 	
Net premiums earned	  	 	-45%	 	 	 	-6%	 	 	 	-11%	 	 	 	-19%	  	 	0%	 	 	 	-25%	 	 	 	-22%	 	 	 	-21%	 	
Other Ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross 
premiums written	  	 	98%	 	 	 	112%	 	 	 	99%	 	 	 	96%	  	 	97%	 	 	 	101%	 	 	 	98%	 	 	 	97%	 	

(1)	Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued at 100% loss ratio.	
 
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ACE Limited
 
Segment Results—Consecutive Quarters—2
(in millions of U.S. dollars)
(Unaudited)
 
Financial Services
 
 	  	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	  	4Q-02
	  	3Q-02
	  	YTD
2003
	  	YTD
2002
	  	Full Year
2002
	
Gross premiums written	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	$	112	 	 	$	119	 	 	$	121	  	$	97	  	$	147	  	$	352	  	$	294	  	$	391	
Financial solutions	  	 	(5	)	 	 	(1	)	 	 	411	  	 	141	  	 	346	  	 	405	  	 	1,005	  	 	1,146	
 	  				 				 			  			  			  			  			  			
Total GPW	  	$	107	 	 	$	118	 	 	$	532	  	$	238	  	$	493	  	$	757	  	$	1,299	  	$	1,537	
 	  				 				 			  			  			  			  			  			
Net premiums written	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	$	111	 	 	$	119	 	 	$	120	  	$	96	  	$	146	  	$	350	  	$	291	  	$	387	
Financial solutions	  	 	(6	)	 	 	13	 	 	 	406	  	 	132	  	 	330	  	 	413	  	 	978	  	 	1,110	
 	  				 				 			  			  			  			  			  			
Total NPW	  	$	105	 	 	$	132	 	 	$	526	  	$	228	  	$	476	  	$	763	  	$	1,269	  	$	1,497	
 	  				 				 			  			  			  			  			  			
Net premiums earned	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	$	80	 	 	$	82	 	 	$	78	  	$	81	  	$	46	  	$	240	  	$	201	  	$	282	
Financial solutions	  	 	125	 	 	 	133	 	 	 	131	  	 	211	  	 	327	  	 	389	  	 	634	  	 	845	
 	  				 				 			  			  			  			  			  			
Total NPE	  	$	205	 	 	$	215	 	 	$	209	  	$	292	  	$	373	  	$	629	  	$	835	  	$	1,127	
 	  				 				 			  			  			  			  			  			
Loss ratio	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	 	46.4%	 	 	 	49.7%	 	 	 	50.1%	  	 	73.0%	  	 	31.2%	  	 	48.7%	  	 	52.5%	  	 	58.4%	
Financial solutions	  	 	85.4%	 	 	 	90.5%	 	 	 	92.9%	  	 	94.1%	  	 	96.0%	  	 	89.7%	  	 	92.1%	  	 	92.6%	
 	  				 				 			  			  			  			  			  			
Total loss ratio	  	 	70.2%	 	 	 	74.9%	 	 	 	77.0%	  	 	88.2%	  	 	88.0%	  	 	74.1%	  	 	82.6%	  	 	84.0%	
 	  				 				 			  			  			  			  			  			
Expense ratio	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	 	33.7%	 	 	 	35.3%	 	 	 	27.6%	  	 	17.8%	  	 	38.1%	  	 	32.3%	  	 	27.4%	  	 	24.6%	
Financial solutions	  	 	10.1%	 	 	 	6.1%	 	 	 	5.7%	  	 	6.4%	  	 	4.7%	  	 	7.3%	  	 	7.2%	  	 	7.0%	
 	  				 				 			  			  			  			  			  			
Total expense ratio	  	 	19.3%	 	 	 	17.3%	 	 	 	13.8%	  	 	9.6%	  	 	8.8%	  	 	16.8%	  	 	12.0%	  	 	11.4%	
 	  				 				 			  			  			  			  			  			
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Financial guaranty	  	 	80.1%	 	 	 	85.0%	 	 	 	77.7%	  	 	90.8%	  	 	69.3%	  	 	81.0%	  	 	79.9%	  	 	83.0%	
Financial solutions	  	 	95.5%	 	 	 	96.6%	 	 	 	98.6%	  	 	100.5%	  	 	100.7%	  	 	97.0%	  	 	99.3%	  	 	99.6%	
 	  				 				 			  			  			  			  			  			
Total combined ratio	  	 	89.5%	 	 	 	92.2%	 	 	 	90.8%	  	 	97.8%	  	 	96.8%	  	 	90.9%	  	 	94.6%	  	 	95.4%	

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ACE Limited
 
Financial Guaranty Profile
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Gross Par Written (7)
	  	Net Par Outstanding/Average Ratings
	
 	  	Three months ended
	  	Nine months ended
	  	 	
Sector
	  	September 30, 2003
	  	September 30, 2003
	  	December 31, 2002
	
	  	Par
Outstanding
	  	% of
total
	  	Par
Outstanding
	  	% of
total
	  	Par
Outstanding
	  	% of
total
	  	Average
Rating
	  	Par
Outstanding
	  	% of
total
	  	Average
Rating
	
Municipal Exposure	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	  	 	 	  	 	  	 	
Tax Backed	  	$	579	  	9%	  	$	1,611	  	12%	  	$	20,067	  	23%	  	A+	  	$	19,637	  	24%	  	A+	
Municipal Utilities	  	 	863	  	14%	  	 	1,233	  	10%	  	 	10,691	  	13%	  	A+	  	 	10,390	  	13%	  	A+	
Special Revenue	  	 	747	  	12%	  	 	1,077	  	8%	  	 	8,876	  	10%	  	A	  	 	8,596	  	10%	  	A	
Healthcare	  	 	159	  	3%	  	 	428	  	3%	  	 	5,604	  	7%	  	A+	  	 	5,798	  	7%	  	A	
Structured Municipal (1)	  	 	—  	  	0%	  	 	—  	  	0%	  	 	3,378	  	4%	  	AAA	  	 	3,523	  	4%	  	AAA	
Other Municipal (2)	  	 	273	  	4%	  	 	475	  	4%	  	 	2,523	  	3%	  	A-	  	 	2,151	  	3%	  	A-	
 	  			  		  			  		  			  		  		  			  		  		
Total Municipal	  	$	2,621	  	42%	  	$	4,824	  	37%	  	$	51,139	  	60%	  	A+	  	$	50,095	  	61%	  	A	
Non-Municipal Exposure	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	  	 	 	  	 	  	 	
Senior Layer CDO’s (3)	  	$	2,267	  	36%	  	$	3,772	  	29%	  	$	16,494	  	19%	  	AA+	  	$	12,727	  	16%	  	AA+	
Consumer Receivables (4)	  	 	584	  	9%	  	 	2,220	  	17%	  	 	8,185	  	9%	  	A	  	 	8,388	  	10%	  	A	
Single Name Corporate CDS	  	 	20	  	0%	  	 	150	  	1%	  	 	2,854	  	3%	  	A+	  	 	4,454	  	5%	  	A+	
Commercial Receivables (5)	  	 	719	  	11%	  	 	1,489	  	12%	  	 	5,079	  	6%	  	A+	  	 	3,464	  	4%	  	A+	
Other Structured Finance (6)	  	 	92	  	2%	  	 	454	  	4%	  	 	1,570	  	2%	  	A+	  	 	2,051	  	3%	  	A	
Funded Equity CDO’s (3)	  	 	—  	  	0%	  	 	8	  	0%	  	 	511	  	1%	  	NM	  	 	586	  	1%	  	NM	
 	  			  		  			  		  			  		  		  			  		  		
