ACE LTD, 10-Q filed on 11/4/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2015
Oct. 23, 2015
Entity Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
ACE 
 
Entity Registrant Name
ACE Ltd 
 
Entity Central Index Key
0000896159 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Common Shares Outstanding
 
324,181,471 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments [Abstract]
 
 
Fixed maturities available for sale, at fair value (amortized cost - $47,411 and $47,826) (includes hybrid financial instruments of $217 and $274)
$ 48,278 
$ 49,395 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
8,564 
7,331 
Equity securities, at fair value (cost – $434 and $440)
464 
510 
Short-term investments, at fair value and amortized cost
1,808 
2,322 
Other investments (cost – $2,943 and $2,999)
3,270 
3,346 
Total investments
62,384 
62,904 
Cash
1,038 1 2
655 1 3
Securities lending collateral
1,011 
1,330 
Accrued investment income
530 
552 
Insurance and reinsurance balances receivable
5,290 
5,426 
Reinsurance recoverable on losses and loss expenses
11,231 
11,992 
Reinsurance recoverable on policy benefits
194 
217 
Deferred policy acquisition costs
2,809 
2,601 
Value of business acquired
410 
466 
Goodwill and other intangible assets
5,713 
5,724 
Prepaid reinsurance premiums
2,059 
2,026 
Deferred tax assets
395 
295 
Investments in partially-owned insurance companies
654 
504 
Other assets
4,042 
3,556 
Total assets
97,760 
98,248 
Liabilities
 
 
Unpaid losses and loss expenses
37,564 
38,315 
Unearned premiums
8,510 
8,222 
Future policy benefits
4,776 
4,754 
Insurance and reinsurance balances payable
4,225 
4,095 
Securities lending payable
1,012 
1,331 
Accounts payable, accrued expenses, and other liabilities
5,977 
5,726 
Short-term debt
2,103 
2,552 
Long-term debt
4,157 
3,357 
Trust preferred securities
309 
309 
Total liabilities
68,633 
68,661 
Commitments and contingencies
   
   
Shareholders’ equity
 
 
Common Shares (CHF 24.15 and CHF 24.77 par value; 342,832,412 shares issued; 324,062,368 and 328,659,686 shares outstanding)
7,833 
8,055 
Common Shares in treasury (18,770,044 and 14,172,726 shares)
(1,974)
(1,448)
Additional paid-in capital
4,665 
5,145 
Retained earnings
18,795 
16,644 
Accumulated other comprehensive income (loss) (AOCI)
(192)
1,191 
Total shareholders’ equity
29,127 
29,587 
Total liabilities and shareholders’ equity
$ 97,760 
$ 98,248 
Consolidated Balance Sheets (Parenthetical)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2015
USD ($)
Sep. 30, 2015
CHF
Dec. 31, 2014
USD ($)
Dec. 31, 2014
CHF
Statement of Financial Position [Abstract]
 
 
 
 
Fixed maturities available for sale, at amortized cost
$ 47,411 
 
$ 47,826 
 
Fixed maturities available for sale, hybrid financial instruments
217 
 
274 
 
Fixed maturities held to maturity, at amortized cost
8,750 
 
7,589 
 
Equity securities, at cost
434 
 
440 
 
Other investments, cost
$ 2,943 
 
$ 2,999 
 
Common Shares, par value
 
 24.15 
 
 24.77 
Common Shares, shares issued
342,832,412 
342,832,412 
342,832,412 
342,832,412 
Common Shares, shares outstanding
324,062,368 
324,062,368 
328,659,686 
328,659,686 
Common Shares in treasury, shares
18,770,044 
18,770,044 
14,172,726 
14,172,726 
Consolidated Statements Of Operations and Comprehensive Income (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenues
 
 
 
 
Net premiums written
$ 4,709 
$ 4,729 
$ 13,569 
$ 13,473 
Decrease (increase) in unearned premiums
10 
25 
(563)
(417)
Net premiums earned
4,719 
4,754 
13,006 
13,056 
Net investment income
549 
566 
1,662 
1,675 
Net realized gains (losses):
 
 
 
 
Other-than-temporary impairment (OTTI) losses gross
(35)
(5)
(62)
(30)
Portion of OTTI losses recognized in other comprehensive income (OCI)
11 
Net OTTI losses recognized in income
(30)
(4)
(51)
(27)
Net realized gains (losses) excluding OTTI losses
(367)
(116)
(309)
(270)
Total net realized gains (losses) (includes $(49), $(38), $(18), and $(11) reclassified from AOCI)
(397)
(120)
(360)
(297)
Total revenues
4,871 
5,200 
14,308 
14,434 
Expenses
 
 
 
