Document And Entity Information

3 Months Ended

Mar. 31, 2012

Apr. 18, 2012

Document And Entity Information [Abstract]

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Mar. 31, 2012

Entity Registration Name

ACE Ltd

Entity Central Index Key

0000896159

Current Fiscal Year End Date

--12-31

Document Fiscal Year Focus

2012

Document Fiscal Period Focus

Q1

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

338,691,622

Consolidated Balance Sheets (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Assets

Fixed maturities available for sale, at fair value (amortized cost - $41,661 and $40,450) (includes hybrid financial instruments of $400 and $357)

$ 43,468

$ 41,967

Fixed maturities held to maturity, at amortized cost (fair value - $8,348 and $8,605)

8,117

8,447

Equity securities, at fair value (cost - $662 and $671)

679

647

Short-term investments, at fair value and amortized cost

2,099

2,301

Other investments (cost - $2,221 and $2,112)

2,429

2,314

Total investments

56,792

55,676

Cash

715

614

Securities lending collateral

2,204

1,375

Accrued investment income

561

547

Insurance and reinsurance balances receivable

4,487

4,387

Reinsurance recoverable on losses and loss expenses

12,057

12,389

Reinsurance recoverable on policy benefits

243

249

Deferred policy acquisition costs

1,649

1,548

Value of business acquired

669

676

Goodwill and other intangible assets

4,860

4,799

Prepaid reinsurance premiums

1,643

1,541

Deferred tax assets

568

673

Investments in partially-owned insurance companies (cost - $339 and $345)

346

352

Other assets

2,955

2,495

Total assets

89,749

87,321

Liabilities

Unpaid losses and loss expenses

37,247

37,477

Unearned premiums

6,664

6,334

Future policy benefits

4,358

4,274

Insurance and reinsurance balances payable

3,454

3,542

Deposit liabilities

690

663

Securities lending payable

2,211

1,385

Payable for securities purchased

569

287

Accounts payable, accrued expenses, and other liabilities

3,724

3,948

Income taxes payable

201

159

Short-term debt

1,531

1,251

Long-term debt

3,360

Trust preferred securities

309

Total liabilities

64,318

62,989

Commitments and contingencies

Shareholders' equity

Common Shares (CHF 30.27 par value; 342,832,412 shares issued; 338,653,382 and 336,927,276 shares outstanding)

10,095

Common Shares in treasury (4,179,030 and 5,905,136 shares)

(227)

(327)

Additional paid-in capital

5,054

5,326

Retained earnings

8,300

7,327

Accumulated other comprehensive income (AOCI)

2,209

1,911

Total shareholders' equity

25,431

24,332

Total liabilities and shareholders' equity

$ 89,749

$ 87,321

Consolidated Balance Sheets (Parenthetical)

In Millions, except Share data, unless otherwise specified

Mar. 31, 2012

USD ($)

Mar. 31, 2012

CHF

Dec. 31, 2011

USD ($)

Dec. 31, 2011

CHF

Consolidated Balance Sheets [Abstract]

Fixed maturities available for sale, at amortized cost

$ 41,661

$ 40,450

Fixed maturities available for sale, hybrid financial instruments

400

357

Fixed maturities held to maturity, at fair value

8,348

8,605

Equity securities, at cost

662

671

Other investments, cost

2,221

2,112

Investments in partially-owned insurance companies, cost

$ 339

$ 345

Common Shares, par value

30.27

Common Shares, shares issued

342,832,412

Common Shares, shares outstanding

338,653,382

336,927,276

Common Shares in treasury, shares

4,179,030

5,905,136

Consolidated Statements Of Operations And Comprehensive Income (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Revenues

Net premiums written

$ 3,572

$ 3,446

Change in unearned premiums

(191)

(137)

Net premiums earned

3,381

3,309

Net investment income

544

Net realized gains (losses):

Other-than-temporary impairment (OTTI) losses gross

(10)

(5)

Portion of OTTI losses recognized in other comprehensive income (OCI)

1

Net OTTI losses recognized in income

(10)

(4)

Net realized gains (losses) excluding OTTI losses

270

(41)

Total net realized gains (losses)

260

(45)

Total revenues

4,185

3,808

Expenses

Losses and loss expenses

1,804

2,263

Policy benefits

147

91

Policy acquisition costs

582

559

Administrative expenses

510

499

Interest expense

62

63

Other (income) expense

(3)

(13)

Total expenses

3,102

3,462

Income before income tax

1,083

346

Income tax expense

110

96

Net income

973

250

Other comprehensive income

Unrealized appreciation

325

66

Reclassification adjustment for net realized gains included in net income

(33)

(56)

Subtotal

292

10

Change in:

Cumulative translation adjustment

88

232

Pension liability

(2)

(6)

Other comprehensive income, before income tax

378

236

Income tax expense related to OCI items

(80)

(48)

Other comprehensive income

298

188

Comprehensive income

$ 1,271

$ 438

Earnings per share

Basic earnings per share

$ 2.87

$ 0.74

Diluted earnings per share

$ 2.84

$ 0.73

Consolidated Statements Of Shareholders' Equity (USD $)

In Millions, unless otherwise specified

Common Shares [Member]

Common Shares In Treasury [Member]

Additional Paid-In Capital [Member]

Retained Earnings [Member]

Deferred Compensation Obligation [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Net Unrealized Appreciation On Investments [Member]

Cumulative Translation Adjustment [Member]

Pension Liability Adjustment [Member]

Common Shares Issued To Employee Trust [Member]

Total

Balance - beginning of period at Dec. 31, 2010

$ 10,161

$ (330)

$ 5,623

$ 5,926

$ 2

$ 1,399

$ 262

$ (67)

$ (2)

Balance- beginning of period, as adjusted at Dec. 31, 2010

5,787

Net shares redeemed under employee share-based compensation plans

(83)

Exercise of stock options

27

11

Dividends declared on Common Shares-par value reduction

(113)

Common Shares issued in treasury, net of net shares redeemed under employee share-based compensation plans

79

Share-based compensation expense and other

34

Net income

250

Accumulated other comprehensive income

Change in period, net of income tax expense of $(49) and $14

24

Change in period, net of income tax (expense) of $(32) and $(64)

168

Change in period, net of income tax benefit of $1 and $2

(4)

Balance - end of period at Mar. 31, 2011

10,075

(251)

5,585

6,037

2

1,782

1,423

430

(71)

(2)

23,228

Balance- beginning of period, as adjusted at Dec. 31, 2009

Cumulative effect of adjustment resulting from adoption of new accounting guidance

(139)

Balance - end of period at Dec. 31, 2010

5,926

2

(2)

Balance- beginning of period, as adjusted at Sep. 30, 2010

Cumulative effect of adjustment resulting from adoption of new accounting guidance

(139)

Balance - end of period at Dec. 31, 2010

5,926

2

(2)

Balance - beginning of period at Dec. 31, 2011

10,095

(327)

5,326

7,327

1,715

258

(62)

24,332

Balance- beginning of period, as adjusted at Dec. 31, 2011

7,327

Net shares redeemed under employee share-based compensation plans

(95)

Exercise of stock options

(10)

Common Shares repurchased

(7)

Common Shares issued in treasury, net of net shares redeemed under employee share-based compensation plans

107

Share-based compensation expense and other

33

Funding of dividends declared to Retained earnings

(200)

Net income

973

Funding of dividends declared from Additional paid-in capital

200

Dividends declared on Common Shares

(200)

Accumulated other comprehensive income

Change in period, net of income tax expense of $(49) and $14

243

Change in period, net of income tax (expense) of $(32) and $(64)

56

Change in period, net of income tax benefit of $1 and $2

(1)

Balance - end of period at Mar. 31, 2012

$ 10,095

$ (227)

$ 5,054

$ 8,300

$ 2,209

$ 1,958

$ 314

$ (63)

$ 25,431

Consolidated Statements Of Shareholders' Equity (Parenthetical) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Consolidated Statements Of Shareholders' Equity [Abstract]

Net unrealized appreciation on investments, Change in period, income tax (expense) benefit

$ (49)

$ 14

Cumulative translation adjustment, Change in period, income tax (expense) benefit

(32)

(64)

Pension liability adjustment, Change in period, income tax benefit (expense)

$ 1

$ 2

Consolidated Statements Of Cash Flows (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Cash flows from operating activities

Net income

$ 973

$ 250

Adjustments to reconcile net income to net cash flows from operating activities

Net realized (gains) losses

(260)

45

Amortization of premiums/discounts on fixed maturities

45

29

Deferred income taxes

(1)

18

Unpaid losses and loss expenses

(492)

1,016

Unearned premiums

265

125

Future policy benefits

27

(45)

Insurance and reinsurance balances payable

(126)

(47)

Accounts payable, accrued expenses, and other liabilities

(65)

(77)

Income taxes payable

41

32

Insurance and reinsurance balances receivable

(58)

230

Reinsurance recoverable on losses and loss expenses

422

(717)

Reinsurance recoverable on policy benefits

11

32

Deferred policy acquisition costs

(72)

(55)

Prepaid reinsurance premiums

(83)

7

Other

(55)

160

Net cash flows from operating activities

572

1,003

Cash flows from investing activities

Purchases of fixed maturities available for sale

(5,429)

(6,890)

Purchases of to be announced mortgage-backed securities

(54)

(343)

Purchases of fixed maturities held to maturity

(32)

(177)

Purchases of equity securities

(19)

(143)

Sales of fixed maturities available for sale

3,736

5,070

Sales of to be announced mortgage-backed securities

59

358

Sales of equity securities

26

317

Maturities and redemptions of fixed maturities available for sale

1,076

941

Maturities and redemptions of fixed maturities held to maturity

345

396

Net derivative instruments settlements

(195)

(85)

Acquisition of subsidiaries (net of cash acquired of $39 in 2011)

(25)

(45)

Other

(103)

(30)

Net cash flows used for investing activities

(615)

(631)

Cash flows from financing activities

Dividends paid on Common Shares

(159)

(112)

Common Shares repurchased

(11)

(68)

Proceeds from issuance of short-term debt

681

1,400

Repayment of short-term debt

(400)

(1,300)

Proceeds from share-based compensation plans

28

43

Net cash flows from (used for) financing activities

139

(37)

Effect of foreign currency rate changes on cash and cash equivalents

5

8

Net increase in cash

101

343

Cash - beginning of period

614

772 ¹

Cash - end of period

715

1,115 ¹

Supplemental cash flow information

Taxes paid

72

46

Interest paid

$ 37

$ 31

[1] ACE maintains two notional multi-currency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At March 31, 2011 and December 31, 2010, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Consolidated Statements Of Cash Flows (Parenthetical) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2011

Consolidated Statements Of Cash Flows [Abstract]

Acquisition of subsidiaries, cash acquired

$ 39

Summary Of Significant Accounting Policies

1.	Summary of significant accounting policies

a) Basis of presentation

ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its various subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through the following business segments: Insurance – North American, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 9 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE and its subsidiaries (collectively, ACE, we, us, or our), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions have been eliminated.

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2011 Form 10-K.

Effective January 1, 2012, we retrospectively adopted new accounting guidance for costs associated with acquiring or renewing insurance contracts. Under the new guidance, the definition of acquisition costs was modified to specify that a cost must be directly related to the successful acquisition of a new or renewal insurance contract in order to be deferred. Previously reported amounts contained in these consolidated financial statements have been adjusted to reflect the impact of retrospective adjustments as a result of applying this new accounting guidance.

b) Deferred policy acquisition costs and value of business acquired (VOBA)

Policy acquisition costs consist of commissions, premium taxes, and certain underwriting costs related directly to the successful acquisition of a new or renewal insurance contract. A VOBA intangible asset is established upon the acquisition of blocks of long duration contracts and represents the present value of estimated net cash flows for the contracts in force at the time of the acquisition. Acquisition costs and VOBA, collectively policy acquisition costs, are deferred and amortized. Policy acquisition costs on property and casualty (P&C) contracts are generally amortized ratably over the period in which premiums are earned. Policy acquisition costs on long duration contracts are amortized over the estimated life of the contracts, generally in proportion to premium revenue recognized. Policy acquisition costs are reviewed to determine if they are recoverable from future income, including investment income. Unrecoverable costs are expensed in the period identified.

Advertising costs are expensed as incurred except for direct-response campaigns that meet the criteria of the new guidance, principally related to accident and health (A&H) business produced by the Insurance – Overseas General segment, which are deferred and recognized as a component of policy acquisition costs. For individual direct-response marketing campaigns that we can demonstrate have specifically resulted in incremental sales to customers and such sales have probable future economic benefits, incremental costs directly related to the marketing campaigns are capitalized. Deferred marketing costs are reviewed regularly for recoverability from future income, including investment income, and amortized in proportion to premium revenue recognized, primarily over a ten year period.

c) Accounting guidance adopted

Accounting for costs associated with acquiring or renewing insurance contracts

In October 2010, the Financial Accounting Standards Board (FASB) issued new guidance related to the accounting for costs associated with acquiring or renewing insurance contracts. Under the new guidance, the definition of acquisition costs were modified to specify that a cost must be directly related to the successful acquisition of a new or renewal insurance contract in order to be deferred. We adopted this guidance retrospectively effective January 1, 2012 and reduced Retained earnings as of January 1, 2011 by $139 million which represents the cumulative effect of adjustment resulting from adoption of new accounting guidance. We adjusted prior period amounts contained in these consolidated financial statements to reflect the effect of adjustment from adoption of new accounting guidance including reducing Deferred policy acquisition costs and Retained earnings by $213 million and $181 million, respectively, as of December 31, 2011. The reduction to Deferred policy acquisition costs is primarily due to lower deferrals associated with unsuccessful efforts. We also reduced Net income by $10 million for the three months ended March 31, 2011.

Fair value measurements

In May 2011, the FASB issued new guidance on fair value measurements to revise the wording used to describe the requirements for measuring fair value and for disclosing information about fair value measurements. The guidance is not necessarily intended to result in a significant change in the application of the current requirements. Instead, it is intended to clarify the intended application of existing fair value measurement requirements. It also changes certain principles or requirements for measuring fair value and disclosing information about fair value measurements. We adopted this guidance prospectively effective January 1, 2012. The application of this guidance resulted in additional fair value measurements disclosures only and did not impact our financial condition or results of operations.

Acquisitions

2. Acquisitions

Prior year acquisitions

ACE acquired New York Life's Korea operations on February 1, 2011 and New York Life's Hong Kong operations on April 1, 2011 for approximately $450 million in cash. These acquired businesses, now operating under our Life segment, expand our presence in the North Asia market and complement our life insurance business established in that region. In 2012, we finalized purchase price allocations resulting in $91 million of goodwill, none of which is expected to be deductible for income tax purposes, and $163 million of intangible assets. The most significant intangible asset is VOBA.

We acquired Penn Millers Holding Corporation (PMHC) on November 30, 2011 for approximately $107 million in cash. PMHC's primary insurance subsidiary, Penn Millers Insurance Company, is a well-established underwriter in the agribusiness market since 1887 and currently operates in 34 states. PMHC operates under our Insurance – North American segment.

We acquired Rio Guayas Compania de Seguros y Reaseguros (Rio Guayas), a general insurance company in Ecuador on December 28, 2011. Rio Guayas sells a range of insurance products, including auto, life, property, and A&H. The acquisition of Rio Guayas will expand our capabilities in terms of geography, products, and distribution. Rio Guayas operates under our Insurance – Overseas General segment.

Investments

3.	Investments

a)	Fixed maturities

The following tables present the amortized cost and fair value of fixed maturities and related OTTI recognized in AOCI:


March 31, 2012
	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
	(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	3,012	$	139	$	(10	)	$	3,141	$	—
Foreign		12,417		507		(38	)		12,886		(2	)
Corporate securities		14,452		878		(66	)		15,264		(12	)
Mortgage-backed securities		9,721		392		(97	)		10,016		(119	)
States, municipalities, and political subdivisions		2,059		109		(7	)		2,161		—

	$	41,661	$	2,025	$	(218	)	$	43,468	$	(133	)


Held to maturity
U.S. Treasury and agency	$	1,081	$	40	$	—		$	1,121	$	—
Foreign		941		20		(6	)		955		—
Corporate securities		2,298		64		(8	)		2,354		—
Mortgage-backed securities		2,693		93		(2	)		2,784		—
States, municipalities, and political subdivisions		1,104		34		(4	)		1,134		—

	$	8,117	$	251	$	(20	)	$	8,348	$	—


	December 31, 2011
	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
	(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,774	$	186	$	—		$	2,960	$	—
Foreign		12,025		475		(99	)		12,401		(2	)
Corporate securities		14,055		773		(135	)		14,693		(22	)
Mortgage-backed securities		9,979		397		(175	)		10,201		(151	)
States, municipalities, and political subdivisions		1,617		96		(1	)		1,712		—

	$	40,450	$	1,927	$	(410	)	$	41,967	$	(175	)


Held to maturity
U.S. Treasury and agency	$	1,078	$	48	$	—		$	1,126	$	—
Foreign		935		18		(23	)		930		—
Corporate securities		2,338		44		(45	)		2,337		—
Mortgage-backed securities		2,949		90		(3	)		3,036		—
States, municipalities, and political subdivisions		1,147		32		(3	)		1,176		—

	$	8,447	$	232	$	(74	)	$	8,605	$	—

As discussed in Note 3 c), if a credit loss is indicated on an impaired fixed maturity, an OTTI is considered to have occurred and the portion of the impairment not related to credit losses (non-credit OTTI) is recognized in OCI. Included in the "OTTI Recognized in AOCI" columns above are the cumulative amounts of non-credit OTTI recognized in OCI adjusted for subsequent sales, maturities, and redemptions. OTTI recognized in AOCI does not include the impact of subsequent changes in fair value of the related securities. In periods subsequent to a recognition of OTTI in OCI, changes in the fair value of the related fixed maturities are reflected in Unrealized appreciation (depreciation) in the consolidated statement of shareholders' equity. For the three months ended March 31, 2012 and 2011, $68 million and $18 million, respectively, of net unrealized appreciation related to such securities is included in OCI. At March 31, 2012 and December 31, 2011, AOCI includes net unrealized depreciation of $87 million and $155 million, respectively, related to securities remaining in the investment portfolio at those dates for which ACE has recognized a non-credit OTTI.

Mortgage-backed securities (MBS) issued by U.S. government agencies are combined with all other to be announced mortgage derivatives held (refer to Note 6 a) (iv)) and are included in the category, "Mortgage-backed securities". Approximately 85 percent and 84 percent of the total mortgage-backed securities at March 31, 2012 and December 31, 2011, respectively, are represented by investments in U.S. government agency bonds. The remainder of the mortgage exposure consists of collateralized mortgage obligations and non-government mortgage-backed securities, the majority of which provide a planned structure for principal and interest payments and carry a rating of AAA by the major credit rating agencies.

The following table presents fixed maturities by contractual maturity:


	March 31, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions of U.S. dollars)
Available for sale
Due in 1 year or less	$	2,324	$	2,354	$	2,321	$	2,349
Due after 1 year through 5 years		12,606		13,091		12,325		12,722
Due after 5 years through 10 years		13,180		13,929		12,379		12,995
Due after 10 years		3,830		4,078		3,446		3,700

		31,940		33,452		30,471		31,766
Mortgage-backed securities		9,721		10,016		9,979		10,201

	$	41,661	$	43,468	$	40,450	$	41,967


Held to maturity
Due in 1 year or less	$	591	$	598	$	393	$	396
Due after 1 year through 5 years		1,922		1,967		2,062		2,090
Due after 5 years through 10 years		2,242		2,307		2,376		2,399
Due after 10 years		669		692		667		684

		5,424		5,564		5,498		5,569
Mortgage-backed securities		2,693		2,784		2,949		3,036

	$	8,117	$	8,348	$	8,447	$	8,605

Expected maturities could differ from contractual matuities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.

b)	Equity securities

The following table presents the cost and fair value of equity securities:


	March 31 2012			December 31 2011
	(in millions of U.S. dollars)
Cost	$	662		$	671
Gross unrealized appreciation		29			18
Gross unrealized depreciation		(12	)		(42	)

Fair value	$	679		$	647

c)	Net realized gains (losses)

In accordance with guidance related to the recognition and presentation of OTTI, when an impairment related to a fixed maturity has occurred, OTTI is required to be recorded in net income if management has the intent to sell the security or it is more likely than not that we will be required to sell the security before the recovery of its amortized cost. Further, in cases where we do not intend to sell the security and it is more likely than not that we will not be required to sell the security, ACE must evaluate the security to determine the portion of the impairment, if any, related to credit losses. If a credit loss is indicated, an OTTI is considered to have occurred and any portion of the OTTI related to credit losses must be reflected in net income while the portion of OTTI related to all other factors is recognized in OCI. For fixed maturities held to maturity, OTTI recognized in OCI is accreted from AOCI to the amortized cost of the fixed maturity prospectively over the remaining term of the securities.