Total Non-Municipal	  	$	3,682	  	58%	  	$	8,093	  	63%	  	$	34,693	  	40%	  	AA-	  	$	31,670	  	39%	  	AA-	
 	  			  		  			  		  			  		  		  			  		  		
Total Exposure	  	$	6,303	  	100%	  	$	12,917	  	100%	  	$	85,832	  	100%	  	 	  	$	81,765	  	100%	  	 	

(1)	Structured Municipal: includes excess of loss reinsurance on portfolios of municipal credits where the company attached in excess of the AAA rating level.	
(2)	Other Municipal: primarily includes first mortgage bonds on investor-owned utilities and government-sponsored project finance.	
(3)	For ACE, collateralized debt obligations (CDO’s) are structured financings backed by a pool of investment grade assets. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches. Market supply and demand factors influence pricing and the amount and position in the structure where ACE chooses to participate.	
(4)	Consumer Receivables: principally includes auto loan receivables, residential mortgage-backed securities and credit card receivables.	
(5)	Commercial Receivables: principally includes equipment leases and commercial mortgage-backed securities.	
(6)	Other Structured Finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.	
(7)	Gross par approximates net par as the company is a net line writer.	
 
Note—Ratings are internally determined based on rating agency guidelines
 
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ACE Limited
 
Financial Guaranty Profile—2
(in millions of U.S. dollars)
(Unaudited)
 
Distribution by Ratings of Financial Guaranty Portfolio
 
 	  	At September 30, 2003
	
 	  	Net Par
Outstanding
	  	% of total
	
AAA	  	$	24,932	  	29%	
AA	  	 	17,422	  	20%	
A	  	 	29,353	  	34%	
BBB	  	 	12,161	  	14%	
Below investment grade	  	 	1,453	  	2%	
Funded equity	  	 	511	  	1%	
 	  			  		
Total	  	$	85,832	  	100%	

Geographic Distribution of Financial Guaranty Portfolio as of September 30, 2003

 	  	Net Par
Outstanding
	  	% of total
	
Domestic	  	 	 	  	 	
California	  	$	6,890	  	8.0%	
New York	  	 	5,472	  	6.4%	
Texas	  	 	3,188	  	3.7%	
Illinois	  	 	2,759	  	3.2%	
Florida	  	 	2,735	  	3.2%	
Pennsylvania	  	 	2,093	  	2.4%	
New Jersey	  	 	1,909	  	2.2%	
Massachusetts	  	 	1,699	  	2.0%	
Puerto Rico	  	 	1,513	  	1.8%	
Washington	  	 	1,203	  	1.4%	
Other—Muni	  	 	17,302	  	20.2%	
Other—Non Muni	  	 	32,887	  	38.3%	
 	  			  		
Total Domestic	  	$	79,650	  	92.8%	
 	  			  		
Overall Net Par Outstanding	  	 	 	  	 	
International	  	 	 	  	 	
United Kingdom	  	$	2,448	  	2.9%	
Australia	  	 	374	  	0.4%	
Italy	  	 	351	  	0.4%	
France	  	 	313	  	0.4%	
Brazil	  	 	286	  	0.3%	
Other	  	 	2,411	  	2.8%	
 	  			  		
Total International	  	$	6,182	  	7.2%	
 	  			  		
Net Par Outstanding	  	$	85,832	  	100%	

Page 17

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ACE Limited
 
Financial Services Portfolio
25 Largest Municipal Exposures
(in millions of U.S. dollars)
(Unaudited)
 
Obligor Name
	  	Net Par
In Force (1)
	  	Rating
	
California State General Obligation & Leases	  	$	913	  	BBB	
Long Island Power Authority	  	 	731	  	A-	
New Jersey State General Obligation & Leases	  	 	725	  	AA	
New York City General Obligation	  	 	696	  	A	
Denver Colorado Airport System	  	 	637	  	A	
Chicago Illinois General Obligation	  	 	595	  	A+	
Puerto Rico Electric Power Authority	  	 	555	  	A-	
Massachusetts State GO & Bay Transportation & Leases	  	 	541	  	AA-	
New York State Metro Trans Auth—Trans Revenue	  	 	539	  	A	
New York City Municipal Water Finance Authority	  	 	510	  	AA	
San Francisco California Airport	  	 	505	  	A	
New York State General Obligation & Leases	  	 	493	  	AA	
Jefferson County Alabama Sewer	  	 	491	  	A	
Energy Northwest (FKA WPPSS)	  	 	468	  	AA-	
Puerto Rico General Obligation & Leases	  	 	430	  	A-	
Houston Texas Water & Sewer System	  	 	408	  	A+	
Dade County Florida Water & Sewer System	  	 	373	  	A	
Los Angeles County Metro Trans—Sales Tax—1st	  	 	365	  	AA	
Mental Health Services Facilities—New York	  	 	323	  	AA-	
Intermountain Power Agency	  	 	320	  	A+	
Illinois State General Obligation & Leases	  	 	317	  	AA	
Chicago Illinois Public Building—Board of Education	  	 	316	  	A+	
Municipal Electric Authority of Georgia—Senior	  	 	307	  	A+	
New Jersey State Turnpike	  	 	298	  	A-	
District of Columbia General Obligation	  	 	285	  	A-	

(1)	Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company	
 
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ACE Limited
 
Financial Services Portfolio
(in millions of U.S. dollars)
(Unaudited)
 
25 Largest Asset-Backed Exposures (Non—Municipal)
 
Obligor Name
	  	Net Par
In Force
	  	Rating
	
Absolute CDO OF ABS	  	$	594	  	AAA	
Triplas CDO OF ABS	  	 	571	  	AAA	
Sears Credit Card Master Trust 2002-3 Class A—Credit Cards	  	 	550	  	AAA	
SALS 2002-6 (Super Senior)—Synthetic CDO	  	 	540	  	AAA	
Taurus 2001-06—Synthetic CDO	  	 	506	  	A+	
Bistro 2001-09—AAA Tranche—Synthetic CDO	  	 	450	  	AAA	
Dresdner 2001—1—Synthetic CDO	  	 	500	  	AAA	
Houston CDO Portfolio 2000-1	  	 	470	  	AA	
Stars 2001-3—Synthetic CDO	  	 	440	  	AAA	
Merrill Lynch Dots 4—Synthetic CDO	  	 	430	  	AAA	
Providian Gateway Master Trust—Credit Cards	  	 	422	  	BB+	
CDO ^2—CDO of CDOs	  	 	421	  	AAA	
Merrill Lynch Synthetic CDO Taurus 8	  	 	417	  	AAA	
Magrathea V—Synthetic CDO	  	 	360	  	AAA	
Lehman Sprint 2001-1 Super Senior—Synthetic CDO	  	 	352	  	AAA	
Taurus 2001-01—Synthetic CDO	  	 	347	  	AAA	
Lehman Synthetic CDO Portfolio 2000-1	  	 	320	  	AAA	
ING Equity Trust (Pilgrim Principal Protection)	  	 	308	  	AAA	
Bistro 2000-07 Class A-1—Synthetic CDO	  	 	300	  	AAA	
Halcyon Synthetic CDO	  	 	278	  	AAA	
Europa II Limited Class A1—Synthetic CDO	  	 	266	  	AAA	
EMMOCA IV Portfolio—Synthetic CDO	  	 	250	  	AA+	
Metris Master Credit Card Trust—Credit Cards	  	 	244	  	BB	
Lusitano Global Synthetic CDO Class A-2	  	 	218	  	AAA	
TIAA Commercial Real Estate CDO 2002-1 Limited	  	 	201	  	AAA	
 
Page 19

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ACE Limited
 
Financial Services Portfolio
(in millions of U.S. dollars)
(Unaudited)
 