 
Losses and loss expenses
2,643 
2,684 
7,182 
7,233 
Policy benefits
89 
125 
384 
383 
Policy acquisition costs
771 
825 
2,205 
2,311 
Administrative expenses
568 
554 
1,700 
1,655 
Interest expense
68 
70 
207 
213 
Other (income) expense
12 
(46)
(61)
(139)
Amortization of intangible assets
51 
27 
136 
78 
Chubb integration expenses
Total expenses
4,211 
4,239 
11,762 
11,734 
Income before income tax
660 
961 
2,546 
2,700 
Income tax expense (includes $(4), $5, $10, and $7 on reclassified unrealized gains and losses)
132 
176 
395 
402 
Net income
528 
785 
2,151 
2,298 
Other comprehensive income (loss)
 
 
 
 
Unrealized appreciation (depreciation)
(321)
(375)
(696)
733 
Reclassification adjustment for net realized losses included in net income
49 
38 
18 
11 
Unrealized appreciation (Depreciation) after reclassification adjustment
(272)
(337)
(678)
744 
Change in:
 
 
 
 
Cumulative translation adjustment
(575)
(251)
(860)
(131)
Pension liability
10 
(6)
Other comprehensive income (loss), before income tax
(844)
(581)
(1,528)
607 
Income tax (expense) benefit related to OCI items
45 
94 
145 
(151)
Other comprehensive income (loss)
(799)
(487)
(1,383)
456 
Comprehensive income (loss)
(271)
298 
768 
2,754 
Earnings per share
 
 
 
 
Basic earnings per share
$ 1.63 
$ 2.35 
$ 6.60 
$ 6.82 
Diluted earnings per share
$ 1.62 
$ 2.32 
$ 6.53 
$ 6.75 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
 
 
Net realized gains (losses):
 
 
 
 
Total net realized gains (losses) (includes $(49), $(38), $(18), and $(11) reclassified from AOCI)
(49)
(38)
(18)
(11)
Expenses
 
 
 
 
Income tax expense (includes $(4), $5, $10, and $7 on reclassified unrealized gains and losses)
$ (4)
$ 5 
$ 10 
$ 7 
Consolidated Statements Of Operations and Comprehensive Income Consolidated Statements of Operations and Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income tax expense (benefit)
$ 132 
$ 176 
$ 395 
$ 402 
Net realized gains (losses)
(397)
(120)
(360)
(297)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
 
 
Income tax expense (benefit)
(4)
10 
Net realized gains (losses)
$ (49)
$ (38)
$ (18)
$ (11)
Consolidated Statements Of Shareholders' Equity (USD $)
In Millions
Total
Common Stock [Member]
Treasury Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Translation Adjustment [Member]
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance - beginning of period at Dec. 31, 2013
 
$ 8,899 
$ (255)
$ 5,238 
$ 13,791 
$ 1,174 
$ 63 
$ (85)
 
Dividends declared on Common Shares – par value reduction
 
(621)
 
 
 
 
 
 
 
Net shares redeemed under employee share-based compensation plans
 
 
217 
(167)
 
 
 
 
 
Common Shares repurchased
 
 
(1,019)
 
 
 
 
 
 
Exercise of stock options
 
 
 
(44)
 
 
 
 
 
Share-based compensation expense and other
 
 
 
153 
 
 
 
 
 
Funding of dividends declared to Retained earnings
 
 
 
(81)
 
 
 
 
 
Net income
2,298 
 
 
 
2,298 
 
 
 
 
Funding of dividends declared from Additional paid-in capital
 
 
 
 
81 
 
 
 
 
Dividends declared on Common Shares
 
 
 
 
(81)
 
 
 
 
Change in period, before reclassification from AOCI, net of income tax benefit (expense) of $102 and $(168)
 
 
 
 
 
565 
 
 
 
Amounts reclassified from AOCI, net of income tax benefit of $10 and $7
 
 
 
 
 
18 
 
 
 
Change in period, net of income tax benefit (expense) of $112 and $(161)
 
 
 
 
 
583 
 
 
 
Change in period, net of income tax benefit (expense) of $35 and $7
 
 
 
 
 
 
(124)
 
 
Change in period, net of income tax benefit (expense) of $(2) and $3
 
 
 
 
 
 
 
(3)
 
Balance - end of period at Sep. 30, 2014
30,017 
8,278 
(1,057)
5,099 
16,089 
1,757 
(61)
(88)
1,608 
Balance - beginning of period at Dec. 31, 2014
29,587 
8,055 
(1,448)
5,145 
16,644 
1,851 
(581)
(79)
 
Dividends declared on Common Shares – par value reduction
 
(222)
 
 
 
 
 
 
 
Net shares redeemed under employee share-based compensation plans
 
 
208 
(157)
 