Each quarter, securities in an unrealized loss position (impaired securities), including fixed maturities, securities lending collateral, equity securities, and other investments, are reviewed to identify impaired securities to be specifically evaluated for a potential OTTI.

For all non-fixed maturities, OTTI is evaluated based on the following:

•

the amount of time a security has been in a loss position and the magnitude of the loss position;

•

the period in which cost is expected to be recovered, if at all, based on various criteria including economic conditions and other issuer-specific developments; and

•

ACE's ability and intent to hold the security to the expected recovery period.

As a general rule, we also consider that equity securities in an unrealized loss position for twelve consecutive months are impaired.

We review each fixed maturity in an unrealized loss position to assess whether the security is a candidate for credit loss. Specifically, we consider credit rating, market price, and issuer-specific financial information, among other factors, to assess the likelihood of collection of all principal and interest as contractually due. Securities for which we determine that credit loss is likely are subjected to further analysis to estimate the credit loss recognized in net income, if any. In general, credit loss recognized in net income equals the difference between the security's amortized cost and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security. All significant assumptions used in determining credit losses are subject to change as market conditions evolve.

Projected cash flows for corporate securities (principally senior unsecured bonds) are driven primarily by assumptions regarding probability of default and also the timing and amount of recoveries associated with defaults. We develop these estimates using information based on market observable data, issuer-specific information, and credit ratings. ACE developed its default assumption by using historical default data by Moody's Investors Service (Moody's) rating category to calculate a 1-in-100 year probability of default, which results in a default assumption in excess of the historical mean default rate. We believe that use of a default assumption in excess of the historical mean is reasonable in light of current market conditions.

For the three months ended March 31, 2012 and 2011, credit losses recognized in net income for corporate securities were $3 million and nil, respectively.

For mortgage-backed securities, credit impairment is assessed using a cash flow model that estimates the cash flows on the underlying mortgages, using the security-specific collateral and transaction structure. The model estimates cash flows from the underlying mortgage loans and distributes those cash flows to various tranches of securities, considering the transaction structure and any subordination and credit enhancements that exist in that structure. The cash flow model incorporates actual cash flows on the mortgage-backed securities through the current period and then projects the remaining cash flows using a number of assumptions, including default rates, prepayment rates, and loss severity rates (the par value of a defaulted security that will not be recovered) on foreclosed properties.

Credit losses recognized in net income for mortgage-backed securities for the three months ended March 31, 2012 and 2011 were $3 million and $1 million, respectively.

The following table presents the Net realized gains (losses) and the losses included in Net realized gains (losses) and OCI as a result of conditions which caused us to conclude the decline in fair value of certain investments was "other-than-temporary":


	Three Months Ended March 31
	2012			2011
	(in millions of U.S. dollars)
Fixed maturities:
OTTI on fixed maturities, gross	$	(7	)	$	(5	)
OTTI on fixed maturities recognized in OCI (pre-tax)		—			1

OTTI on fixed maturities, net		(7	)		(4	)
Gross realized gains excluding OTTI		112			109
Gross realized losses excluding OTTI		(71	)		(56	)

Total fixed maturities		34			49


Equity securities:
OTTI on equity securities		(1	)		—
Gross realized gains excluding OTTI		2			8
Gross realized losses excluding OTTI		—			(1	)

Total equity securities		1			7


OTTI on other investments		(2	)		—
Foreign exchange losses		(5	)		(79	)
Investment and embedded derivative instruments		42			(20	)
Fair value adjustments on insurance derivative		428			71
S&P put options and futures		(231	)		(71	)
Other derivative instruments		(5)			(1)
Other		(2	)		(1	)

Net realized gains (losses)	$	260		$	(45	)

The following table presents a roll-forward of pre-tax credit losses related to fixed maturities for which a portion of OTTI was recognized in OCI:


	Three Months Ended March 31
	2012			2011
	(in millions of U.S. dollars)
Balance of credit losses related to securities still held - beginning of period	$	74		$	137
Additions where no OTTI was previously recorded		1			—
Additions where an OTTI was previously recorded		5			1
Reductions for securities sold during the period		(25	)		(42	)

Balance of credit losses related to securities still held - end of period	$	55		$	96

d)	Gross unrealized loss

At March 31, 2012, there were 2,900 fixed maturities out of a total of 22,584 fixed maturities in an unrealized loss position. The largest single unrealized loss in the fixed maturities was $7 million. There were approximately 62 equity securities out of a total of 174 equity securities in an unrealized loss position. The largest single unrealized loss in the equity securities was $8 million. Fixed maturities in an unrealized loss position at March 31, 2012 comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase. Equity securities in an unrealized loss position include foreign fixed income securities held in a commingled fund structure for which fair value declined primarily due to widening credit spreads since the date of purchase.

The following tables present, for all securities in an unrealized loss position (including securities on loan), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:


	0 – 12 Months					Over 12 Months					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in millions of U.S. dollars)
March 31, 2012
U.S. Treasury and agency	$	820	$	(9.5	)	$	—	$	—		$	820	$	(9.5	)
Foreign		1,558		(25.7	)		430		(18.3	)		1,988		(44.0	)
Corporate securities		1,937		(56.4	)		201		(17.8	)		2,138		(74.2	)
Mortgage-backed securities		464		(4.4	)		500		(95.0	)		964		(99.4	)
States, municipalities, and political subdivisions		480		(7.2	)		62		(3.5	)		542		(10.7	)

Total fixed maturities		5,259		(103.2	)		1,193		(134.6	)		6,452		(237.8	)
Equity securities		489		(12.0	)		—		—			489		(12.0	)
Other investments		156		(5.7	)		—		—			156		(5.7	)

Total	$	5,904	$	(120.9	)	$	1,193	$	(134.6	)	$	7,097	$	(255.5	)


	0 – 12 Months					Over 12 Months					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in millions of U.S. dollars)
December 31, 2011
Foreign	$	1,801	$	(82.2	)	$	529	$	(40.0	)	$	2,330	$	(122.2	)
Corporate securities		3,084		(148.2	)		268		(32.2	)		3,352		(180.4	)
Mortgage-backed securities		440		(7.5	)		586		(170.2	)		1,026		(177.7	)
States, municipalities, and political subdivisions		30		(0.4	)		98		(3.5	)		128		(3.9	)

Total fixed maturities		5,355		(238.3	)		1,481		(245.9	)		6,836		(484.2	)
Equity securities		484		(42.3	)		—		—			484		(42.3	)
Other investments		88		(8.3	)		—		—			88		(8.3	)

Total	$	5,927	$	(288.9	)	$	1,481	$	(245.9	)	$	7,408	$	(534.8	)

e)	Restricted assets

ACE is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance operations. These requirements are generally promulgated in the statutory regulations of the individual jurisdictions. The assets on deposit are available to settle insurance and reinsurance liabilities. ACE is also required to restrict assets pledged under reverse repurchase agreements. We also use trust funds in certain large reinsurance transactions where the trust funds are set up for the benefit of the ceding companies and generally take the place of letter of credit (LOC) requirements. We also have investments in segregated portfolios primarily to provide collateral or guarantees for LOCs and derivative transactions. Included in restricted assets at March 31, 2012 and December 31, 2011, are fixed maturities and short-term investments totaling $15.6 billion and $14.9 billion, respectively, and cash of $291 million and $179 million, respectively.

The following table presents the components of restricted assets:


	March 31 2012		December 31 2011
	(in millions of U.S. dollars)
Trust funds	$	10,605	$	9,940
Deposits with non-U.S. regulatory authorities		2,126		2,240
Deposits with U.S. regulatory authorities		1,293		1,307
Assets pledged under reverse repurchase agreements		1,401		1,251
Other pledged assets		451		364

	$	15,876	$	15,102

Fair Value Measurements

4. Fair value measurements

a) Fair value hierarchy

Fair value of financial assets and financial liabilities is estimated based on the framework established in the fair value accounting guidance. The guidance defines fair value as the price to sell an asset or transfer a liability in an orderly transaction between market participants and establishes a three-level valuation hierarchy in which inputs into valuation techniques used to measure fair value are classified. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data.

The three levels of the hierarchy are as follows:

•

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;

•

Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves, quoted prices for similar assets and liabilities in active markets, and quoted prices for identical or similar assets and liabilities in markets that are not active; and

•

Level 3 – Inputs that are unobservable and reflect management's judgments about assumptions that market participants would use in pricing an asset or liability.

We categorize financial instruments within the valuation hierarchy at the balance sheet date based upon the lowest level of inputs that are significant to the fair value measurement. Accordingly, transfers between levels within the valuation hierarchy occur when there are significant changes to the inputs, such as increases or decreases in market activity, changes to the availability of current prices, changes to the transparency to underlying inputs, and whether there are significant variances in quoted prices. Transfers in and/or out of any level are assumed to occur at the end of the period.

We use one or more pricing services to obtain fair value measurements for the majority of the investment securities we hold. Based on management's understanding of the methodologies used, these pricing services only produce an estimate of fair value if there is observable market information that would allow them to make a fair value estimate. Based on our understanding of the market inputs used by the pricing services, all applicable investments have been valued in accordance with GAAP. We do not typically adjust prices obtained from pricing services. The following is a description of the valuation techniques and inputs used to determine fair values for financial instruments carried at fair value, as well as the general classification of such financial instruments pursuant to the valuation hierarchy.

Fixed maturities

We use pricing services to estimate fair value measurements for the majority of our fixed maturities. The pricing services use market quotations for fixed maturities that have quoted prices in active markets; such securities are classified within Level 1. For fixed maturities other than U.S. Treasury securities that generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Additional valuation factors that can be taken into account are nominal spreads, dollar basis, and liquidity adjustments. The pricing services evaluate each asset class based on relevant market and credit information, perceived market movements, and sector news. The market inputs used in the pricing evaluation, listed in the approximate order of priority include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. The extent of the use of each input is dependent on the asset class and the market conditions. Given the asset class, the priority of the use of inputs may change or some market inputs may not be relevant. Additionally, the valuation of fixed maturity investments is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing), which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. The overwhelming majority of fixed maturities are classified within Level 2 because the most significant inputs used in the pricing techniques are observable. For a small number of fixed maturities, we obtain a quote from a broker (typically a market maker). Due to the disclaimers on the quotes that indicate that the price is indicative only, we include these fair value estimates in Level 3.

Equity securities

Equity securities with active markets are classified within Level 1 as fair values are based on quoted market prices. For non-public equity securities, fair values are based on market valuations and are classified within Level 2. Equity securities for which pricing is unobservable are classified within Level 3.

Short-term investments

Short-term investments, which comprise securities due to mature within one year of the date of purchase that are traded in active markets, are classified within Level 1 as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their cost approximates fair value.

Other investments

Fair values for the majority of Other investments including investments in partially-owned investment companies, investment funds, and limited partnerships are based on their respective net asset values or equivalent (NAV). The majority of these investments, for which NAV was used as a practical expedient to measure fair value, are classified within Level 3 because either ACE will never have the contractual option to redeem the investments or will not have the contractual option to redeem the investments in the near term. The remainder of such investments is classified within Level 2. Certain of our long duration contracts have assets that do not qualify for separate account reporting under GAAP. These assets comprise mutual funds classified within Level 1 in the valuation hierarchy on the same basis as other equity securities traded in active markets. Other investments also includes equity securities and fixed maturities held in rabbi trusts maintained by ACE for deferred compensation plans, which are classified within the valuation hierarchy on the same basis as other equity securities and fixed maturities.

Securities lending collateral

The underlying assets included in Securities lending collateral in the consolidated balance sheets are fixed maturities which are classified in the valuation hierarchy on the same basis as other fixed maturities. Excluded from the valuation hierarchy is the corresponding liability related to ACE's obligation to return the collateral plus interest as it is reported at contract value and not fair value on the consolidated balance sheets.

Investment derivative instruments

Actively traded investment derivative instruments, including futures, options, and exchange-traded forward contracts are classified within Level 1 as fair values are based on quoted market prices. Investment derivative instruments are recorded in Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Other derivative instruments

We maintain positions in other derivative instruments including exchange-traded equity futures contracts and option contracts designed to limit exposure to a severe equity market decline, which would cause an increase in expected claims and, therefore, reserves for our guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) reinsurance business. Our position in exchange-traded equity futures contracts is classified within Level 1. The fair value of the majority of the remaining positions in other derivative instruments is based on significant observable inputs including equity security and interest rate indices. Accordingly, these are classified within Level 2. Our position in credit default swaps is typically included within Level 3. Other derivative instruments are recorded in Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Separate account assets

Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of certain guarantees made by ACE. Separate account assets comprise mutual funds classified in the valuation hierarchy on the same basis as other equity securities traded in active markets and are classified within Level 1. Separate account assets also include fixed maturities classified within Level 2 because the most significant inputs used in the pricing techniques are observable. Excluded from the valuation hierarchy are the corresponding liabilities as they are reported at contract value and not fair value in the consolidated balance sheets. Separate account assets are recorded in Other assets in the consolidated balance sheets.

Guaranteed living benefits

The GLB arises from life reinsurance programs covering living benefit guarantees whereby we assume the risk of guaranteed minimum income benefits (GMIB) and guaranteed minimum accumulation benefits (GMAB) associated with variable annuity contracts. GLB's are recorded in Accounts payable, accrued expenses, and other liabilities and Future policy benefits in the consolidated balance sheets. For GLB reinsurance, ACE estimates fair value using an internal valuation model which includes current market information and estimates of policyholder behavior. All of the treaties contain claim limits, which are factored into the valuation model. The fair value depends on a number of inputs, including changes in interest rates, changes in equity markets, credit risk, current account value, changes in market volatility, expected annuitization rates, changes in policyholder behavior, and changes in policyholder mortality.

The most significant policyholder behavior assumptions include lapse rates and the GMIB annuitization rates. Assumptions regarding lapse rates and GMIB annuitization rates differ by treaty but the underlying methodologies to determine rates applied to each treaty are comparable. The assumptions regarding lapse and GMIB annuitization rates determined for each treaty are based on a dynamic calculation that uses several underlying factors.

A lapse rate is the percentage of in-force policies surrendered in a given calendar year. All else equal, as lapse rates increase, ultimate claim payments will decrease. In general, the base lapse function assumes low lapse rates (ranging from about 1 percent to 6 percent per annum) during the surrender charge period of the GMIB contract, followed by a "spike" lapse rate (ranging from about 10 percent to 30 percent per annum) in the year immediately following the surrender charge period, and then reverting to an ultimate lapse rate (generally around 10 percent per annum), typically over a 2-year period. This base rate is adjusted downward for policies with more valuable guarantees (policies with guaranteed values far in excess of their account values) by multiplying the base lapse rate by a factor ranging from 15 percent to 75 percent. Additional lapses due to partial withdrawals and older policyholders with tax-qualified contracts (due to required minimum distributions) are also included.

The GMIB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed benefit provided under the GMIB. All else equal, as GMIB annuitization rates increase, ultimate claim payments will increase, subject to treaty claim limits. In general ACE assumes that GMIB annuitization rates will be higher for policies with more valuable guarantees (policies with guaranteed values far in excess of their account values). In addition, we also assume that GMIB annuitization rates are higher in the first year immediately following the waiting period (the first year the policies are eligible to annuitize using the GMIB) in comparison to all subsequent years. We do not yet have a robust set of annuitization experience because most of our clients' policyholders are not yet eligible to annuitize using the GMIB. However, for certain clients representing approximately 36 percent of the total GMIB guaranteed value there are several years of annuitization experience. For these clients the annuitization function reflects the actual experience and has a maximum annuitization rate per annum of 8 percent (a higher maximum applies in the first year a policy is eligible to annuitize using the GMIB – it is over 13 percent). For most clients, there is not a credible amount of observable relevant behavior data and so we use a weighted-average (with a heavier weighting on the observed experience noted previously) of three different annuitization functions with maximum annuitization rates per annum of 8 percent, 12 percent, and 30 percent, respectively (with significantly higher rates in the first year a policy is eligible to annuitize using the GMIB). The GMIB reinsurance treaties include claim limits to protect ACE in the event that actual annuitization behavior is significantly higher than expected.

The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data available from cedants. For treaties with limited experience, rates are established in line with data received from other ceding companies adjusted, as appropriate, with industry estimates. The model and related assumptions are continuously re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of more information, such as market conditions, market participant assumptions, and demographics of in-force annuities. During the three months ended March 31, 2012, no material changes were made to actuarial or behavioral assumptions.

We view the variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of a cumulative long-term economic net loss relatively small at the time of pricing. However, adverse changes in market factors and policyholder behavior will have an adverse impact on net income, which may be material. Because of the significant use of unobservable inputs including policyholder behavior, GLB reinsurance is classified within Level 3.

The following tables present, by valuation hierarchy, the financial instruments measured at fair value on a recurring basis:


	Level 1			Level 2		Level 3			Total
	(in millions of U.S. dollars)
March 31, 2012
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,762		$	1,379	$	—		$	3,141
Foreign		203			12,634		49			12,886
Corporate securities		23			15,124		117			15,264
Mortgage-backed securities		—			9,997		19			10,016
States, municipalities, and political subdivisions		—			2,160		1			2,161

		1,988			41,294		186			43,468

Equity securities		669			—		10			679
Short-term investments		1,344			755		—			2,099
Other investments		236			239		1,954			2,429
Securities lending collateral		—			2,204		—			2,204
Investment derivative instruments		12			—		—			12
Other derivative instruments		(78	)		37		(1	)		(42	)
Separate account assets		764			56		—			820

Total assets measured at fair value	$	4,935		$	44,585	$	2,149		$	51,669

Liabilities:
GLB⁽¹⁾	$	—		$	—	$	863		$	863

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.


	Level 1			Level 2		Level 3		Total
	(in millions of U.S. dollars)
December 31, 2011
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,691		$	1,264	$	5	$	2,960
Foreign		212			12,156		33		12,401
Corporate securities		20			14,539		134		14,693
Mortgage-backed securities		—			10,173		28		10,201
States, municipalities, and political subdivisions		—			1,711		1		1,712

		1,923			39,843		201		41,967

Equity securities		632			2		13		647
Short-term investments		1,246			1,055		—		2,301
Other investments		208			229		1,877		2,314
Securities lending collateral		—			1,375		—		1,375
Investment derivative instruments		10			—		—		10
Other derivative instruments		(16	)		54		3		41
Separate account assets		607			53		—		660

Total assets measured at fair value	$	4,610		$	42,611	$	2,094	$	49,315

Liabilities:
GLB⁽¹⁾	$	—		$	—	$	1,319	$	1,319

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

The transfers between Level 1 and Level 2 during the three months ended March 31, 2012 and 2011 were not material.

Fair value of alternative investments

Included in Other investments in the fair value hierarchy at March 31, 2012 and December 31, 2011 are investment funds, limited partnerships, and partially-owned investment companies measured at fair value using NAV as a practical expedient. At March 31, 2012 and December 31, 2011, there were no probable or pending sales related to any of the investments measured at fair value using NAV.

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments:


	Expected Liquidation Period		March 31, 2012				December 31, 2011
	Expected Liquidation Period		Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
			(in millions of U.S. dollars)
Financial		5 to 9 Years	$	207	$	135	$	205	$	141
Real estate		3 to 9 Years		282		147		270		96
Distressed		6 to 9 Years		189		52		182		57
Mezzanine		6 to 9 Years		227		337		195		282
Traditional		3 to 8 Years		579		525		565		200
Vintage		1 to 3 Years		18		1		18		1
Investment funds		Not Applicable		383		—		378		—

			$	1,885	$	1,197	$	1,813	$	777

Included in all categories in the above table except for Investment funds are investments for which ACE will never have the contractual option to redeem but receives distributions based on the liquidation of the underlying assets. Included in the "Expected Liquidation Period" column above is the range in years over which ACE expects the majority of underlying assets in the respective categories to be liquidated. Further, for all categories except for Investment funds, ACE does not have the ability to sell or transfer the investments without the consent from the general partner of individual funds.

Financial

Financial consists of investments in private equity funds targeting financial services companies such as financial institutions and insurance services around the world.