Largest Single Name Corporate CDS
 
Obligor Name
	  	Net Par
In Force (1)
	  	Rating
	
General Electric Company	  	$	110	  	AAA	
General Motors Corporation	  	 	60	  	BBB	
ABN AMRO Bank NV	  	 	53	  	AA-	
Japan Republic Sovereign Obligation	  	 	50	  	AA-	
American International Group, Inc. (AIG)	  	 	50	  	AAA	
Fortis NV	  	 	48	  	A+	
Allianz AG	  	 	47	  	AA-	
FNMA—Fannie Mae	  	 	45	  	AAA	
France Telecom	  	 	40	  	BBB	
Merrill Lynch & Company	  	 	40	  	A+	
Deutsche Telekom AG	  	 	40	  	BBB+	
 
 	  	Gross Par
Written (2)
	  	 	
 	  	Three months
ended
	  	Nine months
ended
	  	Net Par
Outstanding
	
Rating
	  	September 30,
2003
	  		
AAA	  	$	 —  	  	$	30	  	$	558	
AA	  	 	—  	  	 	40	  	 	602	
A	  	 	20	  	 	60	  	 	1,240	
BBB	  	 	—  	  	 	20	  	 	391	
Below investment grade	  	 	—  	  	 	—  	  	 	63	
 	  			  			  			
Total	  	$	20	  	$	150	  	$	2,854	

(1)	Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company	
(2)	Gross par approximates net par as the company is a net line writer	
 
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ACE Limited
 
Financial Services Portfolio
(in millions of U.S. dollars)
(Unaudited)
 
Maturity Profile of Select Par Insured Categories
 
 	  	(Outstanding Net Par)
	
 	  	2003 (1)
	  	2004
	  	2005
	  	2006
	  	2007
	
Senior Layer CDO’s	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	16,494	  	$	16,494	  	$	16,153	  	$	13,806	  	$	11,214	
Scheduled runoff amount	  	 	—  	  	 	341	  	 	2,347	  	 	2,592	  	 	3,061	
 	  			  			  			  			  			
Ending outstanding par	  	$	16,494	  	$	16,153	  	$	13,806	  	$	11,214	  	$	8,153	
Single Name Corporate CDS	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	2,854	  	$	2,650	  	$	2,063	  	$	1,081	  	$	889	
Scheduled runoff amount	  	 	204	  	 	587	  	 	982	  	 	192	  	 	260	
 	  			  			  			  			  			
Ending outstanding par	  	$	2,650	  	$	2,063	  	$	1,081	  	$	889	  	$	629	
Funded Equity CDO’s	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	511	  	$	511	  	$	511	  	$	511	  	$	341	
Scheduled runoff amount	  	 	—  	  	 	—  	  	 	—  	  	 	170	  	 	291	
 	  			  			  			  			  			
Ending outstanding par	  	$	511	  	$	511	  	$	511	  	$	341	  	$	50	

(1)	Beginning balance as of September 30, 2003	
 
 	  	Gross Par
Written (2)
	  	Net Par
Outstanding
	
CDO’s
	  	Three months
ended
	  	Nine months
ended
	  		
Rating
	  	Sept. 30,
2003
	  		
AAA	  	$	2,267	  	$	3,750	  	$	12,619	
AA	  	 	—  	  	 	6	  	 	1,939	
A	  	 	—  	  	 	11	  	 	982	
BBB	  	 	—  	  	 	5	  	 	831	
Below investment grade	  	 	—  	  	 	—  	  	 	123	
Funded Equity	  	 	—  	  	 	8	  	 	511	
 	  			  			  			
Total	  	$	2,267	  	$	3,780	  	$	17,005	

(2)	Gross par approximates net par as the company is a net line writer	
 
Page 21

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ACE Limited
 
Loss Reserve Rollforward
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Total
	 	 	Ongoing
	 	 	Run-off (1)
	 	
 	  	Unpaid Losses
	 	 	Unpaid Losses
	 	 	Unpaid Losses
	 	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	  	Ceded
	 	  	Net
	 	
Balance at December 31, 2001	  	$	20,728	 	 	$	10,629	 	 	$	10,099	 	 	$	13,001	 	 	$	5,381	 	 	$	7,620	 	 	$	7,236	 	  	$	4,757	 	  	$	2,479	 	
Losses and loss expenses incurred	  	 	1,599	 	 	 	746	 	 	 	853	 	 	 	1,465	 	 	 	623	 	 	 	842	 	 	 	134	 	  	 	123	 	  	 	11	 	
Losses and loss expenses paid	  	 	(1,792	)	 	 	(816	)	 	 	(976	)	 	 	(1,501	)	 	 	(686	)	 	 	(815	)	 	 	(291	)	  	 	(130	)	  	 	(161	)	
Other (incl. foreign exch. revaluation)	  	 	(20	)	 	 	26	 	 	 	(46	)	 	 	(20	)	 	 	26	 	 	 	(46	)	 	 	—  	 	  	 	—  	 	  	 	—  	 	
 	  				 				 				 				 				 				 				  				  				
Balance at March 31, 2002	  	$	20,515	 	 	$	10,585	 	 	$	9,930	 	 	$	12,945	 	 	$	5,344	 	 	$	7,601	 	 	$	7,079	 	  	$	4,750	 	  	$	2,329	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	1,806	 	 	 	845	 	 	 	961	 	 	 	1,668	 	 	 	717	 	 	 	951	 	 	 	138	 	  	 	128	 	  	 	10	 	
Losses and loss expenses paid	  	 	(1,739	)	 	 	(699	)	 	 	(1,040	)	 	 	(1,434	)	 	 	(574	)	 	 	(860	)	 	 	(305	)	  	 	(125	)	  	 	(180	)	
Other (incl. foreign exch. revaluation)	  	 	79	 	 	 	26	 	 	 	53	 	 	 	79	 	 	 	26	 	 	 	53	 	 	 	—  	 	  	 	—  	 	  	 	—  	 	
 	  				 				 				 				 				 				 				  				  				
Balance at June 30, 2002	  	$	20,661	 	 	$	10,757	 	 	$	9,904	 	 	$	13,258	 	 	$	5,513	 	 	$	7,745	 	 	$	6,912	 	  	$	4,753	 	  	$	2,159	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	2,177	 	 	 	849	 	 	 	1,328	 	 	 	2,166	 	 	 	843	 	 	 	1,323	 	 	 	11	 	  	 	6	 	  	 	5	 	
Losses and loss expenses paid	  	 	(1,348	)	 	 	(586	)	 	 	(762	)	 	 	(1,173	)	 	 	(558	)	 	 	(615	)	 	 	(175	)	  	 	(28	)	  	 	(147	)	
Other (incl. foreign exch. revaluation)	  	 	151	 	 	 	11	 	 	 	140	 	 	 	151	 	 	 	11	 	 	 	140	 	 	 	—  	 	  	 	—  	 	  	 	—  	 	
 	  				 				 				 				 				 				 				  				  				
Balance at September 30, 2002	  	$	21,641	 	 	$	11,031	 	 	$	10,610	 	 	$	14,402	 	 	$	5,809	 	 	$	8,593	 	 	$	6,748	 	  	$	4,731	 	  	$	2,017	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	4,530	 	 	 	2,766	 	 	 	1,764	 	 	 	2,400	 	 	 	1,115	 	 	 	1,285	 	 	 	2,130	 	  	 	1,651	 	  	 	479	 	
Losses and loss expenses paid	  	 	(2,023	)	 	 	(851	)	 	 	(1,172	)	 	 	(1,628	)	 	 	(668	)	 	 	(960	)	 	 	(395	)	  	 	(183	)	  	 	(212	)	
Other (incl. foreign exch. revaluation)	  	 	167	 	 	 	51	 	 	 	116	 	 	 	167	 	 	 	51	 	 	 	116	 	 	 	—  	 	  	 	—  	 	  	 	—  	 	
 	  				 				 				 				 				 				 				  				  				