 
 
 
 
Common Shares repurchased
 
 
(734)
 
 
 
 
 
 
Exercise of stock options
 
 
 
(43)
 
 
 
 
 
Share-based compensation expense and other
 
 
 
155 
 
 
 
 
 
Funding of dividends declared to Retained earnings
 
 
 
(435)
 
 
 
 
 
Net income
2,151 
 
 
 
2,151 
 
 
 
 
Funding of dividends declared from Additional paid-in capital
 
 
 
 
435 
 
 
 
 
Dividends declared on Common Shares
 
 
 
 
(435)
 
 
 
 
Change in period, before reclassification from AOCI, net of income tax benefit (expense) of $102 and $(168)
 
 
 
 
 
(594)
 
 
 
Amounts reclassified from AOCI, net of income tax benefit of $10 and $7
 
 
 
 
 
28 
 
 
 
Change in period, net of income tax benefit (expense) of $112 and $(161)
 
 
 
 
 
(566)
 
 
 
Change in period, net of income tax benefit (expense) of $35 and $7
 
 
 
 
 
 
(825)
 
 
Change in period, net of income tax benefit (expense) of $(2) and $3
 
 
 
 
 
 
 
 
Balance - end of period at Sep. 30, 2015
$ 29,127 
$ 7,833 
$ (1,974)
$ 4,665 
$ 18,795 
$ 1,285 
$ (1,406)
$ (71)
$ (192)
Consolidated Statements Of Shareholders' Equity (Parenthetical) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Net unrealized appreciation on investments, Change in period, income tax (expense) benefit
$ 112 
$ (161)
Cumulative translation adjustment, Change in period, income tax(expense) benefit
35 
Pension liability adjustment, Change in period, income tax (expense) benefit
(2)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, Tax
102 
(168)
Income tax benefit (expense) from reclassification of unrealized gains
$ 10 
$ 7 
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities
 
 
Net income
$ 2,151 
$ 2,298 
Adjustments to reconcile net income to net cash flows from operating activities
 
 
Net realized (gains) losses
360 
297 
Amortization of premiums/discounts on fixed maturities
115 
159 
Deferred income taxes
53 
41 
Unpaid losses and loss expenses
(225)
180 
Unearned premiums
353 
449 
Future policy benefits
157 
181 
Insurance and reinsurance balances payable
219 
181 
Accounts payable, accrued expenses, and other liabilities
(179)
(130)
Income taxes payable
(8)
94 
Insurance and reinsurance balances receivable
15 
(191)
Reinsurance recoverable on losses and loss expenses
421 
253 
Reinsurance recoverable on policy benefits
20 
(6)
Deferred policy acquisition costs
(354)
(306)
Prepaid reinsurance premiums
(182)
(41)
Other
(217)
(237)
Net cash flows from operating activities
2,699 
3,222 
Cash flows from investing activities
 
 
Purchases of fixed maturities available for sale
(13,029)
(11,867)
Purchases of to be announced mortgage-backed securities
(31)
Purchases of fixed maturities held to maturity
(39)
(185)
Purchases of equity securities
(122)
(222)
Sales of fixed maturities available for sale
5,202 
6,306 
Proceeds From Sales To Be Announced Mortgage Backed Securities
31 
Sales of equity securities
150 
322 
Maturities and redemptions of fixed maturities available for sale
5,257 
4,814 
Maturities and redemptions of fixed maturities held to maturity
552 
617 
Net change in short-term investments
421 
(984)
Net derivative instruments settlements
62 
(170)
Payments to Acquire Businesses, Net of Cash Acquired
259 
(172)
Other
(138)
(147)
Net cash flows used for investing activities
(1,425)
(1,688)
Cash flows from financing activities
 
 
Dividends paid on Common Shares
(644)
(646)
Common Shares repurchased
(758)
(1,007)
Proceeds from issuance of long-term debt
800 
699 
Proceeds from issuance of short-term debt
1,478 
1,827 
Repayments of Long-term Debt
(451)
(501)
Repayment of short-term debt
(1,477)
(1,827)
Proceeds from share-based compensation plans, including windfall tax benefits
89 
94 
Policyholder contract deposits
351 
189 
Policyholder contract withdrawals
(159)
(62)
Other
(6)
(6)
Net cash flows used for financing activities
(777)
(1,240)
Effect of foreign currency rate changes on cash and cash equivalents
(114)
(67)
Net increase in cash
383 
227 
Cash – beginning of period
655 1 2
579 3
Cash – end of period
1,038 2 4
806 3
Supplemental cash flow information
 
 
Taxes paid
335 
250 
Interest paid
$ 188 
$ 186 
Consolidated Statements of Cash Flows (Parentheticals) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Statement of Cash Flows [Abstract]
 
 
Cash Acquired from Acquisition
$ 620 
$ 4 
General
General
General

a) Basis of presentation
ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE Limited 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, including internal reinsurance 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 2014 Form 10-K.