Real estate

Real estate consists of investments in private equity funds targeting global distress opportunities, value added U.S. properties, and global mezzanine debt securities in the commercial real estate market.

Distressed

Distressed consists of investments in private equity funds targeting distressed debt/credit and equity opportunities in the U.S.

Mezzanine

Mezzanine consists of investments in private equity funds targeting private mezzanine debt of large-cap and mid-cap companies in the U.S. and worldwide.

Traditional

Traditional consists of investments in private equity funds employing traditional private equity investment strategies such as buyout and venture with different geographical focuses including Brazil, Asia, Europe, and the U.S.

Vintage

Vintage consists of investments in private equity funds made before 2002 and where the funds' commitment periods had already expired.

Investment funds

ACE's investment funds employ various investment strategies such as long/short equity and arbitrage/distressed. Included in this category are investments for which ACE has the option to redeem at agreed upon value as described in each investment fund's subscription agreement. Depending on the terms of the various subscription agreements, investment fund investments may be redeemed monthly, quarterly, semi-annually, or annually. If ACE wishes to redeem an investment fund investment, it must first determine if the investment fund is still in a lock-up period (a time when ACE cannot redeem its investment so that the investment fund manager has time to build the portfolio). If the investment fund is no longer in its lock-up period, ACE must then notify the investment fund manager of its intention to redeem by the notification date prescribed by the subscription agreement. Subsequent to notification, the investment fund can redeem ACE's investment within several months of the notification. Notice periods for redemption of the investment funds range between 5 and 120 days. ACE can redeem its investment funds without consent from the investment fund managers.

Level 3 financial instruments

The fair value of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) consist of various inputs and assumptions that management makes when determining the fair value. Management analyzes changes in fair value measurements classified within Level 3 by comparing pricing and returns of our investments to benchmarks, including month-over-month movements, investment credit spreads, interest rate movements, and credit quality of securities.

The following table presents the significant unobservable inputs used in the Level 3 liability valuations. Excluded from the table below are inputs used to fair value Level 3 assets which are based on single broker quotes or net asset value and contain no quantitative unobservable inputs developed by management.

(in millions of U.S. dollars)

Fair
Value at
March 31,
2012

Valuation
Technique

Significant
Unobservable Inputs

Ranges

GLB⁽¹⁾

$

863

Actuarial model

Lapse rate

1%- 30%

Annuitization rate

0%- 50%

⁽¹⁾	Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

The following tables present a reconciliation of the beginning and ending balances of financial instruments measured at fair value using significant unobservable inputs (Level 3):


	Three Months Ended March 31, 2012
	Assets																							Liabilities
	Available-for-Sale Debt Securities														Equity securities			Other investments			Other derivative instruments			GLB⁽¹⁾
	U.S. Treasury and Agency			Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions		Equity securities			Other investments			Other derivative instruments			GLB⁽¹⁾
				(in millions of U.S. dollars)
Balance-Beginning of Period	$	5		$	33		$	134		$	28		$	1	$	13		$	1,877		$	3		$	1,319
Transfers out of Level 3		(5	)		(1	)		(7	)		(12	)		—		—			—			—			—
Change in Net Unrealized Gains (Losses) included in OCI		—			—			2			—			—		1			9			—			—
Net Realized Gains/Losses		—			—			—			—			—		—			(2	)		(3	)		(456	)
Purchases		—			34			3			4			—		1			113			—			—
Sales		—			(17	)		(8	)		—			—		(5	)		(2	)		—			—
Settlements		—			—			(7	)		(1	)		—		—			(41	)		(1	)		—

Balance-End of Period	$	—		$	49		$	117		$	19		$	1	$	10		$	1,954		$	(1	)	$	863

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	—		$	(2	)	$	(3	)	$	(456	)

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.


	Three Months Ended March 31, 2011
	Assets																				Liabilities
	Available-for-Sale Debt Securities												Equity securities			Other investments		Other derivative instruments			GLB⁽¹⁾
	Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions			Equity securities			Other investments		Other derivative instruments			GLB⁽¹⁾
	(in millions of U.S. dollars)
Balance-Beginning of Period	$	26		$	115		$	39		$	2		$	13		$	1,432	$	4		$	507
Transfers into Level 3		4			5			1			—			—			—		—			—
Transfers out of Level 3		(1	)		(4	)		—			—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI		(1	)		1			—			—			(1	)		42		—			—
Net Realized Gains/Losses		—			(1	)		—			—			2			—		1			(58	)
Purchases		—			19			46			—			—			90		—			—
Sales		(1	)		(19	)		(3	)		—			(4	)		—		—			—
Settlements		(1	)		(3	)		(2	)		(1	)		—			—		(1	)		—

Balance-End of Period	$	26		$	113		$	81		$	1		$	10		$	1,564	$	4		$	449

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	—	$	1		$	(58	)

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $596 million at March 31, 2011, and $648 million at December 31, 2010, which includes a fair value derivative adjustment of $449 million and $507 million, respectively.

b) Financial instruments disclosed, but not measured, at fair value

ACE uses various financial instruments in the normal course of its business. Our insurance contracts are excluded from fair value of financial instruments accounting guidance, and therefore, are not included in the amounts discussed below.

The carrying values of cash, other assets, other liabilities, and other financial instruments not included below approximated their fair values.

Investments in partially-owned insurance companies

Fair values for investments in partially-owned insurance companies are based on ACE's share of the net assets based on the financial statements provided by those companies.

Short- and long-term debt and trust preferred securities

Where practical, fair values for short-term debt, long-term debt, and trust preferred securities are estimated using discounted cash flow calculations based principally on observable inputs including incremental borrowing rates, which reflect ACE's credit rating, for similar types of borrowings with maturities consistent with those remaining for the debt being valued.

The following table presents carrying values and fair values of financial instruments not measured at fair value:


	March 31, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions of U.S. dollars)
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	1,081	$	1,121	$	1,078	$	1,126
Foreign		941		955		935		930
Corporate securities		2,298		2,354		2,338		2,337
Mortgage-backed securities		2,693		2,784		2,949		3,036
States, municipalities, and political subdivisions		1,104		1,134		1,147		1,176

		8,117		8,348		8,447		8,605
Partially-owned insurance companies		346		346		352		352

Total assets		8,463		8,694		8,799		8,957

Liabilities:
Short-term debt		1,531		1,531		1,251		1,251
Long-term debt		3,360		3,878		3,360		3,823
Trust preferred securities		309		404		309		404

Total liabilities	$	5,200	$	5,813	$	4,920	$	5,478

The following table presents, by valuation hierarchy, the financial instruments not measured at fair value:


	Level 1		Level 2		Level 3		Total
	(in millions of U.S. dollars)
March 31, 2012
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	570	$	551	$	—	$	1,121
Foreign		—		955		—		955
Corporate securities		—		2,338		16		2,354
Mortgage-backed securities		—		2,784		—		2,784
States, municipalities, and political subdivisions		—		1,134		—		1,134

		570		7,762		16		8,348
Partially-owned insurance companies		—		—		346		346

Total assets		570		7,762		362		8,694

Liabilities:
Short-term debt		—		1,531		—		1,531
Long-term debt		—		3,878		—		3,878
Trust preferred securities		—		404		—		404

Total liabilities	$	—	$	5,813	$	—	$	5,813

Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts

5. Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts

The following table presents income and expenses relating to GMDB and GLB reinsurance. GLBs include GMIBs as well as some GMABs originating in Japan.


	Three Months Ended March 31
	2012		2011
	(in millions of U.S. dollars)
GMDB
Net premiums earned	$	23	$	26
Policy benefits and other reserve adjustments	$	27	$	22
GLB
Net premiums earned	$	41	$	41
Policy benefits and other reserve adjustments		4		6
Net realized gains (losses)		458		58

Gain recognized in income	$	495	$	93
Net cash received	$	39	$	41
Net decrease in liability	$	456	$	52

At March 31, 2012, reported liabilities for GMDB and GLB reinsurance were $127 million and $1.05 billion, respectively, compared with $138 million and $1.5 billion, respectively, at December 31, 2011. The reported liability for GLB reinsurance of $1.05 billion at March 31, 2012, and $1.5 billion at December 31, 2011, includes a fair value derivative adjustment of $863 million and $1.3 billion, respectively. Included in Net realized gains (losses) in the table above are gains (losses) related to foreign exchange and other fair value derivative adjustments. Reported liabilities for both GMDB and GLB reinsurance are determined using internal valuation models. Such valuations require considerable judgment and are subject to significant uncertainty. The valuation of these products is subject to fluctuations arising from, among other factors, changes in interest rates, changes in equity markets, changes in credit markets, changes in the allocation of the investments underlying annuitants' account values, and assumptions regarding future policyholder behavior. These models and the related assumptions are continually reviewed by management and enhanced, as appropriate, based upon improvements in modeling assumptions and availability of more information, such as market conditions and demographics of in-force annuities.

Variable Annuity Net Amount at Risk

(i) Reinsurance covering the GMDB risk only

At March 31, 2012 and December 31, 2011 the net amount at risk from reinsurance programs covering the GMDB risk only was $1.5 billion and $1.8 billion, respectively.

For reinsurance programs covering the GMDB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

•

policy account values and guaranteed values are fixed at the valuation date (March 31, 2012 and December 31, 2011, respectively);

•

there are no lapses or withdrawals;

•

mortality according to 100 percent of the Annuity 2000 mortality table;

•

future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 1.0 and 2.0 percent; and

•

reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering the GMDB risk only, if all the cedants' policyholders were to die immediately at March 31, 2012 was approximately $500 million. This takes into account all applicable reinsurance treaty claim limits.

(ii) Reinsurance covering the GLB risk only

At March 31, 2012 and December 31, 2011, the net amount at risk from reinsurance programs covering the GLB risk only was $221 million and $380 million, respectively.

For reinsurance programs covering the GLB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

•

policy account values and guaranteed values are fixed at the valuation date (March 31, 2012 and December 31, 2011, respectively);

•

there are no deaths, lapses, or withdrawals;

•

policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

•

for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

•

future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.0 and 4.0 percent; and

•

reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

(iii) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders

At March 31, 2012 and December 31, 2011, the GMDB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $136 million and $182 million, respectively.

At March 31, 2012 and December 31, 2011, the GLB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $660 million and $998 million, respectively.

These net amounts at risk reflect the interaction between the two types of benefits on any single policyholder (eliminating double-counting), and therefore the net amounts at risk should be considered additive.

For reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

•

policy account values and guaranteed values are fixed at the valuation date (March 31, 2012 and December 31, 2011 respectively);

•

there are no lapses, or withdrawals;

•

mortality according to 100 percent of the Annuity 2000 mortality table;

•

policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

•

for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

•

future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 1.0 and 2.0 percent; and

•

reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, if all of the cedants' policyholders were to die immediately at March 31, 2012 was approximately $800 million. This takes into account all applicable reinsurance treaty claim limits. Although there would be an increase in death claims resulting from 100 percent immediate mortality of all policyholders, the GLB claims would be zero.

The average attained age of all policyholders under sections i), ii), and iii) above, weighted by the guaranteed value of each reinsured policy, is approximately 67 years.

Commitments, Contingencies, And Guarantees

6. Commitments, contingencies, and guarantees

a) Derivative instruments

Derivative instruments employed

ACE maintains positions in derivative instruments such as futures, options, swaps, and foreign currency forward contracts for which the primary purposes are to manage duration and foreign currency exposure, yield enhancement, or to obtain an exposure to a particular financial market. Along with convertible bonds and to be announced mortgage-backed securities (TBA), discussed below, these are the most numerous and frequent derivative transactions.

ACE maintains positions in convertible bond investments that contain embedded derivatives. In addition, we purchase TBAs as part of our investing activities. These securities are included within the fixed maturities available for sale (FM AFS) portfolio.

Under reinsurance programs covering GLBs, ACE assumes the risk of GLBs, including GMIB and GMAB, associated with variable annuity contracts. The GMIB risk is triggered if, at the time the contract holder elects to convert the accumulated account value to a periodic payment stream (annuitize), the accumulated account value is not sufficient to provide a guaranteed minimum level of monthly income. The GMAB risk is triggered if, at contract maturity, the contract holder's account value is less than a guaranteed minimum value. The GLB reinsurance product meets the definition of a derivative instrument. Benefit reserves in respect of GLBs are classified as Future policy benefits (FPB) while the fair value derivative adjustment is classified within Accounts payable, accrued expenses, and other liabilities (AP). ACE also maintains positions in exchange-traded equity futures contracts and options on equity market indices to limit equity exposure in the GMDB and GLB blocks of business.

In relation to certain debt issuances, ACE, from time to time, has entered into interest rate swap transactions for the purpose of either fixing or reducing borrowing costs. Although the use of these interest rate swaps has the economic effect of fixing or reducing borrowing costs on a net basis, gross interest expense on the related debt issuances is included in Interest expense while the settlements related to the interest rate swaps are reflected in Net realized gains (losses) in the consolidated statements of operations. At March 31, 2012, ACE had no in-force interest rate swaps.

ACE buys credit default swaps to mitigate global credit risk exposure, primarily related to reinsurance recoverables.

All derivative instruments are carried at fair value with changes in fair value recorded in Net realized gains (losses) in the consolidated statements of operations. None of the derivative instruments are designated as hedges for accounting purposes.

The following table presents the balance sheet locations, fair values in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:


			March 31, 2012					December 31, 2011
	Consolidated Balance Sheet Location		Fair Value			Notional Value/ Payment Provision		Fair Value			Notional Value/ Payment Provision
	Consolidated Balance Sheet Location		Fair Value			Notional Value/ Payment Provision		Fair Value			Notional Value/ Payment Provision
			(in millions of U.S. dollars)
Investment and embedded derivative instruments

Foreign currency forward contracts		AP	$	(2	)	$	681	$	7		$	674
Futures contracts on money market instruments		AP		1			2,077		7			10,476
Futures contracts on notes and bonds		AP		12			942		(4	)		1,055
Options on money market instruments		AP		1			3,192		—			292
Convertible bonds		FM AFS		400			374		357			353
TBAs		FM AFS		54			53		60			56

			$	466		$	7,319	$	427		$	12,906

Other derivative instruments
Futures contracts on equities⁽¹⁾		AP	$	(78	)	$	2,209	$	(16	)	$	1,367
Options on equity market indices⁽¹⁾		AP		37			250		54			250
Credit default swaps		AP		(1	)		350		3			350
Other		AP		—			6		—			6

			$	(42	)	$	2,815	$	41		$	1,973


GLB⁽²⁾		AP/FPB	$	(1,049	)	$	881	$	(1,505	)	$	1,378

⁽¹⁾	Related to GMDB and GLB blocks of business.

⁽²⁾	Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

The following table presents net realized gains (losses) related to derivative instrument activity in the consolidated statements of operations:


	Three Months Ended March 31
	2012			2011
	2012			2011
	(in millions of U.S. dollars)
Investment and embedded derivative instruments
Foreign currency forward contracts	$	(8	)	$	(15	)
All other futures contracts and options		26			(3	)
Convertible bonds		24			(1	)
TBAs		—			(1	)

Total investment and embedded derivative instruments	$	42		$	(20	)

GLB and other derivative instruments
GLB⁽¹⁾	$	428		$	71
Futures contracts on equities⁽²⁾		(213	)		(63	)
Options on equity market indices⁽²⁾		(18	)		(8	)
Credit default swaps		(5	)		(1	)

Total GLB and other derivative instruments	$	192		$	(1	)

	$	234		$	(21	)

⁽¹⁾	Excludes foreign exchange gains (losses) related to GLB.

⁽²⁾	Related to GMDB and GLB blocks of business

Derivative instrument objectives

(i) Foreign currency exposure management

A foreign currency forward contract (forward) is an agreement between participants to exchange specific foreign currencies at a future date. ACE uses forwards to minimize the effect of fluctuating foreign currencies.

(ii) Duration management and market exposure

Futures

Futures contracts give the holder the right and obligation to participate in market movements, determined by the index or underlying security on which the futures contract is based. Settlement is made daily in cash by an amount equal to the change in value of the futures contract times a multiplier that scales the size of the contract. Exchange-traded futures contracts on money market instruments, notes and bonds are used in fixed maturity portfolios to more efficiently manage duration, as substitutes for ownership of the money market instruments, bonds and notes without significantly increasing the risk in the portfolio. Investments in futures contracts may be made only to the extent that there are assets under management not otherwise committed.

Exchange-traded equity futures contracts are used to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

Options

An option contract conveys to the holder the right, but not the obligation, to purchase or sell a specified amount or value of an underlying security at a fixed price. Option contracts are used in the investment portfolio as protection against unexpected shifts in interest rates, which would affect the duration of the fixed maturity portfolio. By using options in the portfolio, the overall interest rate sensitivity of the portfolio can be reduced. Option contracts may also be used as an alternative to futures contracts in the synthetic strategy as described above.

Another use for option contracts is to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

The price of an option is influenced by the underlying security, expected volatility, time to expiration, and supply and demand.

The credit risk associated with the above derivative financial instruments relates to the potential for non-performance by counterparties. Although non-performance is not anticipated, in order to minimize the risk of loss, management monitors the creditworthiness of its counterparties and obtains collateral. The performance of exchange-traded instruments is guaranteed by the exchange on which they trade. For non-exchange-traded instruments, the counterparties are principally banks which must meet certain criteria according to our investment guidelines.

Interest rate swaps

We use interest rate swaps related to certain debt issuances for the purpose of either fixing and/or reducing borrowing costs.

Credit default swaps

A credit default swap is a bilateral contract under which two counterparties agree to isolate and separately trade the credit risk of at least one third-party reference entity. Under a credit default swap agreement, a protection buyer pays a periodic fee to a protection seller in exchange for a contingent payment by the seller upon a credit event (such as a default or failure to pay) related to the reference entity. When a credit event is triggered, the protection seller pays the protection buyer the difference between the fair value of assets and the principal amount. We have purchased a credit default swap to mitigate our global credit risk exposure to one of our reinsurers.

(iii) Convertible security investments

A convertible bond is a debt instrument that can be converted into a predetermined amount of the issuer's equity at certain times prior to the bond's maturity. The convertible option is an embedded derivative within the fixed maturity host instruments which are classified in the investment portfolio as available for sale. ACE purchases convertible bonds for their total return and not specifically for the conversion feature.

(iv) TBA

By acquiring a TBA, we make a commitment to purchase a future issuance of mortgage-backed securities. For the period between purchase of the TBA and issuance of the underlying security, we account for our position as a derivative in the consolidated financial statements. ACE purchases TBAs both for their total return and for the flexibility they provide related to our mortgage-backed security strategy.

(v) GLB

Under the GLB program, as the assuming entity, ACE is obligated to provide coverage until the expiration or maturity of the underlying annuities. Premiums received under the reinsurance treaties are classified as premium. Expected losses allocated to premiums received are classified as Future policy benefits and valued similar to GMDB reinsurance. Other changes in fair value, principally arising from changes in expected losses allocated to expected future premiums, are classified as Net realized gains (losses). Fair value represents management's estimate of exit price and thus, includes a risk margin. We may recognize a realized loss for other changes in fair value due to adverse changes in the capital markets (e.g., declining interest rates and/or declining equity markets) and changes in actual or estimated future policyholder behavior (e.g., increased annuitization or decreased lapse rates) although we expect the business to be profitable. We believe this presentation provides the most meaningful disclosure of changes in the underlying risk within the GLB reinsurance programs for a given reporting period.

b) Other investments

At March 31, 2012, included in Other investments in the consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $1,502 million. In connection with these investments, we have commitments that may require funding of up to $1,197 million over the next several years.

c) Taxation

In April 2012, ACE reached final settlement with the Internal Revenue Service (IRS) Appeals Division regarding several issues raised by the IRS Examination Division in its federal tax returns for 2005, 2006 and 2007. The settlement of these issues will have no net impact on our results of operations. The IRS commenced its field examination of ACE's federal tax returns for 2008 and 2009 during January 2011. It is reasonably possible that over the next twelve months, the amount of unrecognized tax benefits may change resulting from the re-evaluation of unrecognized tax benefits arising from examinations of taxing authorities and the closing of tax statutes of limitations. With few exceptions, ACE is no longer subject to state and local or non-U.S. income tax examinations for years before 2005.

d) Legal proceedings

(i) Claims and other litigation

Our insurance subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages and, in some jurisdictions, direct actions by allegedly-injured persons seeking damages from policyholders. These lawsuits, involving claims on policies issued by our subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in our loss and loss expense reserves. In addition to claims litigation, we are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct, employment claims, regulatory activity, or disputes arising from our business ventures. In the opinion of management, our ultimate liability for these matters is not likely to have a material adverse effect on our consolidated financial condition, although it is possible that the effect could be material to our consolidated results of operations for an individual reporting period.