Balance at December 31, 2002	  	$	24,315	 	 	$	12,997	 	 	$	11,318	 	 	$	15,341	 	 	$	6,307	 	 	$	9,034	 	 	$	8,483	 	  	$	6,199	 	  	$	2,284	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	2,390	 	 	 	1,107	 	 	 	1,283	 	 	 	2,365	 	 	 	1,104	 	 	 	1,261	 	 	 	25	 	  	 	3	 	  	 	22	 	
Losses and loss expenses paid	  	 	(2,155	)	 	 	(984	)	 	 	(1,171	)	 	 	(1,910	)	 	 	(893	)	 	 	(1,017	)	 	 	(245	)	  	 	(91	)	  	 	(154	)	
Other (incl. foreign exch. revaluation)	  	 	86	 	 	 	16	 	 	 	70	 	 	 	79	 	 	 	16	 	 	 	63	 	 	 	7	 	  	 	—  	 	  	 	7	 	
 	  				 				 				 				 				 				 				  				  				
Balance at March 31, 2003	  	$	24,636	 	 	$	13,136	 	 	$	11,500	 	 	$	15,875	 	 	$	6,534	 	 	$	9,341	 	 	$	8,270	 	  	$	6,111	 	  	$	2,159	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	2,511	 	 	 	1,052	 	 	 	1,459	 	 	 	2,463	 	 	 	1,020	 	 	 	1,443	 	 	 	48	 	  	 	32	 	  	 	16	 	
Losses and loss expenses paid	  	 	(2,415	)	 	 	(1,357	)	 	 	(1,058	)	 	 	(1,964	)	 	 	(1,134	)	 	 	(830	)	 	 	(451	)	  	 	(223	)	  	 	(228	)	
Other (incl. foreign exch. revaluation)	  	 	208	 	 	 	123	 	 	 	85	 	 	 	208	 	 	 	123	 	 	 	85	 	 	 	—  	 	  	 	—  	 	  	 	—  	 	
 	  				 				 				 				 				 				 				  				  				
Balance at June 30, 2003	  	$	24,940	 	 	$	12,954	 	 	$	11,986	 	 	$	16,582	 	 	$	6,543	 	 	$	10,039	 	 	$	7,867	 	  	$	5,920	 	  	$	1,947	 	
 	  				 				 				 				 				 				 				  				  				
Losses and loss expenses incurred	  	 	2,552	 	 	 	1,033	 	 	 	1,519	 	 	 	2,472	 	 	 	977	 	 	 	1,495	 	 	 	80	 	  	 	56	 	  	 	24	 	
Losses and loss expenses paid	  	 	(1,833	)	 	 	(863	)	 	 	(970	)	 	 	(1,557	)	 	 	(663	)	 	 	(894	)	 	 	(276	)	  	 	(200	)	  	 	(76	)	
Other (incl. foreign exch. revaluation)	  	 	(22	)	 	 	(19	)	 	 	(3	)	 	 	(12	)	 	 	(19	)	 	 	7	 	 	 	(10	)	  	 	—  	 	  	 	(10	)	
 	  				 				 				 				 				 				 				  				  				
Balance at September 30, 2003	  	$	25,637	 	 	$	13,105	 	 	$	12,532	 	 	$	17,485	 	 	$	6,838	 	 	$	10,647	 	 	$	7,661	 	  	$	5,776	 	  	$	1,885	 	

(1)	The run-off reserves primarily include Brandywine group, the Commercial Insurance Service—Middle Market Worker’s Comp. reserves and the pre-1997 Westchester Specialty reserves. Prior year split between gross and ceded reserves and loss activity in ongoing and run-off categories has been revised to properly reflect intercompany reinsurance eliminations.	
 
Page 22

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ACE Limited
 
Asbestos and Environmental Reserves
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Asbestos
	 	 	Asbestos
	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross 3 year
survival ratio
	  	Gross 1 year
survival ratio
	
Balance at December 31, 2002	  	$	3,192	 	 	$	2,746	 	 	$	446	 	 	11.3x	  	12.0x	
						
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	  	 	
Losses and loss expenses paid	  	 	(44	)	 	 	(18	)	 	 	(26	)	 	 	  	 	
 	  				 				 				 	 	  	 	
Balance at March 31, 2003	  	$	3,148	 	 	$	2,728	 	 	$	420	 	 	 	  	 	
						
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	  	 	
Losses and loss expenses paid	  	 	(65	)	 	 	(26	)	 	 	(39	)	 	 	  	 	
 	  				 				 				 	 	  	 	
Balance at June 30, 2003	  	$	3,083	 	 	$	2,702	 	 	$	381	 	 	 	  	 	
						
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	  	 	
Losses and loss expenses paid	  	 	(56	)	 	 	(31	)	 	 	(25	)	 	 	  	 	
 	  				 				 				 	 	  	 	
Balance at September 30, 2003	  	$	3,027	 	 	$	2,671	 	 	$	356	 	 	 	  	 	

 	  	Environmental & Other
Latent Exposures
	 	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	
Balance at December 31, 2002	  	$	1,352	 	 	$	949	 	 	$	403	 	
				
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Losses and loss expenses paid	  	 	(45	)	 	 	(8	)	 	 	(37	)	
 	  				 				 				
Balance at March 31, 2003	  	$	1,307	 	 	$	941	 	 	$	366	 	
				
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Losses and loss expenses paid	  	 	(75	)	 	 	(24	)	 	 	(51	)	
 	  				 				 				
Balance at June 30, 2003	  	$	1,232	 	 	$	917	 	 	$	315	 	
				
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Losses and loss expenses paid	  	 	(36	)	 	 	(18	)	 	 	(18	)	
 	  				 				 				
Balance at September 30, 2003	  	$	1,196	 	 	$	899	 	 	$	297	 	

Page 23

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ACE Limited
 
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
 
Net Reinsurance Recoverable by Division
 
 	  	September 30
2003
	 	 	June 30
2003
	 	 	March 31
2003
	 	 	December 31
2002
	 	
Reinsurance recoverable on paid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
					
Active operations	  	$	863	 	 	$	869	 	 	$	950	 	 	$	951	 	
Brandywine (1)	  	 	410	 	 	 	417	 	 	 	397	 	 	 	385	 	
Westchester (2)	  	 	24	 	 	 	17	 	 	 	25	 	 	 	27	 	
 	  				 				 				 				
Total	  	$	1,297	 	 	$	1,303	 	 	$	1,372	 	 	$	1,363	 	
 	  				 				 				 				
Reinsurance recoverable on unpaid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
					
Active operations	  	$	8,299	 	 	$	7,965	 	 	$	7,997	 	 	$	7,839	 	
Brandywine (1)	  	 	4,873	 	 	 	5,044	 	 	 	5,218	 	 	 	5,237	 	
Westchester (2)	  	 	498	 	 	 	505	 	 	 	496	 	 	 	491	 	
 	  				 				 				 				
Total	  	$	13,670	 	 	$	13,514	 	 	$	13,711	 	 	$	13,567	 	
 	  				 				 				 				
Gross reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
					
Active operations	  	$	9,162	 	 	$	8,834	 	 	$	8,947	 	 	$	8,790	 	
Brandywine (1)	  	 	5,283	 	 	 	5,461	 	 	 	5,615	 	 	 	5,622	 	
Westchester (2)	  	 	522	 	 	 	522	 	 	 	521	 	 	 	518	 	
 	  				 				 				 				