Effective third quarter of 2015, amortization of intangible assets are excluded from Other (income) expense and disclosed separately in the consolidated statements of operations. Prior year amounts have been reclassified to conform to the current year presentation.
  
In addition, we added a new expense caption (Chubb integration expenses), which includes legal and professional fees and all other external costs directly related to the integration activities of the planned Chubb acquisition.

b) Accounting guidance adopted in 2015

Business Combinations Simplifying the Accounting for Measurement-Period Adjustments
In September 2015, the Financial Accounting Standards Board (FASB) issued guidance to simplify the accounting for adjustments made to provisional valuation amounts recognized in a business combination. The guidance requires that the acquirer must recognize adjustments to provisional valuation amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined.  The guidance eliminates the requirement to retrospectively account for such adjustments. Previously, the accounting for measurement-period adjustments required the acquirer to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill.  We early adopted this guidance effective July 1, 2015.  The adoption of this guidance did not have an impact on our financial condition or results of operations.

Disclosures for investments in certain entities that calculate net asset value (NAV)
In May 2015, the FASB issued guidance that eliminated the requirement for investments measured at fair value using NAV as a practical expedient to be categorized within the fair value hierarchy. We early adopted this guidance effective July 1, 2015 and have retrospectively revised prior year fair value hierarchy disclosures contained in this report to conform to the current period presentation. Refer to Note 4 Fair Value Measurement for further information. This guidance requires a change in disclosure only and adoption of this guidance did not have an impact on our financial condition or results of operations.

c) Accounting guidance not yet adopted

Presentation of Debt Issuance Costs
In April 2015, the FASB issued new guidance related to the accounting for debt issuance costs.  The new guidance requires presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge.  The new guidance requires retrospective adoption and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance will not have any effect on our results of operations and financial condition.
Acquisitions
Acquisitions
Acquisitions

Fireman's Fund Insurance Company High Net Worth Personal Lines Insurance Business in the U.S. (Fireman's Fund)
On April 1, 2015, we acquired the Fireman's Fund Insurance Company high net worth personal lines insurance business in the U.S., which included the renewal rights for new and existing business and reinsurance of all existing reserves for $365 million in cash. We acquired assets with a fair value of $749 million, consisting primarily of cash of $620 million and insurance and reinsurance balances receivable of $128 million. We assumed liabilities with a fair value of $858 million, consisting primarily of unpaid losses and loss expenses of $402 million and unearned premiums of $428 million. This acquisition generated $196 million of goodwill, attributable to expected growth and profitability, all of which is expected to be deductible for income tax purposes, and other intangible assets of $278 million, primarily related to renewal rights, based on ACE’s preliminary purchase price allocation. During the third quarter of 2015, we applied the new measurement-period adjustment guidance and recorded an adjustment to the valuation of our other intangible assets. The acquisition expands our position in the high net worth personal lines insurers in the U.S. The Fireman’s Fund business integrates into our existing high net worth personal lines business, ACE Private Risk Services, which offers a broad range of coverage including homeowners, automobile, umbrella and excess liability, collectibles and yachts. Goodwill and other intangible assets arising from this acquisition are included in our Insurance – North American P&C segment.

Large Corporate Account P&C Insurance Business of Itaú Seguros, S.A. (Itaú Seguros)
On October 31, 2014, we expanded our presence in Brazil with the acquisition of the large corporate account property and casualty (P&C) insurance business of Itaú Seguros, Brazil's leading carrier for that business, for $606 million in cash. This acquisition generated $445 million of goodwill, attributable to expected growth and profitability, none of which is currently deductible for income tax purposes, and other intangible assets of $60 million, primarily related to renewal rights. Goodwill may become deductible for income tax purposes under Brazilian tax law if this acquired entity is merged with certain ACE legal entities. 

The Siam Commercial Samaggi Insurance PCL (Samaggi)
We and our local partner acquired 60.86 percent of Samaggi, a general insurance company in Thailand, from Siam Commercial Bank on April 28, 2014, and subsequently acquired an additional 32.17 percent ownership, through a mandatory tender offer, which expired on June 17, 2014. The purchase price for 93.03 percent of the company was $176 million in cash. This acquisition expands our presence in Thailand and Southeast Asia.

The acquisition generated $46 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $80 million based on ACE’s purchase price allocation.  The other intangible assets primarily relate to a bancassurance agreement.