(ii) Business practices litigation

ACE Limited, ACE INA Holdings Inc., and ACE USA, Inc., along with a number of other insurers and brokers, were named in a series of federal putative nationwide class actions brought by insurance policyholders. The Judicial Panel on Multidistrict Litigation (JPML) consolidated these cases in the District of New Jersey. On August 1, 2005, plaintiffs in the New Jersey consolidated proceedings filed two consolidated amended complaints – one concerning commercial insurance and the other concerning employee benefit plans. The employee benefit plans litigation against ACE Limited has been dismissed.

In the commercial insurance complaint, the plaintiffs named ACE Limited, ACE INA Holdings Inc., ACE USA, Inc., ACE American Insurance Co., Illinois Union Insurance Co., and Indemnity Insurance Co. of North America. They allege that certain brokers and insurers, including certain ACE entities, conspired to increase premiums and allocate customers through the use of "B" quotes and contingent commissions. In addition, they allege that the broker defendants received additional income by improperly placing their clients' business with insurers through related wholesale entities that acted as intermediaries between brokers and insurers. Plaintiffs also allege that broker defendants tied the purchase of primary insurance to the placement of such coverage with reinsurance carriers through the broker defendants' reinsurance broker subsidiaries. The complaint asserts the following causes of action against the ACE defendants: Federal Racketeer Influenced and Corrupt Organizations Act (RICO), federal antitrust law, state antitrust law, aiding and abetting breach of fiduciary duty, and unjust enrichment.

In 2006 and 2007, the Court dismissed plaintiffs' first two attempts to properly plead a case without prejudice and permitted plaintiffs one final opportunity to re-plead. The amended complaint, filed on May 22, 2007, purported to add several new ACE defendants: ACE Group Holdings, Inc., ACE US Holdings, Inc., Westchester Fire Insurance Company, INA Corporation, INA Financial Corporation, INA Holdings Corporation, ACE Property and Casualty Insurance Company, and Pacific Employers Insurance Company. Plaintiffs also added a new antitrust claim against Marsh, the ACE defendants, and other insurers based on the same allegations as the other claims but limited to excess casualty insurance. In 2007, the Court granted defendants' motions to dismiss plaintiffs' antitrust and RICO claims with prejudice. The Court also declined to exercise supplemental jurisdiction over plaintiffs' state law claims and dismissed those claims without prejudice. Plaintiffs appealed to the United States Court of Appeals for the Third Circuit. On August 16, 2010, the Third Circuit affirmed, in part, and vacated, in part, the District Court's previous dismissals with instructions for further briefing at the District Court on remand. Defendants renewed their motions consistent with the Third Circuit's instructions. On June 28, 2011, the District Court administratively terminated defendants' motions without prejudice to re-file after adjudication of issues related to a proposed class settlement involving a number of other parties and stayed the case. On October 17, 2011 the Court lifted the stay and indicated that it will issue a new scheduling order in the coming months. To date, the Court has still not entered a scheduling order.

As of May 1, 2012, plaintiffs have not specified an amount of alleged damages and the Court has not decided defendants' renewed motions to dismiss. The Court has also not determined if this case may proceed as a class action and has, therefore, not determined the size or scope of any class. As a result, ACE is unable to reasonably estimate the potential loss or range of losses, if any, arising from this litigation.

There are a number of federal actions brought by policyholders based on allegations similar to the allegations in the consolidated federal actions that were filed in, or transferred to, the United States District Court for the District of New Jersey for coordination ("tag-along cases"). On October 17, 2011 the Court lifted the stay and indicated that it will issue a new scheduling order. To date, the Court has still not entered a scheduling order.

•

New Cingular Wireless Headquarters LLC et al. v. Marsh & McLennan Companies, Inc. et al. (Case No. 06-5120; D.N.J.), was originally filed in the Northern District of Georgia on April 4, 2006. ACE Limited, ACE American Ins. Co., ACE USA, Inc., ACE Bermuda Insurance Ltd., Illinois Union Ins. Co., Pacific Employers Ins. Co., and Lloyd's of London Syndicate 2488 AGM, along with a number of other insurers and brokers, are named.

•

Avery Dennison Corp. v. Marsh & McLennan Companies, Inc. et al. (Case No. 07-00757; D.N.J.) was filed on February 13, 2007. ACE Limited, ACE INA Holdings Inc., ACE USA, Inc., and ACE American Insurance Co., along with a number of other insurers and brokers, are named.

•

Henley Management Co., Inc. et al. v. Marsh, Inc. et al. (Case No. 07-2389; D.N.J.) was filed on May 27, 2007. ACE USA, Inc., along with a number of other insurers and Marsh, Inc., are named.

•

Lincoln Adventures LLC et al. v. Those Certain Underwriters at Lloyd's, London Members of Syndicates 0033 et al. (Case No. 07-60991; D.N.J.) was originally filed in the Southern District of Florida on July 13, 2007. Supreme Auto Transport LLC et al. v. Certain Underwriters of Lloyd's of London, et al. (Case No. 07-6703; D.N.J.) was originally filed in the Southern District of New York on July 25, 2007. Lloyd's of London Syndicate 2488 AGM, along with a number of other Lloyd's of London Syndicates and various brokers, are named in both actions. The allegations in these putative class-action lawsuits are similar to the allegations in the consolidated federal actions identified above, although these lawsuits focus on alleged conduct within the London insurance market.

•

Sears, Roebuck & Co. et al. v. Marsh & McLennan Companies, Inc. et al. (Case No. 07-2535; D.N.J.) was originally filed in the Northern District of Georgia on October 12, 2007. ACE American Insurance Co., ACE Bermuda Insurance Ltd., and Westchester Surplus Lines Insurance Co., along with a number of other insurers and brokers, are named.

As of May 1, 2012 plaintiffs have not specified an amount of alleged damages in any of the tag-along cases. The proceedings in the tag-along cases were stayed at a very early stage, before the ACE defendants could challenge the sufficiency of the claims with, for example, motions to dismiss. Also, the scope of the tag-along cases, in large part, will be affected by the outcome of the Multidistrict Litigation Court's decision on defendants' renewed motions to dismiss. As a result, ACE is unable to reasonably estimate the potential loss or range of losses, if any, arising from these litigations.

In addition to the related federal cases, there are two pending state cases with allegations similar to those in the consolidated federal actions described above:

•

Van Emden Management Corporation v. Marsh & McLennan Companies, Inc., et al. (Case No. 05-0066A; Superior Court of Massachusetts), a class action in Massachusetts, was filed on January 13, 2005. Illinois Union Insurance Company is named. The Van Emden case has been stayed pending resolution of the consolidated proceedings in the District of New Jersey or until further order of the Court.

As of May 1, 2012, plaintiffs have not specified an amount of alleged damages in this case. The proceedings were stayed at a very early stage, before Illinois Union could challenge the sufficiency of the claims with, for example, a motion to dismiss. As a result, ACE is unable to reasonably estimate the potential loss or range of losses, if any, arising from this litigation.

•

State of Ohio, ex. rel. Marc E. Dann, Attorney General v. American Int'l Group, Inc. et al. (Case No. 07-633857; Court of Common Pleas in Cuyahoga County, Ohio) is an Ohio state action filed by the Ohio Attorney General on August 24, 2007. ACE INA Holdings Inc., ACE American Insurance Co., ACE Property & Casualty Insurance Co., Insurance Company of North America, and Westchester Fire Insurance Co., along with a number of other insurance companies and Marsh, are named. In December 2011 the ACE parties agreed to settle the case for $1.97 million. On December 27, 2011 the case was voluntarily dismissed with prejudice.

In all of the lawsuits described above, except where specifically noted, plaintiffs seek compensatory and in some cases special damages without specifying an amount. As a result, ACE cannot at this time estimate its potential costs related to these legal matters and, accordingly, no liability for compensatory damages has been established in the consolidated financial statements.

ACE's ultimate liability for these matters is not likely to have a material adverse effect on ACE's consolidated financial condition, although it is possible that the effect could be material to ACE's consolidated results of operations for an individual reporting period.

Shareholders' Equity

7. Shareholders' equity

All of ACE's Common Shares are authorized under Swiss corporate law. Though the par value of Common Shares is stated in Swiss francs, ACE continues to use U.S. dollars as its reporting currency for preparing the consolidated financial statements. Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value distributions) or from legal reserves, must be declared by ACE in Swiss francs though dividend payments are made by ACE in U.S. dollars. In light of a January 1, 2011 Swiss tax law change, shareholders at our May 2011 annual general meeting approved a dividend for the following year, payable in four quarterly installments after the May 2011 annual general meeting from our capital contributions reserves (additional paid in capital), a subaccount of legal reserves. In January 2012 our shareholders approved a $0.12 per Common Share increase to the third and fourth dividend installments. In the first quarter of 2012 the fourth dividend installment of CHF 0.42 ($0.47) per Common Share, was funded from capital contributions reserves (additional paid in capital) and transferred to free reserves (retained earnings) for payment.

For the three months ended March 31, 2011, dividends declared per Common Share amounted to CHF 0.30 ($0.33), and were paid by way of a par value distribution.

Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, grants of restricted stock, and purchases under the Employee Stock Purchase Plan (ESPP). At March 31, 2012, 4,179,030 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans.

ACE Limited securities repurchase authorization

In August 2011, the Board of Directors authorized the repurchase of up to $303 million of ACE's Common Shares through December 31, 2012. The amount authorized in August 2011 was in addition to the $197 million balance remaining under a $600 million share repurchase program approved in November 2010. These authorizations were granted to allow ACE to repurchase Common Shares to partially offset potential dilution from the exercise of stock options and the granting of restricted stock under share-based compensation plans. Such repurchases may be made in the open market, in privately negotiated transactions, block trades, accelerated repurchases and/or through option or other forward transactions. During the three months ended March 31, 2012, ACE repurchased an additional 100,000 Common Shares for a cost of $7 million. At March 31, 2012, $461 million in share repurchase authorization remained through December 31, 2012 pursuant to the November 2010 and August 2011 Board authorizations.

Share-Based Compensation

8. Share-based compensation

The ACE Limited 2004 Long-Term Incentive Plan (the 2004 LTIP) provides for grants of both incentive and non-qualified stock options principally at an option price per share equal to the fair value of ACE's Common Shares on the date of grant. Stock options are generally granted with a 3-year vesting period and a 10-year term. The stock options vest in equal annual installments over the respective vesting period, which is also the requisite service period. On February 23, 2012, ACE granted 1,452,605 stock options with a weighted-average grant date fair value of $15.58 each. The fair value of the options issued is estimated on the date of grant using the Black-Scholes option pricing model.

The 2004 LTIP also provides for grants of restricted stock and restricted stock units. ACE generally grants restricted stock and restricted stock units with a 4-year vesting period, based on a graded vesting schedule. The restricted stock is granted at market close price on the day of grant. On February 23, 2012, ACE granted 1,462,230 restricted stock awards and 255,850 restricted stock units to employees and officers of ACE and its subsidiaries with a grant date fair value of $73.35 each. Each restricted stock unit represents our obligation to deliver to the holder one Common Share upon vesting.

Segment Information

9.	Segment information

ACE operates through the following business segments, certain of which represent the aggregation of distinct operating segments: Insurance – North American, Insurance – Overseas General, Global Reinsurance, and Life. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business segments have established relationships with reinsurance intermediaries.

For segment reporting purposes, certain items have been presented in a different manner than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. ACE calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. For the Life business, management also includes Net investment income and (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting as components of underwriting income. For the three months ended March 31, 2012, Life underwriting income of $103 million includes net investment income of $61 million and (Gains) losses from fair value changes in separate account assets of $(18) million.

Effective January 1, 2012, we reclassified prior period segment operating results in order to conform to certain organizational realignments. These realignments resulted in a transfer of operating revenue and underwriting results of our international direct-marketed and credit life businesses from the Insurance – Overseas General segment to the Life segment. These realignments have no impact on consolidated operating results; however, previously reported amounts contained in these consolidated financial statements have been adjusted to conform to the current period presentation.

The following tables present the operations by segment:

Statement of Operations by Segment

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	Insurance – North American			Insurance – Overseas General		Global Reinsurance			Life			Corporate and Other			ACE Consolidated
Net premiums written	$	1,293		$	1,528	$	263		$	488		$	—		$	3,572
Net premiums earned		1,287			1,391		230			473			—			3,381
Losses and loss expenses		849			705		102			148			—			1,804
Policy benefits		—			—		—			147			—			147
Policy acquisition costs		127			335		43			76			1			582
Administrative expenses		147			229		12			78			44			510

Underwriting income (loss)		164			122		73			24			(45	)		338

Net investment income		274			131		71			61			7			544
Net realized gains (losses) including OTTI		(1	)		20		13			231			(3	)		260
Interest expense		3			1		1			3			54			62
Other (income) expense:
(Gains) losses from fair value changes in separate account assets		—			—		—			(18	)		—			(18	)
Other		(1	)		—		(5	)		9			12			15
Income tax expense (benefit)		91			38		6			11			(36	)		110

Net income (loss)	$	344		$	234	$	155		$	311		$	(71	)	$	973

Statement of Operations by Segment

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	Insurance – North American			Insurance – Overseas General			Global Reinsurance			Life			Corporate and Other			ACE Consolidated
Net premiums written	$	1,285		$	1,410		$	315		$	436		$	—		$	3,446
Net premiums earned		1,346			1,278			260			425			—			3,309
Losses and loss expenses		994			852			279			138			—			2,263
Policy benefits		—			—			—			91			—			91
Policy acquisition costs		136			301			46			76			—			559
Administrative expenses		148			223			12			74			42			499

Underwriting income (loss)		68			(98	)		(77	)		46			(42	)		(103	)

Net investment income		295			131			72			46			—			544
Net realized gains (losses) including OTTI		(11	)		(9	)		(13	)		(13	)		1			(45	)
Interest expense		4			1			—			3			55			63
Other (income) expense:		(16	)		(2	)		(6	)		6			5			(13	)
Income tax expense (benefit)		89			17			10			14			(34	)		96

Net income (loss)	$	275		$	8		$	(22	)	$	56		$	(67	)	$	250

Underwriting assets are reviewed in total by management for purposes of decision-making. Other than goodwill, ACE does not allocate assets to its segments.

The following table presents the net premiums earned for each segment by product:


	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
	(in millions of U.S. dollars)
For the Three Months Ended March 31, 2012
Insurance – North American	$	381	$	817	$	89	$	1,287
Insurance – Overseas General		538		333		520		1,391
Global Reinsurance		110		120		—		230
Life		—		—		473		473

	$	1,029	$	1,270	$	1,082	$	3,381


For the Three Months Ended March 31, 2011
Insurance – North American	$	370	$	890	$	86	$	1,346
Insurance – Overseas General		431		342		505		1,278
Global Reinsurance		112		148		—		260
Life		—		—		425		425

	$	913	$	1,380	$	1,016	$	3,309

Earnings Per Share

10.

Earnings per share

The following table presents the computation of basic and diluted earnings per share:


	Three Months Ended March 31
	2012		2011
	(in millions of U.S. dollars, except share and per share data)
Numerator:
Net income	$	973	$	250

Denominator:
Denominator for basic earnings per share:

Weighted-average shares outstanding		338,567,341		337,088,217
Denominator for diluted earnings per share:
Share-based compensation plans		3,123,641		2,572,982


Adjusted weighted-average shares outstanding and assumed conversions		341,690,982		339,661,199


Basic earnings per share	$	2.87	$	0.74


Diluted earnings per share	$	2.84	$	0.73

Excluded from adjusted weighted-average shares outstanding and assumed conversions is the impact of securities that would have been anti-dilutive during the respective periods. For the three months ended March 31, 2012 and 2011, the potential anti-dilutive share conversions were 468,048 shares and 333,072 shares, respectively.

Information Provided In Connection With Outstanding Debt Of Subsidiaries

11. Information provided in connection with outstanding debt of subsidiaries

The following tables present condensed consolidating financial information at March 31, 2012 and December 31, 2011, and for the three months ended March 31, 2012 and 2011, for ACE Limited (the Parent Guarantor) and ACE INA Holdings Inc. (the Subsidiary Issuer). The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor. Investments in subsidiaries are accounted for by the Parent Guarantor under the equity method for purposes of the supplemental consolidating presentation. Earnings of subsidiaries are reflected in the Parent Guarantor's investment accounts and earnings. The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer. Condensed consolidating financial information of the Subsidiary Issuer is presented on a consolidated basis and consists principally of the net assets, results of operations, and cash flows of operating insurance company subsidiaries.

Condensed Consolidating Balance Sheet at March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Assets
Investments	$	34	$	29,078	$	27,680		$	—		$	56,792
Cash		162		496		57			—			715
Insurance and reinsurance balances receivable		—		4,050		437			—			4,487
Reinsurance recoverable on losses and loss expenses		—		16,685		(4,628	)		—			12,057
Reinsurance recoverable on policy benefits		—		1,140		(897	)		—			243
Value of business acquired		—		669		—			—			669
Goodwill and other intangible assets		—		4,306		554			—			4,860
Investments in subsidiaries		25,197		—		—			(25,197	)		—
Due from subsidiaries and affiliates, net		376		—		—			(376	)		—
Other assets		15		7,683		2,228			—			9,926

Total assets	$	25,784	$	64,107	$	25,431		$	(25,573	)	$	89,749

Liabilities
Unpaid losses and loss expenses	$	—	$	30,691	$	6,556		$	—		$	37,247
Unearned premiums		—		5,726		938			—			6,664
Future policy benefits		—		3,766		592			—			4,358
Due to subsidiaries and affiliates, net		—		281		95			(376	)		—
Short-term debt		130		851		550			—			1,531
Long-term debt		—		3,360		—			—			3,360
Trust preferred securities		—		309		—			—			309
Other liabilities		223		8,233		2,393			—			10,849

Total liabilities		353		53,217		11,124			(376	)		64,318

Total shareholders' equity		25,431		10,890		14,307			(25,197	)		25,431

Total liabilities and shareholders' equity	$	25,784	$	64,107	$	25,431		$	(25,573	)	$	89,749

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Balance Sheet at December 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Assets
Investments	$	33	$	28,848	$	26,795		$	—		$	55,676
Cash		106		382		126			—			614
Insurance and reinsurance balances receivable		—		3,944		443			—			4,387
Reinsurance recoverable on losses and loss expenses		—		17,146		(4,757	)		—			12,389
Reinsurance recoverable on policy benefits		—		941		(692	)		—			249
Value of business acquired		—		676		—			—			676
Goodwill and other intangible assets		—		4,248		551			—			4,799
Investments in subsidiaries		23,871		—		—			(23,871	)		—
Due from subsidiaries and affiliates, net		498		—		—			(498	)		—
Other assets		8		7,018		1,505			—			8,531

Total assets	$	24,516	$	63,203	$	23,971		$	(24,369	)	$	87,321

Liabilities
Unpaid losses and loss expenses	$	—	$	30,837	$	6,640		$	—		$	37,477
Unearned premiums		—		5,416		918			—			6,334
Future policy benefits		—		3,673		601			—			4,274
Due to subsidiaries and affiliates, net		—		316		182			(498	)		—
Short-term debt		—		850		401			—			1,251
Long-term debt		—		3,360		—			—			3,360
Trust preferred securities		—		309		—			—			309
Other liabilities		184		7,769		2,031			—			9,984

Total liabilities		184		52,530		10,773			(498	)		62,989

Total shareholders' equity		24,332		10,673		13,198			(23,871	)		24,332

Total liabilities and shareholders' equity	$	24,516	$	63,203	$	23,971		$	(24,369	)	$	87,321

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾		Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net premiums written	$	—		$	2,098	$	1,474	$	—		$	3,572
Net premiums earned		—			1,952		1,429		—			3,381
Net investment income		—			265		279		—			544
Equity in earnings of subsidiaries		928			—		—		(928	)		—
Net realized gains including OTTI		20			26		214		—			260
Losses and loss expenses		—			1,182		622		—			1,804
Policy benefits		—			86		61		—			147
Policy acquisition costs and administrative expenses		12			640		440		—			1,092
Interest (income) expense		(9	)		66		5		—			62
Other (income) expense		(30	)		25		2		—			(3	)
Income tax expense		2			85		23		—			110