Total	  	$	14,967	 	 	$	14,817	 	 	$	15,083	 	 	$	14,930	 	
 	  				 				 				 				
Bad debt reserve	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
					
Active operations	  	$	(443	)	 	$	(434	)	 	$	(449	)	 	$	(431	)	
Brandywine (1)	  	 	(463	)	 	 	(463	)	 	 	(473	)	 	 	(478	)	
Westchester (2)	  	 	(29	)	 	 	(29	)	 	 	(29	)	 	 	(30	)	
 	  				 				 				 				
Total	  	$	(935	)	 	$	(926	)	 	$	(951	)	 	$	(939	)	
 	  				 				 				 				
Net reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
					
Active operations	  	$	8,719	 	 	$	8,400	 	 	$	8,498	 	 	$	8,359	 	
Brandywine (1)	  	 	4,820	 	 	 	4,998	 	 	 	5,142	 	 	 	5,144	 	
Westchester (2)	  	 	493	 	 	 	493	 	 	 	492	 	 	 	488	 	
 	  				 				 				 				
Total	  	$	14,032	 	 	$	13,891	 	 	$	14,132	 	 	$	13,991	 	

(1)	The Company’s obligations with respect to further funding of the Brandywine run-off are limited pursuant to the Brandywine Restructuring Order under an $800 million aggregate excess of loss reinsurance agreement. (Refer to the “Asbestos and Environmental Claims” section of the “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” incorporated into our filed Form 10-K for the year ended December 31, 2002 for additional information about the order and other Company obligations.) At September 30, 2003, approximately $492 million in losses and recoverable bad debt reserves were ceded to the aggregate excess of loss reinsurance agreement leaving a remaining limit of approximately $308 million.	
(2)	As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At September 30, 2003, the remaining limit in the reinsurance cover was approximately $600 million.	
        Note:	Active operations include the run-off operations of CIS.	
 
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ACE Limited
 
Reinsurance Recoverable Analysis—2
(in millions of U.S. dollars)
(Unaudited)
 
Reinsurance Recoverable for Active Operations
 
 	  	June 30, 2003
	
Categories
	  	Recoverable
	  	Bad
Debt
	  	% of Gross
	
Top 10 reinsurers	  	$	4,054	  	$	68	  	1.7%	
Other reinsurers balances >$20 million	  	 	2,020	  	 	136	  	6.7%	
Other reinsurers balances <$20 million	  	 	780	  	 	52	  	6.7%	
Mandatory pools and government agencies	  	 	745	  	 	4	  	0.5%	
Structured settlements	  	 	274	  	 	1	  	0.4%	
Captives	  	 	695	  	 	3	  	0.4%	
Other	  	 	266	  	 	170	  	63.9%	
 	  			  			  		
Total	  	$	8,834	  	$	434	  	4.9%	

At June 30, 2003, $5.6 billion of the active operations’ recoverables were from rated reinsurers, of which 87% were rated A- or better by Standard & Poor’s. The Company held collateral of $2.1 billion, of which $1.4 billion was matched and usable against existing recoverables.
 
Top 10 Reinsurers (net of collateral)	 	Other Reinsurers Balances Greater Than $20 million (net of collateral)	
	
American International Group	 	ABB Group	 	FM Global Group	
AXA	 	AIOI Insurance	 	Groupama	
Berkshire Hathaway Insurance Group	 	Allianz Group	 	Independence Blue Cross (Amerihealth)	
 	 	 	 	ING - Internationale Nederlanden Group	
GE Global Insurance Group (Employers Re)	 	Arch Capital	 	Liberty Mutual Insurance Companies	
Hannover	 	AVIVA	 	Nisshin Fire and Marine	
Lloyd’s of London	 	Chubb Insurance Group	 	Overseas Partners Ltd.	
Munich Re	 	CIGNA	 	PMA Capital Insurance Company	
St. Paul Companies	 	CNA Insurance Companies	 	QBE Insurance	
Swiss Re Group	 	Converium Group	 	RenaissanceRe Holdings Ltd	
XL Capital Group	 	DaimlerChrysler Group	 	Royal & Sun Alliance Insurance Group plc	
 	 	Dorinco Reinsurance Co.	 	SCOR Group	
 	 	Electric Insurance Company	 	Toa Reinsurance Company	
 	 	EQUITAS	 	Trenwick Group	
 	 	Everest Re Group	 	WR Berkley Corp	
 	 	Fairfax Financial	 	Zurich Financial Services Group	
 
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ACE Limited
 
Reinsurance Recoverable Analysis—3
(in millions of U.S. dollars)
(Unaudited)
 
Consolidated Reinsurance Recoverable
 
 	  	June 30, 2003
	
Categories
	  	Recoverable
	  	Bad
Debt
	  	% of Gross
	
Top 10 reinsurers	  	$	7,728	  	$	93	  	1.2%	
Other reinsurers balances >$20 million	  	 	3,139	  	 	233	  	7.4%	
Other reinsurers balances <$20 million	  	 	985	  	 	70	  	7.1%	
Mandatory pools and government agencies	  	 	777	  	 	4	  	0.5%	
Structured settlements	  	 	651	  	 	3	  	0.5%	
Captives	  	 	720	  	 	5	  	0.7%	
Other	  	 	817	  	 	518	  	63.4%	
 	  			  			  		
Total	  	$	14,817	  	$	926	  	6.2%	

At June 30, 2003, $10.0 billion of consolidated recoverables were from rated reinsurers, of which 91% were rated A- or better by Standard & Poor’s.
 
Top 10 Reinsurers (net of collateral)	 	Other Reinsurers Balances Greater Than $20 million (net of collateral)	
	
American International Group	 	ABB Group	 	Independence Blue Cross (Amerihealth)	
AXA	 	AIOI Insurance	 	ING—Internationale Nederlanden Group	
Berkshire Hathaway Insurance Group	 	Allianz Group	 	IRB—Brasil Resseguros S.A.	
EQUITAS	 	Arch Capital	 	Liberty Mutual Insurance Companies	
GE Global Insurance Group	 	AVIVA	 	Markel Corporation Group	
Hannover	 	Chubb Insurance Group	 	Nisshin Fire and Marine	
Lloyd’s of London	 	CIGNA	 	Overseas Partners Ltd.	
Munich Re	 	CNA Insurance Companies	 	PMA Capital Insurance Company	
St. Paul Companies	 	Converium Group	 	QBE Insurance	
Swiss Re Group	 	DaimlerChrysler Group	 	RenaissanceRe Holdings Ltd	
 	 	Dominion Ins. Co. Ltd.	 	Royal & Sun Alliance Insurance Group plc	
 	 	Dorinco Reinsurance Co.	 	SCOR Group	
 	 	Electric Insurance Company	 	Sompo Japan	
 	 	Everest Re Group	 	Toa Reinsurance Company	
 	 	Fairfax Financial	 	Travelers Property Casualty Group	
 	 	FM Global Group	 	Trenwick Group	
 	 	Gerling Group	 	White Mountains Insurance Group	
 	 	Great American P&C
Insurance Companies	 	WR Berkley Corp	
 	 	Groupama	 	XL Capital Group	
 	 	Hartford Insurance Group	 	Zurich Financial Services Group	
 
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ACE Limited
 
Reinsurance Recoverable Analysis—4
(in millions of U.S. dollars)
(Unaudited)
 
Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses
 
 	  	General
Collections (1)
	  	Other (2)
	  	Total
	
Gross balance at December 31, 2002	  	$	848	  	$	515	  	$	1,363	
Bad debt reserve at 12/31/02	  	 	43	  	 	335	  	 	378	
% of gross	  	 	5.1%	  	 	65.0%	  	 	27.7%	
 	  			  			  			