Goodwill and other intangible assets arising from the acquisitions of Itaú Seguros and Samaggi are included in our Insurance – Overseas General segment.

The consolidated financial statements include results of acquired businesses from the acquisition dates.

To be acquired
The Chubb Corporation (Chubb)
On June 30, 2015, we entered into a definitive agreement to acquire Chubb, a leading provider of middle-market commercial, specialty, surety, and personal insurance. Under the terms of the merger agreement, when the transaction closes Chubb will be merged with a newly-formed subsidiary of ACE and Chubb shareholders will receive for each share of Chubb stock an aggregate $62.93 in cash and 0.6019 shares of ACE stock. The initial purchase price, estimated at the time that we entered into the definitive agreement, was $28.3 billion based on the closing price of ACE stock on June 30, 2015 of $101.68 per share. Based on the closing price of ACE stock on September 30, 2015 of $103.40 per share, the purchase price would be approximately $28.8 billion in cash and newly issued stock, and the former Chubb shareholders would own approximately 137 million shares, or 30 percent, of the combined company's outstanding shares. The actual purchase price and related goodwill will increase or decrease until the closing date of the acquisition based on the increase or decrease in ACE's stock price.

The merger agreement provides that following the close of the transaction (i) the acquired businesses will continue to operate under the Chubb names as they do now; (ii) we will change the name of ACE Limited to assume the Chubb name at our parent company level, and (iii) the combined company will transition to operate under the Chubb name globally.

We intend to finance the cash portion of the transaction through a combination of $9 billion sourced from various ACE and Chubb companies plus $5.3 billion of senior notes which were issued in October 2015. Refer to Note 6 for additional information on the senior notes. On September 30, 2015, we received notice from the U.S. Federal Trade Commission that it had granted early termination, effective immediately, of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) for the pending acquisition of Chubb. The early termination of the waiting period under the HSR Act satisfies one of the conditions to the closing of the transaction, which remains subject to other customary closing conditions, including other regulatory approvals.  On October 22, 2015, we received the necessary approvals from shareholders of ACE and Chubb to effect the merger. The transaction is expected to close during the first quarter of 2016.
Investments
Investments
Investments

a) Transfers of securities
During April 2015, we transferred securities, considered essential holdings in a diversified portfolio, with a total fair value of $1.9 billion from Fixed maturities available for sale to Fixed maturities held to maturity. These securities, which we have the intent and ability to hold to maturity, were transferred given the growth in ACE’s investment portfolio over the last several years, as well as continued efforts to manage the diversification of our global portfolio. The net unrealized appreciation at the date of the transfer continues to be reported in the carrying value of the transferred investments and is amortized through OCI over the remaining life of the securities using the effective interest method in a manner consistent with the amortization of any premium or discount. This transfer represents a non-cash transaction and does not impact the consolidated statements of cash flows.

b) Fixed maturities
 
September 30, 2015
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
$
2,800

 
$
85

 
$

 
$
2,885

 
$

Foreign
13,976

 
523

 
(208
)
 
14,291

 
(6
)
Corporate securities
16,790

 
467

 
(365
)
 
16,892

 
(14
)
Mortgage-backed securities
10,858

 
286

 
(25
)
 
11,119

 
(1
)
States, municipalities, and political subdivisions
2,987

 
111

 
(7
)
 
3,091

 

 
$
47,411

 
$
1,472

 
$
(605
)
 
$
48,278

 
$
(21
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
756

 
$
19

 
$
(1
)
 
$
774

 
$

Foreign
784

 
38

 
(4
)
 
818

 

Corporate securities
3,093

 
74

 
(41
)
 
3,126

 

Mortgage-backed securities
1,758

 
60

 
(1
)
 
1,817

 

States, municipalities, and political subdivisions
2,173

 
44

 
(2
)
 
2,215

 

 
$
8,564

 
$
235

 
$
(49
)
 
$
8,750

 
$


December 31, 2014
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
$
2,741

 
$
87

 
$
(8
)
 
$
2,820

 
$

Foreign
14,703

 
629

 
(90
)
 
15,242

 

Corporate securities
16,897

 
704

 
(170
)
 
17,431

 
(7
)
Mortgage-backed securities
10,011

 
304

 
(29
)
 
10,286

 
(1
)
States, municipalities, and political subdivisions
3,474

 
147

 
(5
)
 
3,616

 

 
$
47,826

 
$
1,871

 
$
(302
)
 
$
49,395

 
$
(8
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
832

 
$
20

 
$
(2
)
 
$
850

 
$

Foreign
916

 
47

 

 
963

 

Corporate securities
2,323

 
102

 
(2
)
 
2,423

 

Mortgage-backed securities
1,983

 
57

 
(1
)
 
2,039

 