Net income	$	973		$	159	$	769	$	(928	)	$	973



Comprehensive income	$	1,271		$	287	$	641	$	(928	)	$	1,271

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net premiums written	$	—		$	2,023		$	1,423		$	—		$	3,446
Net premiums earned		—			1,938			1,371			—			3,309
Net investment income		1			262			281			—			544
Equity in earnings of subsidiaries		239			—			—			(239	)		—
Net realized gains (losses) including OTTI		(1	)		(13	)		(31	)		—			(45	)
Losses and loss expenses		—			1,301			962			—			2,263
Policy benefits		—			40			51			—			91
Policy acquisition costs and administrative expenses		18			588			452			—			1,058
Interest (income) expense		(8	)		67			4			—			63
Other (income) expense		(22	)		13			(4	)		—			(13	)
Income tax expense		1			68			27			—			96

Net income	$	250		$	110		$	129		$	(239	)	$	250



Comprehensive income	$	438		$	210		$	29		$	(239	)	$	438

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net cash flows from operating activities	$	19		$	66		$	487		$	—		$	572

Cash flows from investing activities
Purchases of fixed maturities available for sale		—			(2,650	)		(2,833	)		—			(5,483	)
Purchases of fixed maturities held to maturity		—			(31	)		(1	)		—			(32	)
Purchases of equity securities		—			(10	)		(9	)		—			(19	)
Sales of fixed maturities available for sale		—			1,935			1,860			—			3,795
Sales of equity securities		—			24			2			—			26
Maturities and redemptions of fixed maturities available for sale		—			497			579			—			1,076
Maturities and redemptions of fixed maturities held to maturity		—			267			78			—			345
Net derivative instruments settlements		(1	)		(1	)		(193	)		—			(195	)
Advances from (to) affiliates		66			—			—			(66	)		—
Acquisition of subsidiaries		—			(25	)		—			—			(25	)
Other		—			90			(193	)		—			(103	)

Net cash flows from (used for) investing activities		65			96			(710	)		(66	)		(615	)

Cash flows from financing activities
Dividends paid on Common Shares		(159	)		—			—			—			(159	)
Common Shares repurchased		—			—			(11	)		—			(11	)
Net proceeds from issuance (repayment) of short-term debt		130			1			150			—			281
Proceeds from share-based compensation plans		1			—			27			—			28
Advances (to) from affiliates		—			(48	)		(18	)		66			—

Net cash flows (used for) from financing activities		(28	)		(47	)		148			66			139

Effect of foreign currency rate changes on cash and cash equivalents		—			(1	)		6			—			5

Net increase (decrease) in cash		56			114			(69	)		—			101
Cash – beginning of period		106			382			126			—			614

Cash – end of period	$	162		$	496		$	57		$	—		$	715

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net cash flows from operating activities	$	509		$	217		$	777		$	(500	)	$	1,003

Cash flows from investing activities
Purchases of fixed maturities available for sale		—			(3,418	)		(3,815	)		—			(7,233	)
Purchases of fixed maturities held to maturity		—			(176	)		(1	)		—			(177	)
Purchases of equity securities		—			(121	)		(22	)		—			(143	)
Sales of fixed maturities available for sale		6			2,760			2,662			—			5,428
Sales of equity securities		—			307			10			—			317
Maturities and redemptions of fixed maturities available for sale		—			440			501			—			941
Maturities and redemptions of fixed maturities held to maturity		—			298			98			—			396
Net derivative instruments settlements		(1	)		4			(88	)		—			(85	)
Advances (to) from affiliates		(99	)		—			—			99			—
Acquisition of subsidiaries (net of cash acquired of $39)		—			(8	)		(37	)		—			(45	)
Other		—			(28	)		(2	)		—			(30	)

Net cash flows (used for) from investing activities		(94	)		58			(694	)		99			(631	)

Cash flows from financing activities
Dividends paid on Common Shares		(112	)		—			—			—			(112	)
Common Shares repurchased		—			—			(68	)		—			(68	)
Net proceeds from issuance (repayments) of short-term debt		(300	)		—			400			—			100
Proceeds from share-based compensation plans		43			—			—			—			43
Advances from (to) affiliates		—			127			(28	)		(99	)		—
Dividends to parent company		—			—			(500	)		500			—

Net cash flows (used for) from financing activities		(369	)		127			(196	)		401			(37	)

Effect of foreign currency rate changes on cash and cash equivalents		—			5			3			—			8

Net increase (decrease) in cash		46			407			(110	)		—			343
Cash – beginning of period⁽³⁾		308			573			(109	)		—			772

Cash – end of period⁽³⁾	$	354		$	980		$	(219	)	$	—		$	1,115

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

⁽³⁾

ACE maintains two notional multi-currency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At March 31, 2011 and December 31, 2010, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Summary Of Significant Accounting Policies (Policy)

Basis Of Presentation

ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its various subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through the following business segments: Insurance – North American, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 9 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE and its subsidiaries (collectively, ACE, we, us, or our), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions have been eliminated.

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2011 Form 10-K.

Effective January 1, 2012, we retrospectively adopted new accounting guidance for costs associated with acquiring or renewing insurance contracts. Under the new guidance, the definition of acquisition costs was modified to specify that a cost must be directly related to the successful acquisition of a new or renewal insurance contract in order to be deferred. Previously reported amounts contained in these consolidated financial statements have been adjusted to reflect the impact of retrospective adjustments as a result of applying this new accounting guidance.

Deferred Policy Acquisition Costs And Value Of Business Acquired (VOBA)

Policy acquisition costs consist of commissions, premium taxes, and certain underwriting costs related directly to the successful acquisition of a new or renewal insurance contract. A VOBA intangible asset is established upon the acquisition of blocks of long duration contracts and represents the present value of estimated net cash flows for the contracts in force at the time of the acquisition. Acquisition costs and VOBA, collectively policy acquisition costs, are deferred and amortized. Policy acquisition costs on property and casualty (P&C) contracts are generally amortized ratably over the period in which premiums are earned. Policy acquisition costs on long duration contracts are amortized over the estimated life of the contracts, generally in proportion to premium revenue recognized. Policy acquisition costs are reviewed to determine if they are recoverable from future income, including investment income. Unrecoverable costs are expensed in the period identified.

Advertising costs are expensed as incurred except for direct-response campaigns that meet the criteria of the new guidance, principally related to accident and health (A&H) business produced by the Insurance – Overseas General segment, which are deferred and recognized as a component of policy acquisition costs. For individual direct-response marketing campaigns that we can demonstrate have specifically resulted in incremental sales to customers and such sales have probable future economic benefits, incremental costs directly related to the marketing campaigns are capitalized. Deferred marketing costs are reviewed regularly for recoverability from future income, including investment income, and amortized in proportion to premium revenue recognized, primarily over a ten year period.

Investments (Tables)

Schedule Of Amortized Cost And Fair Value Of Fixed Maturities And Related OTTI Recognized In AOCI


March 31, 2012
	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
	(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	3,012	$	139	$	(10	)	$	3,141	$	—
Foreign		12,417		507		(38	)		12,886		(2	)
Corporate securities		14,452		878		(66	)		15,264		(12	)
Mortgage-backed securities		9,721		392		(97	)		10,016		(119	)
States, municipalities, and political subdivisions		2,059		109		(7	)		2,161		—

	$	41,661	$	2,025	$	(218	)	$	43,468	$	(133	)


Held to maturity
U.S. Treasury and agency	$	1,081	$	40	$	—		$	1,121	$	—
Foreign		941		20		(6	)		955		—
Corporate securities		2,298		64		(8	)		2,354		—
Mortgage-backed securities		2,693		93		(2	)		2,784		—
States, municipalities, and political subdivisions		1,104		34		(4	)		1,134		—

	$	8,117	$	251	$	(20	)	$	8,348	$	—


	December 31, 2011
	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
	(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,774	$	186	$	—		$	2,960	$	—
Foreign		12,025		475		(99	)		12,401		(2	)
Corporate securities		14,055		773		(135	)		14,693		(22	)
Mortgage-backed securities		9,979		397		(175	)		10,201		(151	)
States, municipalities, and political subdivisions		1,617		96		(1	)		1,712		—

	$	40,450	$	1,927	$	(410	)	$	41,967	$	(175	)


Held to maturity
U.S. Treasury and agency	$	1,078	$	48	$	—		$	1,126	$	—
Foreign		935		18		(23	)		930		—
Corporate securities		2,338		44		(45	)		2,337		—
Mortgage-backed securities		2,949		90		(3	)		3,036		—
States, municipalities, and political subdivisions		1,147		32		(3	)		1,176		—

	$	8,447	$	232	$	(74	)	$	8,605	$	—

Schedule Of Fixed Maturities By Contractual Maturity


	March 31, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions of U.S. dollars)
Available for sale
Due in 1 year or less	$	2,324	$	2,354	$	2,321	$	2,349
Due after 1 year through 5 years		12,606		13,091		12,325		12,722
Due after 5 years through 10 years		13,180		13,929		12,379		12,995
Due after 10 years		3,830		4,078		3,446		3,700

		31,940		33,452		30,471		31,766
Mortgage-backed securities		9,721		10,016		9,979		10,201

	$	41,661	$	43,468	$	40,450	$	41,967


Held to maturity
Due in 1 year or less	$	591	$	598	$	393	$	396
Due after 1 year through 5 years		1,922		1,967		2,062		2,090
Due after 5 years through 10 years		2,242		2,307		2,376		2,399
Due after 10 years		669		692		667		684

		5,424		5,564		5,498		5,569
Mortgage-backed securities		2,693		2,784		2,949		3,036

	$	8,117	$	8,348	$	8,447	$	8,605

Schedule Of Cost And Fair Value Of Equity Securities


	March 31 2012			December 31 2011
	(in millions of U.S. dollars)
Cost	$	662		$	671
Gross unrealized appreciation		29			18
Gross unrealized depreciation		(12	)		(42	)

Fair value	$	679		$	647

Schedule Of Net Realized Gains (Losses) And The Losses Included In Net Realized Gains (Losses) And OCI


	Three Months Ended March 31
	2012			2011
	(in millions of U.S. dollars)
Fixed maturities:
OTTI on fixed maturities, gross	$	(7	)	$	(5	)
OTTI on fixed maturities recognized in OCI (pre-tax)		—			1

OTTI on fixed maturities, net		(7	)		(4	)
Gross realized gains excluding OTTI		112			109
Gross realized losses excluding OTTI		(71	)		(56	)

Total fixed maturities		34			49


Equity securities:
OTTI on equity securities		(1	)		—
Gross realized gains excluding OTTI		2			8
Gross realized losses excluding OTTI		—			(1	)

Total equity securities		1			7


OTTI on other investments		(2	)		—
Foreign exchange losses		(5	)		(79	)
Investment and embedded derivative instruments		42			(20	)
Fair value adjustments on insurance derivative		428			71
S&P put options and futures		(231	)		(71	)
Other derivative instruments		(5)			(1)
Other		(2	)		(1	)

Net realized gains (losses)	$	260		$	(45	)

Schedule Of Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which A Portion Of OTTI Was Recognized In OCI


	Three Months Ended March 31
	2012			2011
	(in millions of U.S. dollars)
Balance of credit losses related to securities still held - beginning of period	$	74		$	137
Additions where no OTTI was previously recorded		1			—
Additions where an OTTI was previously recorded		5			1
Reductions for securities sold during the period		(25	)		(42	)

Balance of credit losses related to securities still held - end of period	$	55		$	96

Schedule Of Aggregate Fair Value And Gross Unrealized Loss By Length Of Time The Security Has Continuously Been In An Unrealized Loss Position


	0 – 12 Months					Over 12 Months					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in millions of U.S. dollars)
March 31, 2012
U.S. Treasury and agency	$	820	$	(9.5	)	$	—	$	—		$	820	$	(9.5	)
Foreign		1,558		(25.7	)		430		(18.3	)		1,988		(44.0	)
Corporate securities		1,937		(56.4	)		201		(17.8	)		2,138		(74.2	)
Mortgage-backed securities		464		(4.4	)		500		(95.0	)		964		(99.4	)
States, municipalities, and political subdivisions		480		(7.2	)		62		(3.5	)		542		(10.7	)

Total fixed maturities		5,259		(103.2	)		1,193		(134.6	)		6,452		(237.8	)
Equity securities		489		(12.0	)		—		—			489		(12.0	)
Other investments		156		(5.7	)		—		—			156		(5.7	)

Total	$	5,904	$	(120.9	)	$	1,193	$	(134.6	)	$	7,097	$	(255.5	)


	0 – 12 Months					Over 12 Months					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in millions of U.S. dollars)
December 31, 2011
Foreign	$	1,801	$	(82.2	)	$	529	$	(40.0	)	$	2,330	$	(122.2	)
Corporate securities		3,084		(148.2	)		268		(32.2	)		3,352		(180.4	)
Mortgage-backed securities		440		(7.5	)		586		(170.2	)		1,026		(177.7	)
States, municipalities, and political subdivisions		30		(0.4	)		98		(3.5	)		128		(3.9	)

Total fixed maturities		5,355		(238.3	)		1,481		(245.9	)		6,836		(484.2	)
Equity securities		484		(42.3	)		—		—			484		(42.3	)
Other investments		88		(8.3	)		—		—			88		(8.3	)

Total	$	5,927	$	(288.9	)	$	1,481	$	(245.9	)	$	7,408	$	(534.8	)

Schedule Of Components Of Restricted Assets


	March 31 2012		December 31 2011
	(in millions of U.S. dollars)
Trust funds	$	10,605	$	9,940
Deposits with non-U.S. regulatory authorities		2,126		2,240
Deposits with U.S. regulatory authorities		1,293		1,307
Assets pledged under reverse repurchase agreements		1,401		1,251
Other pledged assets		451		364

	$	15,876	$	15,102

Fair Value Measurements (Tables)

Financial Instruments Measured At Fair Value On A Recurring Basis


	Level 1			Level 2		Level 3			Total
	(in millions of U.S. dollars)
March 31, 2012
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,762		$	1,379	$	—		$	3,141
Foreign		203			12,634		49			12,886
Corporate securities		23			15,124		117			15,264
Mortgage-backed securities		—			9,997		19			10,016
States, municipalities, and political subdivisions		—			2,160		1			2,161

		1,988			41,294		186			43,468

Equity securities		669			—		10			679
Short-term investments		1,344			755		—			2,099
Other investments		236			239		1,954			2,429
Securities lending collateral		—			2,204		—			2,204
Investment derivative instruments		12			—		—			12
Other derivative instruments		(78	)		37		(1	)		(42	)
Separate account assets		764			56		—			820

Total assets measured at fair value	$	4,935		$	44,585	$	2,149		$	51,669

Liabilities:
GLB⁽¹⁾	$	—		$	—	$	863		$	863

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.


	Level 1			Level 2		Level 3		Total
	(in millions of U.S. dollars)
December 31, 2011
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,691		$	1,264	$	5	$	2,960
Foreign		212			12,156		33		12,401
Corporate securities		20			14,539		134		14,693
Mortgage-backed securities		—			10,173		28		10,201
States, municipalities, and political subdivisions		—			1,711		1		1,712

		1,923			39,843		201		41,967

Equity securities		632			2		13		647
Short-term investments		1,246			1,055		—		2,301
Other investments		208			229		1,877		2,314
Securities lending collateral		—			1,375		—		1,375
Investment derivative instruments		10			—		—		10
Other derivative instruments		(16	)		54		3		41
Separate account assets		607			53		—		660

Total assets measured at fair value	$	4,610		$	42,611	$	2,094	$	49,315

Liabilities:
GLB⁽¹⁾	$	—		$	—	$	1,319	$	1,319

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

Fair Value And Maximum Future Funding Commitments Related To Investments


	Expected Liquidation Period		March 31, 2012				December 31, 2011
	Expected Liquidation Period		Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
			(in millions of U.S. dollars)
Financial		5 to 9 Years	$	207	$	135	$	205	$	141
Real estate		3 to 9 Years		282		147		270		96
Distressed		6 to 9 Years		189		52		182		57
Mezzanine		6 to 9 Years		227		337		195		282
Traditional		3 to 8 Years		579		525		565		200
Vintage		1 to 3 Years		18		1		18		1
Investment funds		Not Applicable		383		—		378		—

			$	1,885	$	1,197	$	1,813	$	777

Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations

(in millions of U.S. dollars)

Fair
Value at
March 31,
2012

Valuation
Technique

Significant
Unobservable Inputs

Ranges

GLB⁽¹⁾

$

863

Actuarial model

Lapse rate

1%- 30%

Annuitization rate

0%- 50%

⁽¹⁾	Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs


	Three Months Ended March 31, 2012
	Assets																							Liabilities
	Available-for-Sale Debt Securities														Equity securities			Other investments			Other derivative instruments			GLB⁽¹⁾
	U.S. Treasury and Agency			Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions		Equity securities			Other investments			Other derivative instruments			GLB⁽¹⁾
				(in millions of U.S. dollars)
Balance-Beginning of Period	$	5		$	33		$	134		$	28		$	1	$	13		$	1,877		$	3		$	1,319
Transfers out of Level 3		(5	)		(1	)		(7	)		(12	)		—		—			—			—			—
Change in Net Unrealized Gains (Losses) included in OCI		—			—			2			—			—		1			9			—			—
Net Realized Gains/Losses		—			—			—			—			—		—			(2	)		(3	)		(456	)
Purchases		—			34			3			4			—		1			113			—			—
Sales		—			(17	)		(8	)		—			—		(5	)		(2	)		—			—
Settlements		—			—			(7	)		(1	)		—		—			(41	)		(1	)		—

Balance-End of Period	$	—		$	49		$	117		$	19		$	1	$	10		$	1,954		$	(1	)	$	863

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	—		$	(2	)	$	(3	)	$	(456	)

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.


	Three Months Ended March 31, 2011
	Assets																				Liabilities
	Available-for-Sale Debt Securities												Equity securities			Other investments		Other derivative instruments			GLB⁽¹⁾
	Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions			Equity securities			Other investments		Other derivative instruments			GLB⁽¹⁾
	(in millions of U.S. dollars)
Balance-Beginning of Period	$	26		$	115		$	39		$	2		$	13		$	1,432	$	4		$	507
Transfers into Level 3		4			5			1			—			—			—		—			—
Transfers out of Level 3		(1	)		(4	)		—			—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI		(1	)		1			—			—			(1	)		42		—			—
Net Realized Gains/Losses		—			(1	)		—			—			2			—		1			(58	)
Purchases		—			19			46			—			—			90		—			—
Sales		(1	)		(19	)		(3	)		—			(4	)		—		—			—
Settlements		(1	)		(3	)		(2	)		(1	)		—			—		(1	)		—

Balance-End of Period	$	26		$	113		$	81		$	1		$	10		$	1,564	$	4		$	449

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	—	$	1		$	(58	)

⁽¹⁾

Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $596 million at March 31, 2011, and $648 million at December 31, 2010, which includes a fair value derivative adjustment of $449 million and $507 million, respectively.

Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value


	March 31, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions of U.S. dollars)
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	1,081	$	1,121	$	1,078	$	1,126
Foreign		941		955		935		930
Corporate securities		2,298		2,354		2,338		2,337
Mortgage-backed securities		2,693		2,784		2,949		3,036
States, municipalities, and political subdivisions		1,104		1,134		1,147		1,176

		8,117		8,348		8,447		8,605
Partially-owned insurance companies		346		346		352		352

Total assets		8,463		8,694		8,799		8,957

Liabilities:
Short-term debt		1,531		1,531		1,251		1,251
Long-term debt		3,360		3,878		3,360		3,823
Trust preferred securities		309		404		309		404

Total liabilities	$	5,200	$	5,813	$	4,920	$	5,478

Financial Instruments Not Carried At Fair Value


	Level 1		Level 2		Level 3		Total
	(in millions of U.S. dollars)
March 31, 2012
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	570	$	551	$	—	$	1,121
Foreign		—		955		—		955
Corporate securities		—		2,338		16		2,354
Mortgage-backed securities		—		2,784		—		2,784
States, municipalities, and political subdivisions		—		1,134		—		1,134

		570		7,762		16		8,348
Partially-owned insurance companies		—		—		346		346

Total assets		570		7,762		362		8,694

Liabilities:
Short-term debt		—		1,531		—		1,531
Long-term debt		—		3,878		—		3,878
Trust preferred securities		—		404		—		404

Total liabilities	$	—	$	5,813	$	—	$	5,813

Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Tables)

Schedule Of Guaranteed Minimum Death Benefits And Guaranteed Minimum Income Benefits Income And Expense


	Three Months Ended March 31
	2012		2011
	(in millions of U.S. dollars)
GMDB
Net premiums earned	$	23	$	26
Policy benefits and other reserve adjustments	$	27	$	22
GLB
Net premiums earned	$	41	$	41
Policy benefits and other reserve adjustments		4		6
Net realized gains (losses)		458		58

Gain recognized in income	$	495	$	93
Net cash received	$	39	$	41
Net decrease in liability	$	456	$	52

Commitments, Contingencies, And Guarantees (Tables)

Balance Sheet Locations, Fair Values In An Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments


			March 31, 2012					December 31, 2011
	Consolidated Balance Sheet Location		Fair Value			Notional Value/ Payment Provision		Fair Value			Notional Value/ Payment Provision
			(in millions of U.S. dollars)
Investment and embedded derivative instruments
Foreign currency forward contracts		AP	$	(2	)	$	681	$	7		$	674
Futures contracts on money market instruments		AP		1			2,077		7			10,476
Futures contracts on notes and bonds		AP		12			942		(4	)		1,055
Options on money market instruments		AP		1			3,192		—			292
Convertible bonds		FM AFS		400			374		357			353
TBAs		FM AFS		54			53		60			56

			$	466		$	7,319	$	427		$	12,906

Other derivative instruments
Futures contracts on equities⁽¹⁾		AP	$	(78	)	$	2,209	$	(16	)	$	1,367
Options on equity market indices⁽¹⁾		AP		37			250		54			250
Credit default swaps		AP		(1	)		350		3			350
Other		AP		—			6		—			6

			$	(42	)	$	2,815	$	41		$	1,973


GLB⁽²⁾		AP/FPB	$	(1,049	)	$	881	$	(1,505	)	$	1,378

⁽¹⁾	Related to GMDB and GLB blocks of business.

⁽²⁾	Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 c) for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations


	Three Months Ended March 31
	2012			2011
	2012			2011
	(in millions of U.S. dollars)
Investment and embedded derivative instruments
Foreign currency forward contracts	$	(8	)	$	(15	)
All other futures contracts and options		26			(3	)
Convertible bonds		24			(1	)
TBAs		—			(1	)

Total investment and embedded derivative instruments	$	42		$	(20	)

GLB and other derivative instruments
GLB⁽¹⁾	$	428		$	71
Futures contracts on equities⁽²⁾		(213	)		(63	)
Options on equity market indices⁽²⁾		(18	)		(8	)
Credit default swaps		(5	)		(1	)

Total GLB and other derivative instruments	$	192		$	(1	)

	$	234		$	(21	)

⁽¹⁾	Excludes foreign exchange gains (losses) related to GLB.

⁽²⁾	Related to GMDB and GLB blocks of business

Segment Information (Tables)

Operations By Segment

Statement of Operations by Segment

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	Insurance – North American			Insurance – Overseas General		Global Reinsurance			Life			Corporate and Other			ACE Consolidated
Net premiums written	$	1,293		$	1,528	$	263		$	488		$	—		$	3,572
Net premiums earned		1,287			1,391		230			473			—			3,381
Losses and loss expenses		849			705		102			148			—			1,804
Policy benefits		—			—		—			147			—			147
Policy acquisition costs		127			335		43			76			1			582
Administrative expenses		147			229		12			78			44			510

Underwriting income (loss)		164			122		73			24			(45	)		338

Net investment income		274			131		71			61			7			544
Net realized gains (losses) including OTTI		(1	)		20		13			231			(3	)		260
Interest expense		3			1		1			3			54			62
Other (income) expense:
(Gains) losses from fair value changes in separate account assets		—			—		—			(18	)		—			(18	)
Other		(1	)		—		(5	)		9			12			15
Income tax expense (benefit)		91			38		6			11			(36	)		110

Net income (loss)	$	344		$	234	$	155		$	311		$	(71	)	$	973

Statement of Operations by Segment

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	Insurance – North American			Insurance – Overseas General			Global Reinsurance			Life			Corporate and Other			ACE Consolidated
Net premiums written	$	1,285		$	1,410		$	315		$	436		$	—		$	3,446
Net premiums earned		1,346			1,278			260			425			—			3,309
Losses and loss expenses		994			852			279			138			—			2,263
Policy benefits		—			—			—			91			—			91
Policy acquisition costs		136			301			46			76			—			559
Administrative expenses		148			223			12			74			42			499

Underwriting income (loss)		68			(98	)		(77	)		46			(42	)		(103	)

Net investment income		295			131			72			46			—			544
Net realized gains (losses) including OTTI		(11	)		(9	)		(13	)		(13	)		1			(45	)
Interest expense		4			1			—			3			55			63
Other (income) expense:		(16	)		(2	)		(6	)		6			5			(13	)
Income tax expense (benefit)		89			17			10			14			(34	)		96

Net income (loss)	$	275		$	8		$	(22	)	$	56		$	(67	)	$	250

Net Premiums Earned For Segment By Product


	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
	(in millions of U.S. dollars)
For the Three Months Ended March 31, 2012
Insurance – North American	$	381	$	817	$	89	$	1,287
Insurance – Overseas General		538		333		520		1,391
Global Reinsurance		110		120		—		230
Life		—		—		473		473

	$	1,029	$	1,270	$	1,082	$	3,381


For the Three Months Ended March 31, 2011
Insurance – North American	$	370	$	890	$	86	$	1,346
Insurance – Overseas General		431		342		505		1,278
Global Reinsurance		112		148		—		260
Life		—		—		425		425

	$	913	$	1,380	$	1,016	$	3,309

Earnings Per Share (Tables)

Schedule Of Earnings Per Share, Basic And Diluted


	Three Months Ended March 31
	2012		2011
	(in millions of U.S. dollars, except share and per share data)
Numerator:
Net income	$	973	$	250

Denominator:
Denominator for basic earnings per share:

Weighted-average shares outstanding		338,567,341		337,088,217
Denominator for diluted earnings per share:
Share-based compensation plans		3,123,641		2,572,982


Adjusted weighted-average shares outstanding and assumed conversions		341,690,982		339,661,199


Basic earnings per share	$	2.87	$	0.74


Diluted earnings per share	$	2.84	$	0.73

Information Provided In Connection With Outstanding Debt Of Subsidiaries (Tables)

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet at March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Assets
Investments	$	34	$	29,078	$	27,680		$	—		$	56,792
Cash		162		496		57			—			715
Insurance and reinsurance balances receivable		—		4,050		437			—			4,487
Reinsurance recoverable on losses and loss expenses		—		16,685		(4,628	)		—			12,057
Reinsurance recoverable on policy benefits		—		1,140		(897	)		—			243
Value of business acquired		—		669		—			—			669
Goodwill and other intangible assets		—		4,306		554			—			4,860
Investments in subsidiaries		25,197		—		—			(25,197	)		—
Due from subsidiaries and affiliates, net		376		—		—			(376	)		—
Other assets		15		7,683		2,228			—			9,926

Total assets	$	25,784	$	64,107	$	25,431		$	(25,573	)	$	89,749

Liabilities
Unpaid losses and loss expenses	$	—	$	30,691	$	6,556		$	—		$	37,247
Unearned premiums		—		5,726		938			—			6,664
Future policy benefits		—		3,766		592			—			4,358
Due to subsidiaries and affiliates, net		—		281		95			(376	)		—
Short-term debt		130		851		550			—			1,531
Long-term debt		—		3,360		—			—			3,360
Trust preferred securities		—		309		—			—			309
Other liabilities		223		8,233		2,393			—			10,849

Total liabilities		353		53,217		11,124			(376	)		64,318

Total shareholders' equity		25,431		10,890		14,307			(25,197	)		25,431

Total liabilities and shareholders' equity	$	25,784	$	64,107	$	25,431		$	(25,573	)	$	89,749

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Balance Sheet at December 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Assets
Investments	$	33	$	28,848	$	26,795		$	—		$	55,676
Cash		106		382		126			—			614
Insurance and reinsurance balances receivable		—		3,944		443			—			4,387
Reinsurance recoverable on losses and loss expenses		—		17,146		(4,757	)		—			12,389
Reinsurance recoverable on policy benefits		—		941		(692	)		—			249
Value of business acquired		—		676		—			—			676
Goodwill and other intangible assets		—		4,248		551			—			4,799
Investments in subsidiaries		23,871		—		—			(23,871	)		—
Due from subsidiaries and affiliates, net		498		—		—			(498	)		—
Other assets		8		7,018		1,505			—			8,531

Total assets	$	24,516	$	63,203	$	23,971		$	(24,369	)	$	87,321

Liabilities
Unpaid losses and loss expenses	$	—	$	30,837	$	6,640		$	—		$	37,477
Unearned premiums		—		5,416		918			—			6,334
Future policy benefits		—		3,673		601			—			4,274
Due to subsidiaries and affiliates, net		—		316		182			(498	)		—
Short-term debt		—		850		401			—			1,251
Long-term debt		—		3,360		—			—			3,360
Trust preferred securities		—		309		—			—			309
Other liabilities		184		7,769		2,031			—			9,984

Total liabilities		184		52,530		10,773			(498	)		62,989

Total shareholders' equity		24,332		10,673		13,198			(23,871	)		24,332

Total liabilities and shareholders' equity	$	24,516	$	63,203	$	23,971		$	(24,369	)	$	87,321

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement Of Operations

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries and Eliminations⁽¹⁾		Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net premiums written	$	—		$	2,098	$	1,474	$	—		$	3,572
Net premiums earned		—			1,952		1,429		—			3,381
Net investment income		—			265		279		—			544
Equity in earnings of subsidiaries		928			—		—		(928	)		—
Net realized gains including OTTI		20			26		214		—			260
Losses and loss expenses		—			1,182		622		—			1,804
Policy benefits		—			86		61		—			147
Policy acquisition costs and administrative expenses		12			640		440		—			1,092
Interest (income) expense		(9	)		66		5		—			62
Other (income) expense		(30	)		25		2		—			(3	)
Income tax expense		2			85		23		—			110

Net income	$	973		$	159	$	769	$	(928	)	$	973



Comprehensive income	$	1,271		$	287	$	641	$	(928	)	$	1,271

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net premiums written	$	—		$	2,023		$	1,423		$	—		$	3,446
Net premiums earned		—			1,938			1,371			—			3,309
Net investment income		1			262			281			—			544
Equity in earnings of subsidiaries		239			—			—			(239	)		—
Net realized gains (losses) including OTTI		(1	)		(13	)		(31	)		—			(45	)
Losses and loss expenses		—			1,301			962			—			2,263
Policy benefits		—			40			51			—			91
Policy acquisition costs and administrative expenses		18			588			452			—			1,058
Interest (income) expense		(8	)		67			4			—			63
Other (income) expense		(22	)		13			(4	)		—			(13	)
Income tax expense		1			68			27			—			96

Net income	$	250		$	110		$	129		$	(239	)	$	250



Comprehensive income	$	438		$	210		$	29		$	(239	)	$	438

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement Of Cash Flows

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2012

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net cash flows from operating activities	$	19		$	66		$	487		$	—		$	572

Cash flows from investing activities
Purchases of fixed maturities available for sale		—			(2,650	)		(2,833	)		—			(5,483	)
Purchases of fixed maturities held to maturity		—			(31	)		(1	)		—			(32	)
Purchases of equity securities		—			(10	)		(9	)		—			(19	)
Sales of fixed maturities available for sale		—			1,935			1,860			—			3,795
Sales of equity securities		—			24			2			—			26
Maturities and redemptions of fixed maturities available for sale		—			497			579			—			1,076
Maturities and redemptions of fixed maturities held to maturity		—			267			78			—			345
Net derivative instruments settlements		(1	)		(1	)		(193	)		—			(195	)
Advances from (to) affiliates		66			—			—			(66	)		—
Acquisition of subsidiaries		—			(25	)		—			—			(25	)
Other		—			90			(193	)		—			(103	)

Net cash flows from (used for) investing activities		65			96			(710	)		(66	)		(615	)

Cash flows from financing activities
Dividends paid on Common Shares		(159	)		—			—			—			(159	)
Common Shares repurchased		—			—			(11	)		—			(11	)
Net proceeds from issuance (repayment) of short-term debt		130			1			150			—			281
Proceeds from share-based compensation plans		1			—			27			—			28
Advances (to) from affiliates		—			(48	)		(18	)		66			—

Net cash flows (used for) from financing activities		(28	)		(47	)		148			66			139

Effect of foreign currency rate changes on cash and cash equivalents		—			(1	)		6			—			5

Net increase (decrease) in cash		56			114			(69	)		—			101
Cash – beginning of period		106			382			126			—			614

Cash – end of period	$	162		$	496		$	57		$	—		$	715

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2011

(in millions of U.S. dollars)


	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations⁽¹⁾			Consolidating Adjustments⁽²⁾			ACE Limited Consolidated
Net cash flows from operating activities	$	509		$	217		$	777		$	(500	)	$	1,003

Cash flows from investing activities
Purchases of fixed maturities available for sale		—			(3,418	)		(3,815	)		—			(7,233	)
Purchases of fixed maturities held to maturity		—			(176	)		(1	)		—			(177	)
Purchases of equity securities		—			(121	)		(22	)		—			(143	)
Sales of fixed maturities available for sale		6			2,760			2,662			—			5,428
Sales of equity securities		—			307			10			—			317
Maturities and redemptions of fixed maturities available for sale		—			440			501			—			941
Maturities and redemptions of fixed maturities held to maturity		—			298			98			—			396
Net derivative instruments settlements		(1	)		4			(88	)		—			(85	)
Advances (to) from affiliates		(99	)		—			—			99			—
Acquisition of subsidiaries (net of cash acquired of $39)		—			(8	)		(37	)		—			(45	)
Other		—			(28	)		(2	)		—			(30	)

Net cash flows (used for) from investing activities		(94	)		58			(694	)		99			(631	)

Cash flows from financing activities
Dividends paid on Common Shares		(112	)		—			—			—			(112	)
Common Shares repurchased		—			—			(68	)		—			(68	)
Net proceeds from issuance (repayments) of short-term debt		(300	)		—			400			—			100
Proceeds from share-based compensation plans		43			—			—			—			43
Advances from (to) affiliates		—			127			(28	)		(99	)		—
Dividends to parent company		—			—			(500	)		500			—

Net cash flows (used for) from financing activities		(369	)		127			(196	)		401			(37	)

Effect of foreign currency rate changes on cash and cash equivalents		—			5			3			—			8

Net increase (decrease) in cash		46			407			(110	)		—			343
Cash – beginning of period⁽³⁾		308			573			(109	)		—			772

Cash – end of period⁽³⁾	$	354		$	980		$	(219	)	$	—		$	1,115

⁽¹⁾	Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾	Includes ACE Limited parent company eliminations.

⁽³⁾

ACE maintains two notional multi-currency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At March 31, 2011 and December 31, 2010, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

12 Months Ended

3 Months Ended

12 Months Ended

Mar. 31, 2012

Y

Mar. 31, 2011

Dec. 31, 2011

Deferred Policy Acquisition Costs [Member]

Dec. 31, 2010

Retained Earnings [Member]

Dec. 31, 2011

Retained Earnings [Member]

Dec. 31, 2010

Retained Earnings [Member]

Summary Of Significant Accounting Policies [Line Items]

Effect Of Adjustment Of Adoption Of New Accounting Guidance

$ 139

Deferred policy acquisition costs

1,649

1,548

Cumulative effect of change in accounting principle

213

181

New accounting pronouncement effect of change on net income

$ 10

Deferred marketing costs recoverability and amortized years

10

Acquisitions (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2011

New York Life Korea And Hong Kong [Member]

Nov. 30, 2011

Penn Millers Holding Corporation [Member]

state

Noncash or Part Noncash Acquisitions [Line Items]

Acquisition purchase price

$ 450

$ 107

Goodwill generated in acquisitions

91

Goodwill expected to be deductible for income tax

0

Other intangible assets generated in acquisition

$ 163

Number of states with operating facilities

34

Investments (Narrative) (Details) (USD $)

3 Months Ended

Mar. 31, 2012

security

Mar. 31, 2011

Dec. 31, 2011

Investments [Abstract]

Net unrealized appreciation (depreciation) included in OCI

$ 68,000,000

$ 18,000,000

Net unrealized depreciation included in AOCI

87,000,000

155,000,000

Percentage of mortgage-backed securities represented by investments in US government agency bonds

85.00%

84.00%

Credit losses recognized in net income for corporate securities

3,000,000

0

Credit losses in net income relating to mortgage-backed securities

3,000,000

1,000,000

Number of fixed maturities in an unrealized loss position

2,900

Total number of fixed maturities

22,584

Largest single unrealized loss in the fixed maturities

7,000,000

Number of equity securities in an unrealized loss position

62

Total number of equity securities

174

Largest single unrealized loss in the equity securities

8,000,000

Restricted assets in fixed maturities and short-term investments

15,600,000,000

14,900,000,000

Restricted assets in cash

$ 291,000,000

$ 179,000,000

Investments (Schedule Of Amortized Cost And Fair Value Of Fixed Maturities And Related OTTI Recognized In AOCI) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investment [Line Items]

Available for sale, Amortized Cost

$ 41,661

$ 40,450

Available for sale, Gross Unrealized Appreciation

2,025

1,927

Available for sale, Gross Unrealized Depreciation

(218)

(410)

Available for sale, Fair Value

43,468

41,967

Available for sale, OTTI recognized in AOCI

(133)

(175)

Held to maturity, Amortized Cost

8,117

8,447

Held to maturity, Gross Unrealized Appreciation

251

232

Held to maturity, Gross Unrealized Depreciation

(20)

(74)

Held to maturity, Fair Value

8,348

8,605

Held to maturity, OTTI recognized in AOCI

U.S. Treasury And Agency [Member]

Investment [Line Items]

Available for sale, Amortized Cost

3,012

2,774

Available for sale, Gross Unrealized Appreciation

139

186

Available for sale, Gross Unrealized Depreciation

(10)

Available for sale, Fair Value

3,141

2,960

Available for sale, OTTI recognized in AOCI

Held to maturity, Amortized Cost

1,081

1,078

Held to maturity, Gross Unrealized Appreciation

40

48

Held to maturity, Fair Value

1,121

1,126

Held to maturity, OTTI recognized in AOCI

Foreign [Member]

Investment [Line Items]

Available for sale, Amortized Cost

12,417

12,025

Available for sale, Gross Unrealized Appreciation

507

475

Available for sale, Gross Unrealized Depreciation

(38)

(99)

Available for sale, Fair Value

12,886

12,401

Available for sale, OTTI recognized in AOCI

(2)

Held to maturity, Amortized Cost

941

935

Held to maturity, Gross Unrealized Appreciation

20

18

Held to maturity, Gross Unrealized Depreciation

(6)

(23)

Held to maturity, Fair Value

955

930

Held to maturity, OTTI recognized in AOCI

Corporate Securities [Member]

Investment [Line Items]

Available for sale, Amortized Cost

14,452

14,055

Available for sale, Gross Unrealized Appreciation

878

773

Available for sale, Gross Unrealized Depreciation

(66)

(135)

Available for sale, Fair Value

15,264

14,693

Available for sale, OTTI recognized in AOCI

(12)

(22)

Held to maturity, Amortized Cost

2,298

2,338

Held to maturity, Gross Unrealized Appreciation

64

44

Held to maturity, Gross Unrealized Depreciation

(8)

(45)

Held to maturity, Fair Value

2,354

2,337

Held to maturity, OTTI recognized in AOCI

Mortgage-Backed Securities [Member]

Investment [Line Items]

Available for sale, Amortized Cost

9,721

9,979

Available for sale, Gross Unrealized Appreciation

392

397

Available for sale, Gross Unrealized Depreciation

(97)

(175)

Available for sale, Fair Value

10,016

10,201

Available for sale, OTTI recognized in AOCI

(119)

(151)

Held to maturity, Amortized Cost

2,693

2,949

Held to maturity, Gross Unrealized Appreciation

93

90

Held to maturity, Gross Unrealized Depreciation

(2)

(3)

Held to maturity, Fair Value

2,784

3,036

Held to maturity, OTTI recognized in AOCI

States, Municipalities, And Political Subdivisions [Member]

Investment [Line Items]

Available for sale, Amortized Cost

2,059

1,617

Available for sale, Gross Unrealized Appreciation

109

96

Available for sale, Gross Unrealized Depreciation

(7)

(1)