Net balance at December 31, 2002	  	 	805	  	 	180	  	 	985	
				
Gross balance at March 31, 2003	  	$	848	  	$	524	  	$	1,372	
Bad debt reserve at 3/31/03	  	 	54	  	 	333	  	 	387	
% of gross	  	 	6.4%	  	 	63.5%	  	 	28.2%	
 	  			  			  			
Net balance at March 31, 2003	  	 	794	  	 	191	  	 	985	
				
Gross balance at June 30, 2003	  	$	795	  	$	508	  	$	1,303	
Bad debt reserve at 6/30/03	  	 	51	  	 	327	  	 	378	
% of gross	  	 	6.4%	  	 	64.4%	  	 	29.0%	
 	  			  			  			
Net balance at June 30, 2003	  	 	744	  	 	181	  	 	925	
				
Gross balance at September 30, 2003	  	$	765	  	$	532	  	$	1,297	
Bad debt reserve at 9/30/03	  	 	46	  	 	339	  	 	385	
% of gross	  	 	6.0%	  	 	63.7%	  	 	29.7%	
 	  			  			  			
Net balance at September 30, 2003	  	$	719	  	$	193	  	$	912	

(1)	General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or credit issues. We provide bad debt reserves based primarily on the application of historical loss.	
(2)	Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.	
 
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ACE Limited
 
Investment Portfolio—1
(in millions of U.S. dollars)
(Unaudited)
 
 	  	September 30
2003
	  	June 30
2003
	  	March 31
2003
	  	December 31
2002
	
Market Value	  	 	 	  	 	 	  	 	 	  	 	 	
Fixed maturities	  	$	17,413	  	$	16,884	  	$	15,044	  	$	14,420	
Securities on loan	  	 	596	  	 	546	  	 	521	  	 	293	
Short-term investments	  	 	2,520	  	 	2,048	  	 	2,081	  	 	1,885	
Cash	  	 	431	  	 	576	  	 	477	  	 	663	
 	  			  			  			  			
Total	  	$	20,960	  	$	20,054	  	$	18,123	  	$	17,261	
 	  			  			  			  			
Asset Allocation by Market Value	  	 	 	  	 	 	  	 	 	  	 	 	
Treasury	  	$	1,010	  	$	886	  	$	859	  	$	842	
Agency	  	 	1,170	  	 	1,383	  	 	1,074	  	 	973	
Corporate	  	 	7,718	  	 	7,796	  	 	7,117	  	 	6,459	
Mortgage-backed securities	  	 	4,235	  	 	3,825	  	 	3,415	  	 	3,302	
Asset-backed securities	  	 	519	  	 	439	  	 	338	  	 	352	
Municipal	  	 	1,329	  	 	1,346	  	 	1,220	  	 	1,201	
Non-US	  	 	2,028	  	 	1,755	  	 	1,542	  	 	1,584	
Cash & cash equivalent	  	 	2,951	  	 	2,624	  	 	2,558	  	 	2,548	
 	  			  			  			  			
Total	  	$	20,960	  	$	20,054	  	$	18,123	  	$	17,261	
 	  			  			  			  			
Credit Quality by Market Value	  	 	 	  	 	 	  	 	 	  	 	 	
AAA	  	$	10,376	  	$	9,841	  	$	8,808	  	$	8,566	
AA	  	 	3,661	  	 	3,623	  	 	3,265	  	 	2,880	
A	  	 	3,366	  	 	3,162	  	 	3,027	  	 	2,920	
BBB	  	 	1,742	  	 	1,592	  	 	1,464	  	 	1,314	
BB	  	 	764	  	 	782	  	 	697	  	 	662	
B	  	 	973	  	 	939	  	 	791	  	 	843	
Other	  	 	78	  	 	115	  	 	71	  	 	76	
 	  			  			  			  			
Total	  	$	20,960	  	$	20,054	  	$	18,123	  	$	17,261	
 	  			  			  			  			
Cost/Amortized Cost	  	 	 	  	 	 	  	 	 	  	 	 	
Fixed maturities	  	$	16,713	  	$	15,974	  	$	14,370	  	$	13,791	
Securities on loan	  	 	549	  	 	498	  	 	494	  	 	286	
Short term investments	  	 	2,520	  	 	2,048	  	 	2,081	  	 	1,885	
Cash	  	 	431	  	 	576	  	 	477	  	 	663	
 	  			  			  			  			
Subtotal	  	 	20,213	  	 	19,096	  	 	17,422	  	 	16,625	
Equity securities	  	 	371	  	 	400	  	 	414	  	 	442	
Other investments	  	 	625	  	 	626	  	 	657	  	 	622	
 	  			  			  			  			
Total	  	$	21,209	  	$	20,122	  	$	18,493	  	$	17,689	
 	  			  			  			  			
Avg. duration of fixed maturities, adj. for int. rate swaps	  	 	3.4 years	  	 	3.2 years	  	 	3.1 years	  	 	3.1 years	
Avg. market yield of fixed maturities	  	 	4.0%	  	 	3.8%	  	 	4.2%	  	 	4.4%	
Avg. credit quality	  	 	AA	  	 	AA	  	 	AA	  	 	AA	
 
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ACE Limited
Investment Portfolio—2
(in millions of U.S. dollars)
(Unaudited)
Investment portfolio
 
Top 10 Exposures—Fixed Maturity Investments and Single Name Credit Default Swaps
 
 	  	September 30, 2003
	
General Electric	  	$	293	
General Motors	  	 	192	
Citigroup Inc	  	 	189	
Verizon Communications	  	 	123	
AIG	  	 	117	
HSBC Holdings Plc	  	 	110	
Ford Motor Co	  	 	104	
Goldman Sachs Group	  	 	97	
Morgan Stanley	  	 	95	
Merrill Lynch	  	 	86	
 
 	  	June 30, 2003
	
General Electric	  	$	289	
General Motors	  	 	199	
Citigroup Inc	  	 	173	
Verizon Communications	  	 	141	
HSBC Holdings Plc	  	 	119	
AIG	  	 	118	
Merrill Lynch	  	 	116	
Goldman Sachs Group	  	 	103	
Morgan Stanley	  	 	102	
Ford Motor Co	  	 	101	
 
 	  	March 31, 2003
	
General Electric	  	$	287	
General Motors	  	 	170	
Citigroup Inc	  	 	168	
Verizon Communications	  	 	143	
AIG	  	 	118	
Ford Motor Co	  	 	113	
Merrill Lynch	  	 	110	
Morgan Stanley	  	 	108	
Goldman Sachs Group	  	 	101	
HSBC Holdings Plc	  	 	100	
 
 	  	December 31, 2002
	
General Electric	  	$	258	
General Motors	  	 	171	
Citigroup Inc	  	 	154	
Verizon Communications	  	 	127	
AIG	  	 	123	
Ford Motor Co	  	 	123	
Bank of America	  	 	119	
Wachovia Corp	  	 	106	
Wells Fargo	  	 	105	
JP Morgan Chase	  	 	105	
 
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ACE Limited
Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)
 