States, municipalities, and political subdivisions
1,277

 
40

 
(3
)
 
1,314

 

 
$
7,331

 
$
266

 
$
(8
)
 
$
7,589

 
$


As discussed in Note 3 e), if a credit loss is incurred 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 and nine months ended September 30, 2015, $4 million and nil, respectively, of net unrealized depreciation related to such securities is included in OCI. For the three and nine months ended September 30, 2014, $1 million and $6 million, respectively, of net unrealized appreciation related to such securities is included in OCI. At September 30, 2015 and December 31, 2014, AOCI included cumulative net unrealized depreciation of $14 million and $3 million, respectively, related to securities remaining in the investment portfolio 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 7 c) (iv)) and are included in the category, “Mortgage-backed securities”. Approximately 80 percent and 83 percent of the total mortgage-backed securities at September 30, 2015 and December 31, 2014, 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:
 
 
 
September 30

 
 
 
December 31

 
 
 
2015

 
 
 
2014

(in millions of U.S. dollars)
Amortized Cost

 
Fair Value

 
Amortized Cost

 
Fair Value

Available for sale
 
 
 
 
 
 
 
Due in 1 year or less
$
1,979

 
$
1,995

 
$
2,187

 
$
2,206

Due after 1 year through 5 years
16,472

 
16,794

 
15,444

 
15,857

Due after 5 years through 10 years
13,695

 
13,708

 
15,663

 
16,089

Due after 10 years
4,407

 
4,662

 
4,521

 
4,957

 
36,553

 
37,159

 
37,815

 
39,109

Mortgage-backed securities
10,858

 
11,119

 
10,011

 
10,286

 
$
47,411

 
$
48,278

 
$
47,826

 
$
49,395

Held to maturity
 
 
 
 
 
 
 
Due in 1 year or less
$
411

 
$
413

 
$
353

 
$
355

Due after 1 year through 5 years
2,583

 
2,683

 
2,603

 
2,693

Due after 5 years through 10 years
2,278

 
2,300

 
1,439

 
1,489

Due after 10 years
1,534

 
1,537

 
953

 
1,013

 
6,806

 
6,933

 
5,348

 
5,550

Mortgage-backed securities
1,758

 
1,817

 
1,983

 
2,039

 
$
8,564

 
$
8,750

 
$
7,331

 
$
7,589



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

c) Equity securities
 
September 30


December 31

(in millions of U.S. dollars)
2015


2014

Cost
$
434

 
$
440

Gross unrealized appreciation
54

 
83

Gross unrealized depreciation
(24
)
 
(13
)
Fair value
$
464

 
$
510



d) Investments in partially-owned insurance companies
On March 27, 2015 and April 14, 2015, we paid $70 million and $20 million, respectively, to acquire 11.3 percent of the common equity of ABR Reinsurance Capital Holdings Ltd. and warrants to acquire 0.5 percent of additional equity.  ABR Reinsurance Capital Holdings Ltd., is the parent company of ABR Reinsurance Ltd. (ABR Re), an independent reinsurance company. Through long-term arrangements, ACE will be the sole source of reinsurance risks ceded to ABR Re, and BlackRock, Inc. will be ABR Re’s exclusive investment management service provider. As an investor, ACE is expected to benefit from underwriting profit generated by ABR Re’s reinsuring a wide range of ACE’s primary insurance business and the income and capital appreciation BlackRock, Inc. seeks to deliver through its investment management services. In addition, ACE’s long-term arrangements with BlackRock, Inc. include a fee sharing arrangement in which ACE and BlackRock, Inc. will be entitled to an equal share of the aggregate amount of certain fees, including underwriting and investment management performance related fees.

ABR Re is a variable interest entity; however, ACE is not the primary beneficiary and does not consolidate ABR Re because ACE does not have the power to control and direct ABR Re’s most significant activities, including investing and underwriting. Our minority ownership interest is accounted for under the equity method of accounting. ACE cedes premiums to ABR Re and recognizes the associated commissions. For the three and nine months ended September 30, 2015, ACE ceded reinsurance premiums of $35 million and $70 million, respectively, and recognized ceded commissions of $8 million and $19 million, respectively. At September 30, 2015, the amount of Reinsurance recoverable on losses and loss expenses was $54 million and the amount of ceded reinsurance premium payable included in Insurance and reinsurance balances payable in the consolidated balance sheet was $12 million.

e) 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 incurred, 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 other than temporarily impaired. For mutual funds included in equity securities in our consolidated balance sheet, we employ analysis similar to fixed maturities, when applicable.