Available for sale, Fair Value

2,161

1,712

Available for sale, OTTI recognized in AOCI

Held to maturity, Amortized Cost

1,104

1,147

Held to maturity, Gross Unrealized Appreciation

34

32

Held to maturity, Gross Unrealized Depreciation

(4)

(3)

Held to maturity, Fair Value

1,134

1,176

Held to maturity, OTTI recognized in AOCI

Investments (Schedule Of Fixed Maturities By Contractual Maturity) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investments [Abstract]

Available for sale, Due in 1 year or less, Amortized Cost

$ 2,324

$ 2,321

Available for sale, Due after 1 year through 5 years, Amortized Cost

12,606

12,325

Available for sale, Due after 5 years though 10 years, Amortized Cost

13,180

12,379

Available for sale, Due after 10 years, Amortized Cost

3,830

3,446

Available for sale, Subtotal, Amortized Cost

31,940

30,471

Available for sale, Mortgage-backed securities, Amortized Cost

9,721

9,979

Available for sale, Amortized Cost

41,661

40,450

Available for sale, Due in 1 year or less, Fair Value

2,354

2,349

Available for sale, Due after 1 year through 5 years, Fair Value

13,091

12,722

Available for sale, Due after 5 years through 10 years, Fair Value

13,929

12,995

Available for sale, Due after 10 years, Fair Value

4,078

3,700

Available for sale, Subtotal, Fair Value

33,452

31,766

Available for sale, Mortgage backed securities, Fair Value

10,016

10,201

Available for sale, Fair Value

43,468

41,967

Held to maturity, Due in 1 year or less, Amortized Cost

591

393

Held to maturity, Due after 1 year through 5 years, Amortized Cost

1,922

2,062

Held to maturity, Due after 5 years through 10 years, Amortized Cost

2,242

2,376

Held to maturity, Due after 10 years, Amortized Cost

669

667

Held to maturity, Subtotal, Amortized Cost

5,424

5,498

Held to maturity, Mortgage backed securities, Amortized Cost

2,693

2,949

Held to maturity, Amortized Cost

8,117

8,447

Held to maturity, Due in 1 year or less, Fair Value

598

396

Held to maturity, Due after 1 year through 5, Fair Value

1,967

2,090

Held to maturity, Due after 5 years through 10 years, Fair Value

2,307

2,399

Held to maturity, Due after 10 years, Fair Value

692

684

Held to maturity, Subtotal, Fair Value

5,564

5,569

Held to maturity, Mortgage backed securities, Fair Value

2,784

3,036

Held to maturity, Fair Value

$ 8,348

$ 8,605

Investments (Schedule Of Cost And Fair Value Of Equity Securities) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investments [Abstract]

Cost

$ 662

$ 671

Gross unrealized appreciation

29

18

Gross unrealized depreciation

(12)

(42)

Fair value

$ 679

$ 647

Investments (Net Realized Gains (Losses) And The Losses Included In Net Realized Gains (Losses) And OCI) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Investments [Abstract]

OTTI on fixed maturities, gross

$ (7)

$ (5)

OTTI on fixed maturities recognized in OCI (pre-tax)

1

OTTI on fixed maturities, net

(7)

(4)

Fixed maturities, Gross realized gains excluding OTTI

112

109

Fixed maturities, Gross realized losses excluding OTTI

(71)

(56)

Total fixed maturities

34

49

OTTI on equity securities

(1)

Equity securities, Gross realized gains excluding OTTI

2

8

Equity securities, Gross realized losses excluding OTTI

(1)

Total equity securities

1

7

OTTI on other investments

(2)

Foreign exchange losses

(5)

(79)

Investment and embedded derivative instruments

42

(20)

Fair value adjustments on insurance derivative

428

71

S&P put options and futures

(231)

(71)

Other derivative instruments

(5)

(1)

Other

(2)

(1)

Total net realized gains (losses)

$ 260

$ (45)

Investments (Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which A Portion Of OTTI Was Recognized In OCI) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Investments [Abstract]

Balance of credit losses related to securities still held- beginning of period

$ 74

$ 137

Additions where no OTTI was previously recorded

1

Additions where an OTTI was previously recorded

5

1

Reductions for securities sold during the period

(25)

(42)

Balance of credit losses related to securities still held- end of period

$ 55

$ 96

Investments (Aggregate Fair Value And Gross Unrealized Loss By Length Of Time The Security Has Continuously Been In An Unrealized Loss Position) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

$ 5,904

$ 5,927

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(120.9)

(288.9)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

1,193

1,481

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(134.6)

(245.9)

Investment securities, Unrealized loss position, Total Fair Value

7,097

7,408

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(255.5)

(534.8)

U.S. Treasury And Agency [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

820

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(9.5)

Investment securities, Unrealized loss position, Total Fair Value

820

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(9.5)

Foreign [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

1,558

1,801

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(25.7)

(82.2)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

430

529

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(18.3)

(40.0)

Investment securities, Unrealized loss position, Total Fair Value

1,988

2,330

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(44.0)

(122.2)

Corporate Securities [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

1,937

3,084

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(56.4)

(148.2)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

201

268

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(17.8)

(32.2)

Investment securities, Unrealized loss position, Total Fair Value

2,138

3,352

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(74.2)

(180.4)

Mortgage-Backed Securities [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

464

440

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(4.4)

(7.5)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

500

586

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(95.0)

(170.2)

Investment securities, Unrealized loss position, Total Fair Value

964

1,026

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(99.4)

(177.7)

States, Municipalities, And Political Subdivisions [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

480

30

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(7.2)

(0.4)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

62

98

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(3.5)

Investment securities, Unrealized loss position, Total Fair Value

542

128

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(10.7)

(3.9)

Total Fixed Maturities [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

5,259

5,355

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(103.2)

(238.3)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

1,193

1,481

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

(134.6)

(245.9)

Investment securities, Unrealized loss position, Total Fair Value

6,452

6,836

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(237.8)

(484.2)

Equity Securities [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

489

484

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(12.0)

(42.3)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

Investment securities, Unrealized loss position, Total Fair Value

489

484

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

(12.0)

(42.3)

Other Investments [Member]

Investment [Line Items]

Investment securities, Unrealized loss position, 0-12 Months, Fair Value

156

88

Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss

(5.7)

(8.3)

Investment securities, Unrealized loss position, Over 12 Months, Fair Value

Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss

Investment securities, Unrealized loss position, Total Fair Value

156

88

Investment securities, Unrealized loss position, Total Gross Unrealized Loss

$ (5.7)

$ (8.3)

Investments (Schedule Of Components Of Restricted Assets) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investments [Abstract]

Trust funds

$ 10,605

$ 9,940

Deposits with non-U.S. regulatory authorities

2,126

2,240

Deposits with U.S. regulatory authorities

1,293

1,307

Assets pledged under reverse repurchase agreements

1,401

1,251

Other pledged assets

451

364

Total restricted assets

$ 15,876

$ 15,102

Fair Value Measurements (Narrative) (Details)

3 Months Ended

Mar. 31, 2012

D

Fair Value Measurements [Line Items]

GLB - Lapse rate - lower range

1.00%

GLB - Lapse rate - upper range

6.00%

GLB - Spike lapse rate - lower range

10.00%

GLB - Spike lapse rate - upper range

30.00%

GLB - Ultimate lapse rate

10.00%

GLB - Length of ultimate lapse rate period, years

2

GLB - Adjustment factor for valuable guarantees - lower

15.00%

GLB - Adjustment factor for valuable guarantees - upper

75.00%

GLB - Maximum annuitization rate

8.00%

GLB - Maximum annuitization rate in the first year a policy can annuitize utilizing the GMIB

13.00%

GLB - Weighted average maximum annuitization rate - rate 1

8.00%

GLB - Weighted average maximum annuitization rate - rate 2

12.00%

GLB - Weighted average maximum annuitization rate - rate 3

30.00%

GLB - Number of different annuitization functions used

3

Minimum number of pricing services used to obtain fair value measurements for the majority of the investment securities held

1

The maximum maturity period in years to be classified as a short-term investment

1

Percent of GMIB guaranteed value that are represented by clients with several years of annuitization experience

36.00%

Redemption Notice Periods Lower Range [Member]

Fair Value Measurements [Line Items]

Notice period for redemption for alternative investments investment funds, days

5

Redemption Notice Periods Upper Range [Member]

Fair Value Measurements [Line Items]

Notice period for redemption for alternative investments investment funds, days

120

Fair Value Measurements (Financial Instruments Measured At Fair Value On A Recurring Basis) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

$ 43,468

$ 41,967

Equity securities

679

647

Short-term investments

2,099

2,301

Other investments

2,429

2,314

Securities lending collateral

2,204

1,375

Investment derivative instruments

12

10

Other derivative instruments

(42)

41

Separate account assets

820

660

Total assets measured at fair value

51,669

49,315

GLB

863 ¹

1,319 ¹

Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

1,988

1,923

Equity securities

669

632

Short-term investments

1,344

1,246

Other investments

236

208

Investment derivative instruments

12

10

Other derivative instruments

(78)

(16)

Separate account assets

764

607

Total assets measured at fair value

4,935

4,610

Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

41,294

39,843

Equity securities

2

Short-term investments

755

1,055

Other investments

239

229

Securities lending collateral

2,204

1,375

Other derivative instruments

37

54

Separate account assets

56

53

Total assets measured at fair value

44,585

42,611

Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

186

201

Equity securities

10

13

Other investments

1,954

1,877

Other derivative instruments

(1)

3

Total assets measured at fair value

2,149

2,094

GLB

863 ¹

1,319 ¹

U.S. Treasury And Agency [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

3,141

2,960

U.S. Treasury And Agency [Member] |
Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

1,762

1,691

U.S. Treasury And Agency [Member] |
Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

1,379

1,264

U.S. Treasury And Agency [Member] |
Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

5

Foreign [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

12,886

12,401

Foreign [Member] |
Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

203

212

Foreign [Member] |
Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

12,634

12,156

Foreign [Member] |
Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

49

33

Corporate Securities [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

15,264

14,693

Corporate Securities [Member] |
Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

23

20

Corporate Securities [Member] |
Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

15,124

14,539

Corporate Securities [Member] |
Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

117

134

Mortgage-Backed Securities [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

10,016

10,201

Mortgage-Backed Securities [Member] |
Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

9,997

10,173

Mortgage-Backed Securities [Member] |
Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

19

28

States, Municipalities, And Political Subdivisions [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

2,161

1,712

States, Municipalities, And Political Subdivisions [Member] |
Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

2,160

1,711

States, Municipalities, And Political Subdivisions [Member] |
Level 3 [Member]

Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]

Fixed maturities available for sale at fair value

$ 1

[1] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

Fair Value Measurements (Fair Value And Maximum Future Funding Commitments Related To Investments) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Expected Liquidation Period Lower Range [Member]

Y

Mar. 31, 2012

Expected Liquidation Period Upper Range [Member]

Y

Mar. 31, 2012

Fair Value [Member]

Dec. 31, 2011

Fair Value [Member]

Mar. 31, 2012

Maximum Future Funding Commitments [Member]

Dec. 31, 2011

Maximum Future Funding Commitments [Member]

Fair Value And Maximum Future Funding Commitments Related To Investments [Line Items]

Financial

$ 207

$ 205

$ 135

$ 141

Real estate

282

270

147

96

Distressed

189

182

52

57

Mezzanine

227

195

337

282

Traditional

579

565

525

200

Vintage

18

1

Investment funds

383

378

Alternative investments total

$ 1,885

$ 1,813

$ 1,197

$ 777

Liquidation period for financial alternative investments (in years)

5

9

Liquidation period for real estate alternative investments (in years)

3

9

Liquidation period for distressed alternative investments (in years)

6

9

Liquidation period for mezzanine alternative investments (in years)

6

9

Liquidation period for traditional alternative investments (in years)

3

8

Liquidation period for vintage alternative investments (in years)

1

3

Fair Value Measurements (Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations) (Details) (Guaranteed Living Benefits [Member], USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Fair Value

$ 863 ¹

Valuation Technique

Actuarial model ¹

Maximum [Member]

Significant Unobservable Inputs Lapse rate

30.00%

Significant Unobservable Inputs Annuitization rate

50.00%

Minimum [Member]

Significant Unobservable Inputs Lapse rate

1.00%

Significant Unobservable Inputs Annuitization rate

0.00%

[1] Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

Fair Value Measurements (Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Dec. 31, 2011

Dec. 31, 2010

Equity Securities [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

$ 13

Changes in Net Unrealized Gains (Losses) included in OCI, Assets

1

(1)

Net Realized Gains/Losses, Assets

2

Purchases, Assets

1

Sales, Assets

(5)

(4)

Balance-End of Period, Assets

10

Other Investments [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

1,877

1,432

Changes in Net Unrealized Gains (Losses) included in OCI, Assets

9

42

Net Realized Gains/Losses, Assets

(2)

Purchases, Assets

113

90

Sales, Assets

(2)

Settlements, Assets

(41)

Balance-End of Period, Assets

1,954

1,564

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets

(2)

Other Derivative Instruments [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

3

4

Net Realized Gains/Losses, Assets

(3)

1

Settlements, Assets

(1)

Balance-End of Period, Assets

(1)

4

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets

(3)

1

Guaranteed Living Benefits [Member]

Fair Value Measurements [Line Items]

Guaranteed minimum benefits fair value derivative adjustment in liability

863

449

1,300

507

Balance-Beginning of period, Liabilities

1,319 ¹

507 ²

Net Realized Gains/Losses, Liabilities

(456)¹

(58)²

Balance-End of Period, Liabilities

863 ¹

449 ²

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Liabilities

(456)¹

(58)²

Reported liabilities

1,050

596

1,500

648

Available-For-Sale Debt Securities [Member] |
U.S. Treasury And Agency [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

5

Transfers out of Level 3, Assets

(5)

Available-For-Sale Debt Securities [Member] |
Foreign [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

33

26

Transfers into Level 3, Assets

4

Transfers out of Level 3, Assets

(1)

Changes in Net Unrealized Gains (Losses) included in OCI, Assets

(1)

Purchases, Assets

34

Sales, Assets

(17)

(1)

Settlements, Assets

(1)

Balance-End of Period, Assets

49

26

Available-For-Sale Debt Securities [Member] |
Corporate Securities [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

134

115

Transfers into Level 3, Assets

5

Transfers out of Level 3, Assets

(7)

(4)

Changes in Net Unrealized Gains (Losses) included in OCI, Assets

2

1

Net Realized Gains/Losses, Assets

(1)

Purchases, Assets

3

19

Sales, Assets

(8)

(19)

Settlements, Assets

(7)

(3)

Balance-End of Period, Assets

117

113

Available-For-Sale Debt Securities [Member] |
Mortgage-Backed Securities [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

28

39

Transfers into Level 3, Assets

1

Transfers out of Level 3, Assets

(12)

Purchases, Assets

4

46

Sales, Assets

(3)

Settlements, Assets

(1)

(2)

Balance-End of Period, Assets

19

81

Available-For-Sale Debt Securities [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Measurements [Line Items]

Balance-Beginning of Period, Assets

2

1

Settlements, Assets

(1)

Balance-End of Period, Assets

$ 1

[1] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

[2] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $596 million at March 31, 2011, and $648 million at December 31, 2010, which includes a fair value derivative adjustment of $449 million and $507 million, respectively.

Fair Value Measurements (Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total assets

$ 89,749

$ 87,321

Short-term debt

1,531

1,251

Long-term debt

3,360

Trust preferred securities

309

Total liabilities

64,318

62,989

Financial Instruments Carrying Value [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

8,117

8,447

Partially-owned insurance companies

346

352

Total assets

8,463

8,799

Short-term debt

1,531

1,251

Long-term debt

3,360

Trust preferred securities

309

Total liabilities

5,200

4,920

Financial Instruments Carrying Value [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

1,081

1,078

Financial Instruments Carrying Value [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

941

935

Financial Instruments Carrying Value [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

2,298

2,338

Financial Instruments Carrying Value [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

2,693

2,949

Financial Instruments Carrying Value [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

1,104

1,147

Financial Instruments Fair Value [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

8,348

8,605

Partially-owned insurance companies

346

352

Total assets

8,694

8,957

Short-term debt

1,531

1,251

Long-term debt

3,878

3,823

Trust preferred securities

404

Total liabilities

5,813

5,478

Financial Instruments Fair Value [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

1,121

1,126

Financial Instruments Fair Value [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

955

930

Financial Instruments Fair Value [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

2,354

2,337

Financial Instruments Fair Value [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

2,784

3,036

Financial Instruments Fair Value [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Fixed maturities held to maturity

$ 1,134

$ 1,176

Fair Value Measurements (Financial Instruments Not Carried At Fair Value) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Level 1 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

$ 570

Partially-owned insurance companies

Total assets

570

Short-term debt

Long-term debt

Trust preferred securities

Total liabilities

Level 1 [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

570

Level 1 [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 1 [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 1 [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 1 [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 2 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

7,762

Partially-owned insurance companies

Total assets

7,762

Short-term debt

1,531

Long-term debt

3,878

Trust preferred securities

404

Total liabilities

5,813

Level 2 [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

551

Level 2 [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

955

Level 2 [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

2,338

Level 2 [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

2,784

Level 2 [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

1,134

Level 3 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

16

Partially-owned insurance companies

346

Total assets

362

Short-term debt

Long-term debt

Trust preferred securities

Total liabilities

Level 3 [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 3 [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 3 [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

16

Level 3 [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Level 3 [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

Total [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

8,348

Partially-owned insurance companies

346

Total assets

8,694

Short-term debt

1,531

Long-term debt

3,878

Trust preferred securities

404

Total liabilities

5,813

Total [Member] |
U.S. Treasury And Agency [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

1,121

Total [Member] |
Foreign [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

955

Total [Member] |
Corporate Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

2,354

Total [Member] |
Mortgage-Backed Securities [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

2,784

Total [Member] |
States, Municipalities, And Political Subdivisions [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total fixed maturities held to maturity

$ 1,134

Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Narrative) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Guaranteed Minimum Death Benefits [Member]

Dec. 31, 2011

Guaranteed Minimum Death Benefits [Member]

Mar. 31, 2012

Guaranteed Living Benefits [Member]

Mar. 31, 2011

Guaranteed Living Benefits [Member]

Mar. 31, 2012

Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]

Dec. 31, 2011

Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]

Mar. 31, 2012

Guaranteed Living Benefits [Member]

Dec. 31, 2011

Guaranteed Living Benefits [Member]

Mar. 31, 2011

Guaranteed Living Benefits [Member]

Dec. 31, 2010

Guaranteed Living Benefits [Member]

Guaranteed Minimum Benefits [Line Items]

Reported liabilities

$ 127

$ 138

$ 1,050

$ 1,500

$ 596

$ 648

Fair value derivative adjustment in liability

863

1,300

449

507

Net amount at risk

1,500

1,800

221

380

Discounting assumption used in the calculation of the benefit reserve averaging - lower range

1.00%

3.00%

1.00%

3.00%

Discounting assumption used in the calculation of the benefit reserve averaging - upper range

2.00%

4.00%

2.00%

4.00%

Percent of Annuity 2000 mortality table used for mortality assumption

100.00%

Mortality according to percent of the Annuity 2000 mortality table

100.00%

Total claim amount payable, if all of the Company's cedants' policyholders covered were to die immediately

500

800

Average attained age of all policyholders under all benefits reinsured, years

67

GMBD net amount of risk

136

182

GLB net amount of risk

$ 660

$ 998

Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Schedule Of Guaranteed Minimum Death Benefits And Guaranteed Minimum Income Benefits Income And Expense) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Guaranteed Minimum Benefits [Line Items]

Net premiums earned

$ 3,381

$ 3,309

Policy benefits and other reserve adjustments

147

91

Net realized gains (losses)

260

(45)

Guaranteed Minimum Death Benefits [Member]

Guaranteed Minimum Benefits [Line Items]

Net premiums earned

23

26

Policy benefits and other reserve adjustments

27

22

Guaranteed Living Benefits [Member]

Guaranteed Minimum Benefits [Line Items]

Net premiums earned

41

Policy benefits and other reserve adjustments

4

6

Net realized gains (losses)

458

58

Gain recognized in income

495

93

Net cash received

39

41

Net decrease in liability

$ 456

$ 52

Commitments, Contingencies, And Guarantees (Narrative) (Details) (USD $)

In Millions, unless otherwise specified

12 Months Ended

Dec. 31, 2011

Mar. 31, 2012

Commitments, Contingencies, And Guarantees [Abstract]

Carrying value of limited partnerships and partially-owned investment companies included in other investments