 	  	Three months ended September 30, 2003
	 	 	Nine months ended September 30, 2003
	 	
 	  	Net Realized
Gains (Losses)
(1)
	 	 	Net Unrealized
Gains (Losses)
	 	 	Net
Impact
	 	 	Net Realized
Gains (Losses)
(1)
	 	 	Net Unrealized
Gains (Losses)
	 	 	Net
Impact
	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	16	 	 	$	(220	)	 	$	(204	)	 	$	77	 	 	$	90	 	 	$	167	 	
Interest rate swaps	  	 	5	 	 	 	—  	 	 	 	5	 	 	 	(9	)	 	 	—  	 	 	 	(9	)	
Equity securities	  	 	1	 	 	 	27	 	 	 	28	 	 	 	(53	)	 	 	140	 	 	 	87	 	
Equity and fixed income derivatives	  	 	8	 	 	 	—  	 	 	 	8	 	 	 	28	 	 	 	—  	 	 	 	28	 	
Foreign exchange gains (losses)	  	 	3	 	 	 	—  	 	 	 	3	 	 	 	18	 	 	 	—  	 	 	 	18	 	
Other	  	 	(2	)	 	 	4	 	 	 	2	 	 	 	(13	)	 	 	9	 	 	 	(4	)	
 	  				 				 				 				 				 				
Total inv. portfolio gains (losses)	  	$	31	 	 	$	(189	)	 	$	(158	)	 	$	48	 	 	$	239	 	 	$	287	 	
Credit default swaps (FAS 133 adjustment)	  	 	26	 	 	 	—  	 	 	 	26	 	 	 	76	 	 	 	—  	 	 	 	76	 	
 	  				 				 				 				 				 				
Total gains (losses)	  	$	57	 	 	$	(189	)	 	$	(132	)	 	$	124	 	 	$	239	 	 	$	363	 	
Income tax (expense) benefit	  	 	(6	)	 	 	48	 	 	 	42	 	 	 	(20	)	 	 	(28	)	 	 	(48	)	
 	  				 				 				 				 				 				
Net gains (losses)	  	$	51	 	 	$	(141	)	 	$	(90	)	 	$	104	 	 	$	211	 	 	$	315	 	

(1)	The quarter includes impairments of $6M for fixed maturities and $7M for equities and $4M for other. Year to date includes impairments of $25M for fixed maturities and $61M for equities and $20M for other.	
 
 	  	Three months ended September 30, 2002
	 	 	Nine months ended September 30, 2002
	 	
 	  	Net Realized
Gains (Losses)
(2)
	 	 	Net Unrealized
Gains (Losses)
	 	 	Net
Impact
	 	 	Net Realized
Gains (Losses)
(2)
	 	 	Net Unrealized
Gains (Losses)
	 	 	Net
Impact
	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	(16	)	 	$	282	 	 	$	266	 	 	$	(54	)	 	$	606	 	 	$	552	 	
Interest rate swaps	  	 	(56	)	 	 	—  	 	 	 	(56	)	 	 	(79	)	 	 	—  	 	 	 	(79	)	
Equity securities	  	 	(55	)	 	 	(55	)	 	 	(110	)	 	 	(55	)	 	 	(119	)	 	 	(174	)	
Equity and fixed income derivatives	  	 	(57	)	 	 	—  	 	 	 	(57	)	 	 	(118	)	 	 	—  	 	 	 	(118	)	
Foreign exchange gains (losses)	  	 	(2	)	 	 	—  	 	 	 	(2	)	 	 	(1	)	 	 	—  	 	 	 	(1	)	
Other	  	 	2	 	 	 	(1	)	 	 	1	 	 	 	3	 	 	 	(8	)	 	 	(5	)	
 	  				 				 				 				 				 				
Total inv. portfolio gains (losses)	  	$	(184	)	 	$	226	 	 	$	42	 	 	$	(304	)	 	$	479	 	 	$	175	 	
Credit default swaps (FAS 133 adjustment)	  	 	(51	)	 	 	—  	 	 	 	(51	)	 	 	(97	)	 	 	—  	 	 	 	(97	)	
 	  				 				 				 				 				 				
Total gains (losses)	  	$	(235	)	 	$	226	 	 	$	(9	)	 	$	(401	)	 	$	479	 	 	$	78	 	
Income tax (expense) benefit	  	 	30	 	 	 	(66	)	 	 	(36	)	 	 	53	 	 	 	(128	)	 	 	(75	)	
 	  				 				 				 				 				 				
Net gains (losses)	  	$	(205	)	 	$	160	 	 	$	(45	)	 	$	(348	)	 	$	351	 	 	$	3	 	

(2)	The quarter includes impairments of $33M for fixed maturities and $53M for equities. Year to date includes impairments of $76M for fixed maturities and $54M for equities.	
 
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ACE Limited
Capital Structure
(in millions of U.S. dollars)
 
 	  	September 30
2003
	 	 	June 30
2003
	 	 	March 31
2003
	 	 	December 31
2002
	 	 	December 31
2001
	 	
Total short-term debt	  	$	146	 	 	$	146	 	 	$	146	 	 	$	146	 	 	$	495	 	
Total long-term debt (1)	  	 	1,749	 	 	 	1,749	 	 	 	1,749	 	 	 	1,749	 	 	 	1,349	 	
 	  				 				 				 				 				
Total debt	  	$	1,895	 	 	$	1,895	 	 	$	1,895	 	 	$	1,895	 	 	$	1,844	 	
 	  				 				 				 				 				
Total trust preferreds (2)	  	$	475	 	 	$	475	 	 	$	475	 	 	$	475	 	 	$	875	 	
 	  				 				 				 				 				
Mezzanine equity (3)	  	$	—  	 	 	$	—  	 	 	$	311	 	 	$	311	 	 	$	311	 	
Perpetual preferred (4)	  	$	557	 	 	$	557	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	
Ordinary shareholders’ equity	  	 	7,789	 	 	 	7,621	 	 	 	6,702	 	 	 	6,389	 	 	 	6,107	 	
Total shareholders’ equity	  	$	8,346	 	 	$	8,178	 	 	$	6,702	 	 	$	6,389	 	 	$	6,107	 	
 	  				 				 				 				 				
Total capitalization	  	$	10,716	 	 	$	10,548	 	 	$	9,383	 	 	$	9,070	 	 	$	9,137	 	
Tangible shareholders’ equity (5)	  	$	5,635	 	 	$	5,467	 	 	$	3,991	 	 	$	3,672	 	 	$	3,335	 	
Leverage ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Debt/ total capitalization	  	 	17.7	%	 	 	18.0	%	 	 	20.2	%	 	 	20.9	%	 	 	20.2	%	
Debt plus trust preferreds/ total capitalization	  	 	22.1	%	 	 	22.5	%	 	 	25.3	%	 	 	26.1	%	 	 	29.8	%	
Debt/ tangible equity	  	 	33.6	%	 	 	34.7	%	 	 	47.5	%	 	 	51.6	%	 	 	55.3	%	
Debt plus trust preferreds and mezzanine equity/ tangible equity	  	 	42.1	%	 	 	43.4	%	 	 	67.2	%	 	 	73.0	%	 	 	90.9	%	
Debt plus total preferred stock/ total capitalization	  	 	27.3	%	 	 	27.7	%	 	 	25.3	%	 	 	26.1	%	 	 	29.8	%	

(1)	$50 million of ACE INA subordinated notes due 2009 was repaid in both the second and third quarters of 2002. An additional $500 million of Senior Debt was issued by ACE Limited in March 2002.	
(2)	$400 million of ACE INA Rhino Preferred Securities due 2002 was repaid in the second and third quarters of 2002.	
(3)	The FELINE PRIDES converted in the second quarter of 2003.	
(4)	Preferred shares $575 million, net of issuance costs $18 million.	
(5)	Tangible equity is equal to shareholders’ equity less goodwill.	
 
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ACE Limited
Non-GAAP Financial Measures and Comprehensive Income
(in millions of U.S. dollars)
(Unaudited)
 
Regulation G—Non-GAAP Financial Measures
 
In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. A reconciliation of book value per share to diluted book value per ordinary share is provided on page 33. The following non-GAAP measure is a common performance measurement and is defined as net income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments. 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) on investments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).
 