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. ACE developed projected cash flows for corporate securities using market observable data, issuer-specific information, and credit ratings. We use 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. Consistent with management's approach, ACE assumed a 32 percent recovery rate (the par value of a defaulted security that will be recovered) across all rating categories rather than using Moody's historical mean recovery rate of 42 percent. We believe that use of a default assumption in excess of the historical mean is conservative in light of current market conditions.

For the three and nine months ended September 30, 2015, credit losses recognized in Net income for corporate securities were $14 million and $23 million, respectively. For the three and nine months ended September 30, 2014 credit losses recognized in Net income for corporate securities were $4 million and $14 million, 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.

For the three and nine months ended September 30, 2015 and 2014, there were no credit losses recognized in Net income for mortgage-backed securities.
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
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Fixed maturities:
 
 
 
 
 
 
OTTI on fixed maturities, gross
$
(31
)
 
$
(5
)
$
(57
)
 
$
(20
)
OTTI on fixed maturities recognized in OCI (pre-tax)
5

 
1

11

 
3

OTTI on fixed maturities, net
(26
)
 
(4
)
(46
)

(17
)
Gross realized gains excluding OTTI
19

 
73

91

 
163

Gross realized losses excluding OTTI
(44
)
 
(51
)
(95
)
 
(97
)
Total fixed maturities
(51
)
 
18

(50
)

49

Equity securities:
 
 
 
 
 
 
OTTI on equity securities
(3
)
 

(4
)
 
(7
)
Gross realized gains excluding OTTI
10

 
4

43

 
8

Gross realized losses excluding OTTI
(5
)
 
(60
)
(7
)
 
(61
)
Total equity securities
2

 
(56
)
32


(60
)
OTTI on other investments
(1
)
 

(1
)
 
(3
)
Foreign exchange losses
(2
)
 
(19
)
(73
)
 
(42
)
Investment and embedded derivative instruments
(22
)
 
(13
)
6

 
(53
)
Fair value adjustments on insurance derivative
(396
)
 
(80
)
(337
)
 
(126
)
S&P put options and futures
83

 
(15
)
69

 
(106
)
Other derivative instruments
(9
)
 
45

(10
)
 
52

Other
(1
)
 

4

 
(8
)
Net realized gains (losses)
$
(397
)
 
$
(120
)
$
(360
)

$
(297
)

 
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
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Balance of credit losses related to securities still held – beginning of period
$
23

 
$
24

$
28

 
$
37

Additions where no OTTI was previously recorded
8

 
2

15

 
9

Additions where an OTTI was previously recorded
6

 
2

8

 
5

Reductions for securities sold during the period
(5
)
 
(11
)
(19
)
 
(34
)
Balance of credit losses related to securities still held – end of period
$
32

 
$
17

$
32


$
17



f) Gross unrealized loss
At September 30, 2015, there were 7,876 fixed maturities out of a total of 26,875 fixed maturities in an unrealized loss position. The largest single unrealized loss in the fixed maturities was $4 million. There were 111 equity securities out of a total of 257 equity securities in an unrealized loss position. The largest single unrealized loss in the equity securities was $2 million. Fixed maturities in an unrealized loss position at September 30, 2015, 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.

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
 
September 30, 2015
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
228

 
$
(1
)
 
$
59

 
$

 
$
287

 
$
(1
)
Foreign
3,627

 
(160
)
 
402

 
(52
)
 
4,029

 
(212
)
Corporate securities
6,641

 
(322
)
 
801

 
(84
)
 
7,442

 
(406
)
Mortgage-backed securities
2,145

 
(16
)
 
626

 
(10
)
 
2,771

 
(26
)
States, municipalities, and political subdivisions
766

 
(7
)
 
57

 
(2
)
 
823

 
(9
)
Total fixed maturities
13,407

 
(506
)
 
1,945

 
(148
)
 
15,352

 
(654
)
Equity securities
151

 
(24
)
 

 

 
151

 
(24
)
Other investments
83

 
(2
)
 

 

 
83

 
(2
)
Total
$
13,641

 
$
(532
)
 
$
1,945

 
$
(148
)
 
$
15,586

 
$
(680
)
 
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
December 31, 2014
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
350

 
$
(1
)
 
$
666

 
$
(9
)
 
$
1,016

 
$
(10
)
Foreign
2,262

 
(75
)
 
375

 
(15
)
 
2,637

 
(90
)
Corporate securities
4,684

 
(150
)
 
738

 
(22
)
 
5,422

 
(172
)
Mortgage-backed securities
704

 
(2
)
 
1,663

 
(28
)
 
2,367

 
(30
)
States, municipalities, and political subdivisions
458

 
(3
)
 
490

 
(5
)
 
948

 
(8
)
Total fixed maturities
8,458

 
(231
)
 
3,932

 
(79
)
 
12,390

 
(310
)
Equity securities
101

 
(13
)
 