$ 1,502

Funding commitments relating to limited partnerships and partially-owned investment companies

1,197

Case settlement

$ 1.97

Commitments, Contingencies, And Guarantees (Balance Sheet Locations, Fair Values In An Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Investment And Embedded Derivative Instruments [Member]

Derivatives, Fair Value [Line Items]

Fair Value

$ 466

$ 427

Notional Value/Payment Provision

7,319

12,906

Other Derivative Instruments [Member]

Derivatives, Fair Value [Line Items]

Fair Value

(42)

41

Notional Value/Payment Provision

2,815

1,973

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Foreign Currency Forward Contracts [Member]

Derivatives, Fair Value [Line Items]

Fair Value

(2)

7

Notional Value/Payment Provision

681

674

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures Contracts On Money Market Instruments [Member]

Derivatives, Fair Value [Line Items]

Fair Value

1

7

Notional Value/Payment Provision

2,077

10,476

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures Contracts On Notes And Bonds [Member]

Derivatives, Fair Value [Line Items]

Fair Value

12

(4)

Notional Value/Payment Provision

942

1,055

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Options On Money Market Instruments [Member]

Derivatives, Fair Value [Line Items]

Fair Value

1

Notional Value/Payment Provision

3,192

292

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Future Contracts On Equities [Member]

Derivatives, Fair Value [Line Items]

Fair Value

(78)¹

(16)¹

Notional Value/Payment Provision

2,209 ¹

1,367 ¹

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Options On Equity Market Indices [Member]

Derivatives, Fair Value [Line Items]

Fair Value

37 ¹

54 ¹

Notional Value/Payment Provision

250 ¹

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Credit Default Swaps [Member]

Derivatives, Fair Value [Line Items]

Fair Value

(1)

3

Notional Value/Payment Provision

350

Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Other [Member]

Derivatives, Fair Value [Line Items]

Notional Value/Payment Provision

6

Fixed Maturities Available For Sale [Member] |
Convertible Bonds [Member]

Derivatives, Fair Value [Line Items]

Fair Value

400

357

Notional Value/Payment Provision

374

353

Fixed Maturities Available For Sale [Member] |
To Be Announced Mortgage-Backed Securities [Member]

Derivatives, Fair Value [Line Items]

Fair Value

54

60

Notional Value/Payment Provision

53

56

Accounts Payable Future Policy Benefits [Member] |
Guaranteed Living Benefits [Member]

Derivatives, Fair Value [Line Items]

Fair Value

(1,049)²

(1,505)²

Notional Value/Payment Provision

$ 881 ²

$ 1,378 ²

[2] Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

Commitments, Contingencies, And Guarantees (Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

$ 234

$ (21)

Foreign Currency Forward Contracts [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

(8)

(15)

All Other Futures Contracts And Options [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

26

(3)

Convertible Bonds [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

24

(1)

To Be Announced Mortgage-Backed Securities [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

(1)

Investment And Embedded Derivative Instruments [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

42

(20)

Guaranteed Living Benefits [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

428 ¹

71 ¹

Future Contracts On Equities [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

(213)²

(63)²

Options On Equity Market Indices [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

(18)²

(8)²

Credit Default Swaps [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

(5)

(1)

Guaranteed Living Benefit And Other Derivative Instruments [Member]

Commitments Contingencies And Guarantees [Line Items]

Net realized gains (losses)

$ 192

$ (1)

[1] Excludes foreign exchange gains (losses) related to GLB.

Shareholders' Equity (Details)

In Millions, except Share data, unless otherwise specified

1 Months Ended

3 Months Ended

Jan. 31, 2012

USD ($)

Aug. 31, 2011

USD ($)

Nov. 30, 2010

USD ($)

Mar. 31, 2012

USD ($)

Mar. 31, 2012

CHF

Mar. 31, 2011

USD ($)

Mar. 31, 2011

CHF

Dec. 31, 2011

Shareholders' Equity [Abstract]

Per Common Share increase dividend installments

$ 0.12

Dividends declared per common share

$ 0.47

0.42

$ 0.33

0.30

Common shares in treasury, shares

4,179,030

5,905,136

Stock repurchase program, authorized amount

$ 303

$ 600

Repurchase of outstanding common shares, shares

100,000

Transaction cost

7.0

Share repurchase authorization remains

$ 197

$ 461

Share-Based Compensation (Details) (USD $)

0 Months Ended

3 Months Ended

Feb. 23, 2012

Mar. 31, 2012

Y

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock options granted

1,452,605

Weighted-average fair value for stock options granted

$ 15.58

Restricted Stock Awards [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Restricted stock award and units vesting period in years

4

Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period

1,462,230

Weighted average grant date fair value of awards except for options granted to employees and officers of the company

$ 73.35

Restricted Stock Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Restricted stock units awarded to employees, and officers of the company

255,850

Stock Options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based compensation arrangement by share-based payment award, award vesting period, years

3

Stock option term in years

10

Segment Information (Operations By Segment) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Segment Reporting [Line Items]

Net premiums written

$ 3,572

$ 3,446

Net premiums earned

3,381

3,309

Losses and loss expenses

1,804

2,263

Policy benefits

147

91

Policy acquisition costs

582

559

Administrative expenses

510

499

Underwriting income (loss)

338

(103)

Net investment income

544

Net realized gains (losses) including OTTI

260

(45)

Interest expense

62

63

Gains (losses) on fair value changes in separate account assets

(18)

Other (income) expense

(3)

(13)

Other

15

Income tax expense (benefit)

110

96

Net income

973

250

Insurance - North American [Member]

Segment Reporting [Line Items]

Net premiums written

1,293

1,285

Net premiums earned

1,287

1,346

Losses and loss expenses

849

994

Policy acquisition costs

127

136

Administrative expenses

147

148

Underwriting income (loss)

164

68

Net investment income

274

295

Net realized gains (losses) including OTTI

(1)

(11)

Interest expense

3

4

Other (income) expense

(16)

Other

(1)

Income tax expense (benefit)

91

89

Net income

344

275

Insurance - Overseas General [Member]

Segment Reporting [Line Items]

Net premiums written

1,528

1,410

Net premiums earned

1,391

1,278

Losses and loss expenses

705

852

Policy acquisition costs

335

301

Administrative expenses

229

223

Underwriting income (loss)

122

(98)

Net investment income

131

Net realized gains (losses) including OTTI

20

(9)

Interest expense

1

Other (income) expense

(2)

Income tax expense (benefit)

38

17

Net income

234

8

Global Reinsurance [Member]

Segment Reporting [Line Items]

Net premiums written

263

315

Net premiums earned

230

260

Losses and loss expenses

102

279

Policy acquisition costs

43

46

Administrative expenses

12

Underwriting income (loss)

73

(77)

Net investment income

71

72

Net realized gains (losses) including OTTI

13

(13)

Interest expense

1

Other (income) expense

(6)

Other

(5)

Income tax expense (benefit)

6

10

Net income

155

(22)

Life [Member]

Segment Reporting [Line Items]

Net premiums written

488

436

Net premiums earned

473

425

Losses and loss expenses

148

138

Policy benefits

147

91

Policy acquisition costs

76

Administrative expenses

78

74

Underwriting income (loss)

24

46

Net investment income

61

46

Net realized gains (losses) including OTTI

231

(13)

Interest expense

3

Gains (losses) on fair value changes in separate account assets

(18)

Other (income) expense

6

Other

9

Income tax expense (benefit)

11

14

Net income

311

56

Corporate And Other [Member]

Segment Reporting [Line Items]

Policy acquisition costs

1

Administrative expenses

44

42

Underwriting income (loss)

(45)

(42)

Net investment income

7

Net realized gains (losses) including OTTI

(3)

1

Interest expense

54

55

Other (income) expense

5

Other

12

Income tax expense (benefit)

(36)

(34)

Net income

$ (71)

$ (67)

Segment Information (Net Premiums Earned For Segment By Product) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Segment Reporting [Line Items]

Property & All Other

$ 1,029

$ 913

Casualty

1,270

1,380

Life, Accident & Health

1,082

1,016

Net premiums earned

3,381

3,309

Insurance - North American [Member]

Segment Reporting [Line Items]

Property & All Other

381

370

Casualty

817

890

Life, Accident & Health

89

86

Net premiums earned

1,287

1,346

Insurance - Overseas General [Member]

Segment Reporting [Line Items]

Property & All Other

538

431

Casualty

333

342

Life, Accident & Health

520

505

Net premiums earned

1,391

1,278

Global Reinsurance [Member]

Segment Reporting [Line Items]

Property & All Other

110

112

Casualty

120

148

Net premiums earned

230

260

Life [Member]

Segment Reporting [Line Items]

Life, Accident & Health

473

425

Net premiums earned

$ 473

$ 425

Earnings Per Share (Details) (USD $)

In Millions, except Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Earnings Per Share [Abstract]

Net income

$ 973

$ 250

Weighted-average shares outstanding

338,567,341

337,088,217

Share-based compensation plans

3,123,641

2,572,982

Adjusted weighted-average shares outstanding and assumed conversions

341,690,982

339,661,199

Basic earnings per share

$ 2.87

$ 0.74

Diluted earnings per share

$ 2.84

$ 0.73

Anti-dilutive share conversions

468,048

333,072

Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Balance Sheet) (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2012

Dec. 31, 2011

Mar. 31, 2011

Dec. 31, 2010

Condensed Financial Statements Captions [Line Items]

Investments

$ 56,792

$ 55,676

Cash

715

614

1,115 ¹

772 ¹

Insurance and reinsurance balances receivable

4,487

4,387

Reinsurance recoverable on losses and loss expenses

12,057

12,389

Reinsurance recoverable on policy benefits

243

249

Value of business acquired

669

676

Goodwill and other intangible assets

4,860

4,799

Other assets

9,926

8,531

Total assets

89,749

87,321

Unpaid losses and loss expenses

37,247

37,477

Unearned premiums

6,664

6,334

Future policy benefits

4,358

4,274

Short-term debt

1,531

1,251

Long-term debt

3,360

Trust preferred securities

309

Other liabilities

10,849

9,984

Total liabilities

64,318

62,989

Total shareholders' equity

25,431

24,332

23,228

Total liabilities and shareholders' equity

89,749

87,321

Parent guarantor ownership percentage of subsidiary issuer

100.00%

ACE Limited (Parent Guarantor) [Member]

Condensed Financial Statements Captions [Line Items]

Investments

34

33

Cash

162

106

354 ¹

308 ¹

Investments in subsidiaries

25,197

23,871

Due from subsidiaries and affiliates, net

376

498

Other assets

15

8

Total assets

25,784

24,516

Short-term debt

130

Other liabilities

223

184

Total liabilities

353

184

Total shareholders' equity

25,431

24,332

Total liabilities and shareholders' equity

25,784

24,516

ACE INA Holdings Inc. (Subsidiary Issuer) [Member]

Condensed Financial Statements Captions [Line Items]

Investments

29,078

28,848

Cash

496

382

980 ¹

573 ¹

Insurance and reinsurance balances receivable

4,050

3,944

Reinsurance recoverable on losses and loss expenses

16,685

17,146

Reinsurance recoverable on policy benefits

1,140

941

Value of business acquired

669

676

Goodwill and other intangible assets

4,306

4,248

Other assets

7,683

7,018

Total assets

64,107

63,203

Unpaid losses and loss expenses

30,691

30,837

Unearned premiums

5,726

5,416

Future policy benefits

3,766

3,673

Due to subsidiaries and affiliates, net

281

316

Short-term debt

851

850

Long-term debt

3,360

Trust preferred securities

309

Other liabilities

8,233

7,769

Total liabilities

53,217

52,530

Total shareholders' equity

10,890

10,673

Total liabilities and shareholders' equity

64,107

63,203

Other ACE Limited Subsidiaries And Eliminations [Member]

Condensed Financial Statements Captions [Line Items]

Investments

27,680 ²

26,795 ²

Cash

57 ²

126 ²

(219)¹ ²

(109)¹ ²

Insurance and reinsurance balances receivable

437 ²

443 ²

Reinsurance recoverable on losses and loss expenses

(4,628)²

(4,757)²

Reinsurance recoverable on policy benefits

(897)²

(692)²

Goodwill and other intangible assets

554 ²

551 ²

Other assets

2,228 ²

1,505 ²

Total assets

25,431 ²

23,971 ²

Unpaid losses and loss expenses

6,556 ²

6,640 ²

Unearned premiums

938 ²

918 ²

Future policy benefits

592 ²

601 ²

Due to subsidiaries and affiliates, net

95 ²

182 ²

Short-term debt

550 ²

401 ²

Other liabilities

2,393 ²

2,031 ²

Total liabilities

11,124 ²

10,773 ²

Total shareholders' equity

14,307 ²

13,198 ²

Total liabilities and shareholders' equity

25,431 ²

23,971 ²

Consolidating Adjustments [Member]

Condensed Financial Statements Captions [Line Items]

Investments in subsidiaries

(25,197)³

(23,871)³

Due from subsidiaries and affiliates, net

(376)³

(498)³

Total assets

(25,573)³

(24,369)³

Due to subsidiaries and affiliates, net

(376)³

(498)³

Total liabilities

(376)³

(498)³

Total shareholders' equity

(25,197)³

(23,871)³

Total liabilities and shareholders' equity

$ (25,573)³

$ (24,369)³

[1] ACE maintains two notional multi-currency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At March 31, 2011 and December 31, 2010, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] Includes all other subsidiaries of ACE Limited and intercompany eliminations.

[3] Includes ACE Limited parent company eliminations.

Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Operations) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net premiums written

$ 3,572

$ 3,446

Net premiums earned

3,381

3,309

Net investment income

544

Net realized gains (losses) including OTTI

260

(45)

Losses and loss expenses

1,804

2,263

Policy benefits

147

91

Policy acquisition costs and administrative expenses

1,092

1,058

Interest (income) expense

62

63

Other (income) expense

(3)

(13)

Income tax expense

110

96

Net income (loss)

973

250

Comprehensive income

1,271

438

ACE Limited (Parent Guarantor) [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net investment income

1

Equity in earnings of subsidiaries

928

239

Net realized gains (losses) including OTTI

20

(1)

Policy acquisition costs and administrative expenses

12

18

Interest (income) expense

(9)

(8)

Other (income) expense

(30)

(22)

Income tax expense

2

1

Net income (loss)

973

250

Comprehensive income

1,271

438

ACE INA Holdings Inc. (Subsidiary Issuer) [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net premiums written

2,098

2,023

Net premiums earned

1,952

1,938

Net investment income

265

262

Net realized gains (losses) including OTTI

26

(13)

Losses and loss expenses

1,182

1,301

Policy benefits

86

40

Policy acquisition costs and administrative expenses

640

588

Interest (income) expense

66

67

Other (income) expense

25

13

Income tax expense

85

68

Net income (loss)

159

110

Comprehensive income

287

210

Other ACE Limited Subsidiaries And Eliminations [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net premiums written

1,474 ¹

1,423 ¹

Net premiums earned

1,429 ¹

1,371 ¹

Net investment income

279 ¹

281 ¹

Net realized gains (losses) including OTTI

214 ¹

(31)¹

Losses and loss expenses

622 ¹

962 ¹

Policy benefits

61 ¹

51 ¹

Policy acquisition costs and administrative expenses

440 ¹

452 ¹

Interest (income) expense

5 ¹

4 ¹

Other (income) expense

2 ¹

(4)¹

Income tax expense

23 ¹

27 ¹

Net income (loss)

769 ¹

129 ¹

Comprehensive income

641 ¹

29 ¹

Consolidating Adjustments [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Equity in earnings of subsidiaries

(928)²

(239)²

Net income (loss)

(928)²

(239)²

Comprehensive income

$ (928)²

$ (239)²

[1] Includes all other subsidiaries of ACE Limited and intercompany eliminations.

[2] Includes ACE Limited parent company eliminations.

Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Cash Flows) (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net cash flows from operating activities

$ 572

$ 1,003

Purchases of fixed maturities available for sale

(5,483)

(7,233)

Purchases of fixed maturities held to maturity

(32)

(177)

Purchases of equity securities

(19)

(143)

Sales of fixed maturities available for sale

3,795

5,428

Sales of equity securities

26

317

Maturities and redemptions of fixed maturities available for sale

1,076

941

Maturities and redemptions of fixed maturities held to maturity

345

396

Net derivative instruments settlements

(195)

(85)

Acquisition of subsidiaries (net of cash acquired)

(25)

(45)

Other

(103)

(30)

Net cash flows used for investing activities

(615)

(631)

Dividends paid on Common Shares

(159)

(112)

Common Shares repurchased

(11)

(68)

Net proceeds from issuance (repayment) of short-term debt

281

100

Proceeds from share-based compensation plans

28

43

Repayment of short-term debt

(400)

(1,300)

Net cash flows from (used for) financing activities

139

(37)

Effect of foreign currency rate changes on cash and cash equivalents

5

8

Net increase in cash

101

343

Cash - beginning of period

614

772 ¹

Cash - end of period

715

1,115 ¹

Cash acquired from acquisition of subsidiary

39

ACE Limited (Parent Guarantor) [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net cash flows from operating activities

19

509

Sales of fixed maturities available for sale

6

Net derivative instruments settlements

(1)

Advances (to) from affiliates

66

(99)

Net cash flows used for investing activities

65

(94)

Dividends paid on Common Shares

(159)

(112)

Net proceeds from issuance (repayment) of short-term debt

130

(300)

Proceeds from share-based compensation plans

1

43

Net cash flows from (used for) financing activities

(28)

(369)

Net increase in cash

56

46

Cash - beginning of period

106

308 ¹

Cash - end of period

162

354 ¹

ACE INA Holdings Inc. (Subsidiary Issuer) [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net cash flows from operating activities

66

217

Purchases of fixed maturities available for sale

(2,650)

(3,418)

Purchases of fixed maturities held to maturity

(31)

(176)

Purchases of equity securities

(10)

(121)

Sales of fixed maturities available for sale

1,935

2,760

Sales of equity securities

24

307

Maturities and redemptions of fixed maturities available for sale

497

440

Maturities and redemptions of fixed maturities held to maturity

267

298

Net derivative instruments settlements

(1)

4

Acquisition of subsidiaries (net of cash acquired)

(25)

(8)

Other

90

(28)

Net cash flows used for investing activities

96

58

Net proceeds from issuance (repayment) of short-term debt

1

Advances (to) from affiliates

(48)

127

Net cash flows from (used for) financing activities

(47)

127

Effect of foreign currency rate changes on cash and cash equivalents

(1)

5

Net increase in cash

114

407

Cash - beginning of period

382

573 ¹

Cash - end of period

496

980 ¹

Other ACE Limited Subsidiaries And Eliminations [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net cash flows from operating activities

487 ²

777 ²

Purchases of fixed maturities available for sale

(2,833)²

(3,815)²

Purchases of fixed maturities held to maturity

(1)²

Purchases of equity securities

(9)²

(22)²

Sales of fixed maturities available for sale

1,860 ²

2,662 ²

Sales of equity securities

2 ²

10 ²

Maturities and redemptions of fixed maturities available for sale

579 ²

501 ²

Maturities and redemptions of fixed maturities held to maturity

78 ²

98 ²

Net derivative instruments settlements

(193)²

(88)²

Acquisition of subsidiaries (net of cash acquired)

(37)²

Other

(193)²

(2)²

Net cash flows used for investing activities

(710)²

(694)²

Common Shares repurchased

(11)²

(68)²

Net proceeds from issuance (repayment) of short-term debt

150 ²

400 ²

Proceeds from share-based compensation plans

27 ²

Advances (to) from affiliates

(18)²

(28)²

Dividends to parent company

(500)²

Net cash flows from (used for) financing activities

148 ²

(196)²

Effect of foreign currency rate changes on cash and cash equivalents

6 ²

3 ²

Net increase in cash

(69)²

(110)²

Cash - beginning of period

126 ²

(109)¹ ²

Cash - end of period

57 ²

(219)¹ ²

Consolidating Adjustments [Member]

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]

Net cash flows from operating activities

(500)³

Advances (to) from affiliates

(66)³

99 ³

Net cash flows used for investing activities

(66)³

99 ³

Advances (to) from affiliates

66 ³

(99)³

Dividends to parent company

500 ³

Net cash flows from (used for) financing activities

$ 66 ³

$ 401 ³

[1] ACE maintains two notional multi-currency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At March 31, 2011 and December 31, 2010, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] Includes all other subsidiaries of ACE Limited and intercompany eliminations.

[3] Includes ACE Limited parent company eliminations.