 	  	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	4Q-02
	 	 	3Q-02
	 	 	YTD
2003
	 	 	YTD
2002
	 	  	Full Year
2002
	 	
Net income (loss), as reported	  	$	355	 	 	$	371	 	 	$	247	 	 	$	(168	)	 	$	(57	)	 	$	973	 	 	$	245	 	  	$	77	 	
Net realized gains (losses)	  	 	57	 	 	 	107	 	 	 	(40	)	 	 	(88	)	 	 	(235	)	 	 	124	 	 	 	(401	)	  	 	(489	)	
Tax effect of net realized gains (losses)	  	 	(6	)	 	 	(22	)	 	 	8	 	 	 	19	 	 	 	30	 	 	 	(20	)	 	 	53	 	  	 	72	 	
 	  				 				 				 				 				 				 				  				
Income (loss) excluding net realized gains (losses) and the cumulative effect of adopting a new accounting standard	  	$	304	 	 	$	286	 	 	$	279	 	 	$	(99	)	 	$	148	 	 	$	869	 	 	$	593	 	  	$	494	 	
 	  				 				 				 				 				 				 				  				
Consolidated Statement of Comprehensive Income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net income (loss)	  	$	355	 	 	$	371	 	 	$	247	 	 	$	(168	)	 	$	(57	)	 	$	973	 	 	$	245	 	  	$	77	 	
Net unrealized appreciation (depreciation) on investments	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Unrealized appreciation (depreciation) on investments	  	 	(165	)	 	 	354	 	 	 	112	 	 	 	131	 	 	 	198	 	 	 	301	 	 	 	227	 	  	 	358	 	
Reclassification adjustment for net realized gains (losses) included in net income	  	 	(24	)	 	 	(14	)	 	 	(24	)	 	 	55	 	 	 	28	 	 	 	(62	)	 	 	43	 	  	 	98	 	
Cumulative translation adjustment	  	 	(1	)	 	 	57	 	 	 	26	 	 	 	(4	)	 	 	4	 	 	 	82	 	 	 	4	 	  	 	—  	 	
Minimum pension liability adjustment	  	 	(3	)	 	 	(59	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(62	)	 	 	—  	 	  	 	—  	 	
Income tax (expense) benefit related to other comprehensive income items	  	 	48	 	 	 	(63	)	 	 	(16	)	 	 	(27	)	 	 	(69	)	 	 	(31	)	 	 	(91	)	  	 	(118	)	
 	  				 				 				 				 				 				 				  				
Other comprehensive income (loss)	  	 	(145	)	 	 	275	 	 	 	98	 	 	 	155	 	 	 	161	 	 	 	228	 	 	 	183	 	  	 	338	 	
 	  				 				 				 				 				 				 				  				
Comprehensive income (loss)	  	$	210	 	 	$	646	 	 	$	345	 	 	$	(13	)	 	$	104	 	 	$	1,201	 	 	$	428	 	  	$	415	 	

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ACE Limited
 
Diluted Book Value per Ordinary Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
 
Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share
 
 	  	September 30
2003
	 	 	June 30 2003
	 	 	March 30 2003
	  	December 31
2002
	
Shareholders’ equity	  	$	8,346	 	 	$	8,178	 	 	$	6,702	  	$	6,389	
Net proceeds from assumed conversions of options	  	 	277	 	 	 	291	 	 	 	226	  	 	138	
Proceeds from issuance of preferred shares	  	 	(557	)	 	 	(557	)	 	 	—  	  	 	—  	
Conversion of mezzanine equity	  	 	—  	 	 	 	—  	 	 	 	311	  	 	311	
 	  				 				 			  			
Numerator for diluted book value per share calculation	  	 	8,066	 	 	 	7,912	 	 	 	7,239	  	 	6,838	
Less: goodwill	  	 	2,711	 	 	 	2,711	 	 	 	2,711	  	 	2,717	
 	  				 				 			  			
Numerator for diluted tangible book value per share	  	$	5,355	 	 	$	5,201	 	 	$	4,528	  	$	4,121	
 	  				 				 			  			
Ordinary shares outstanding—end of period	  	 	278,480,910	 	 	 	277,755,290	 	 	 	264,491,819	  	 	262,679,356	
Shares issued from assumed conversions of options	  	 	12,028,816	 	 	 	12,669,243	 	 	 	11,697,607	  	 	8,560,131	
Shares issued on conversion of mezzanine equity	  	 	—  	 	 	 	—  	 	 	 	11,814,373	  	 	11,814,373	
 	  				 				 			  			
Denominator for diluted and diluted tangible book value	  	 	290,509,726	 	 	 	290,424,533	 	 	 	288,003,799	  	 	283,053,860	
 	  				 				 			  			
Book value per ordinary share	  	$	27.97	 	 	$	27.44	 	 	$	25.34	  	$	24.32	
Diluted book value per ordinary share	  	$	27.76	 	 	$	27.24	 	 	$	25.14	  	$	24.16	
Diluted tangible book value per ordinary share	  	$	18.43	 	 	$	17.91	 	 	$	15.72	  	$	14.56	
 
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ACE Limited
 
Statutory Accounting Principals to GAAP Reconciliation
(in millions of U.S. dollars)
(Unaudited)
 
Reconciliation of Reinsurance Recoverable
 
A significant amount of detail on a large portion of our reinsurance recoverables are disclosed in our US statutory annual reports. The following is a reconciliation of the amount reported in these reports to our total recoverable as of December 31, 2002 reported for GAAP purposes:
 
Total amounts reported for statutory purposes	  	$	8,611	 	
Less: the portion of the total balance that is intercompany and therefore eliminated for GAAP purposes	  	 	(2,732	)	
Plus: amounts ceded to NICO which are not reported as reinsurance recoverables for statutory purposes	  	 	2,767	 	
Plus: the amount of reserve and recoverable discounting included for statutory purposes which is added back for GAAP purposes	  	 	1,701	 	
 	  				
Total GAAP recoverables disclosed in US statutory reports	  	 	10,347	 	
Structured settlements	  	 	730	 	
Other legal entities (1)	  	 	3,853	 	
 	  				
Total amounts reported for GAAP purposes (2)	  	$	14,930	 	
Percentage disclosed in detail in US statutory annual reports	  	 	69	%	

(1)	Not subject to US statutory reporting requirements	
(2)	The variance between the Statutory and GAAP balance relates to differences in accounting rules. Statutory rules allow the inclusion of affiliated balances, and the discounting of certain reserves and related recoverables. The statutory balance also excludes retroactive reinsurance contracts (NICO).	
 
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ACE Limited
Glossary
 
Annualized ROE:	  	Annualized return on ordinary shareholders’ equity income (loss) excluding net realized gains (losses) less perpetual preferred and mezzanine equity dividend divided by average ordinary shareholders’ equity for the period. To annualize a quarterly rate multiply by four.	
		
Combined ratio:	  	The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial services operations.	
		
Diluted book value per ordinary share:	  	Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.	
		
Diluted tangible book value per ordinary share:	  	Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued.	
		
Effective tax rate:	  	Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).	
		
FAS 115:	  	Unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity.	
		
Life underwriting income:	  	Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses.	
		
NM:	  	Not meaningful.	
		
Return on ordinary shareholders’ equity (ROE):	  	Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shareholders’ equity.	
		
Ordinary shareholders’ equity:	  	Shareholders’ equity less perpetual preferred shares.	
		
Property and casualty combined ratios:	  	Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios exclude life reinsurance business and financial services segment.	
		
Tangible equity:	  	Shareholders’ equity less goodwill.	
		
Total capitalization:	  	Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders’ equity.	
 
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