 

 
101

 
(13
)
Total
$
8,559

 
$
(244
)
 
$
3,932

 
$
(79
)
 
$
12,491

 
$
(323
)


g) 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 repurchase agreements, which represent ACE's agreement to sell securities and repurchase them at a future date for a predetermined price. 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 LOC and derivative transactions. Included in restricted assets at September 30, 2015 and December 31, 2014, are investments, primarily fixed maturities, totaling $16.2 billion and $16.3 billion, respectively, and cash of $79 million and $117 million, respectively.
The following table presents the components of restricted assets:
 
September 30

 
December 31

(in millions of U.S. dollars)
2015

 
2014

Trust funds
$
10,990

 
$
10,838

Deposits with non-U.S. regulatory authorities
2,105

 
2,305

Assets pledged under repurchase agreements
1,468

 
1,431

Deposits with U.S. regulatory authorities
1,322

 
1,345

Other pledged assets
388

 
457

 
$
16,273

 
$
16,376

Fair value measurements
Fair value measurements
Fair value measurements

Effective July 1, 2015, we retrospectively adopted new accounting guidance that no longer requires investments measured at fair value using NAV to be categorized within the fair value hierarchy. Therefore, we no longer include our investments in partially-owned investment companies, investment funds, and limited partnerships within the fair value hierarchy and the Level 3 rollforward tables disclosed below. Prior period amounts within the fair value hierarchy disclosures contained in this section have been revised to conform to the current period presentation.

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 (an exit price) in an orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs. 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 pricing services to obtain fair value measurements for the majority of our investment securities. 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 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, fixed maturities valuation 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 an investment's estimated fair value 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 single broker quote (typically from 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 equity securities in markets which are less active, 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. Short-term investments for which pricing is unobservable are classified within Level 3.

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) and are excluded from the fair value hierarchy table below. Certain of our long-duration contracts are supported by 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 include equity securities classified within Level 1, and fixed maturities, classified within Level 2, held in rabbi trusts maintained by ACE for deferred compensation plans, and are classified within the valuation hierarchy on the same basis as other equity securities and fixed maturities. Other investments for which pricing is unobservable are classified within Level 3.

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 in the consolidated balance sheets.

Investment derivative instruments
Actively traded investment derivative instruments, including futures, options, and forward contracts are classified within Level 1 as fair values are based on quoted market prices. The fair value of cross-currency swaps are based on market valuations and are classified within Level 2. Investment derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Other derivative instruments
We generally 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, an increase in 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. At September 30, 2015, we held no positions in option contracts on equity market indices. 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. Other derivative instruments based on unobservable inputs are classified within Level 3. Other derivative instruments are recorded in either Other assets or 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 within Level 1 in the valuation hierarchy on the same basis as other equity securities traded in active markets. 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 factors, including interest rates, equity markets, credit risk, current account value, market volatility, expected annuitization rates, and other 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.

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.

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.

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 regularly re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of updated information such as market conditions, market participant assumptions, and demographics of in-force annuities. Because of the significant use of unobservable inputs including policyholder behavior, GLB reinsurance is classified within Level 3. For the three and nine months ended September 30, 2015 and 2014, no material technical refinements were made to the model. For detailed information on our lapse and annuitization rate assumptions, refer to Note 4 to the Consolidated Financial Statements of our 2014 Form 10-K.

Financial instruments measured at fair value on a recurring basis, by valuation hierarchy
September 30, 2015
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,919

 
$
966

 
$

 
$
2,885

Foreign

 
14,238

 
53

 
14,291

Corporate securities

 
16,709

 
183

 
16,892

Mortgage-backed securities

 
11,065

 
54

 
11,119

States, municipalities, and political subdivisions

 
3,091

 

 
3,091

 
1,919

 
46,069

 
290

 
48,278

Equity securities
455

 
5

 
4

 
464

Short-term investments
703

 
1,105

 

 
1,808

Other investments (1)
314

 
218

 
209

 
741

Securities lending collateral

 
1,011

 

 
1,011

Investment derivative instruments
17

 

 

 
17

Other derivative instruments
26

 

 

 
26

Separate account assets
1,423

 
83

 

 
1,506

Total assets measured at fair value (1)
$
4,857

 
$
48,491

 
$
503

 
$
53,851

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
27

 
$

 
$

 
$
27

Other derivative instruments

 

 
7

 
7

GLB (2)

 

 
744

 
744

Total liabilities measured at fair value
$
27

 
$

 
$
751

 
$
778

(1) 
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $2,504 million and other investments of $25 million at September 30, 2015 measured using NAV. Based on new accounting guidance adopted this quarter, these investments are excluded from the hierarchy table.
(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
 
December 31, 2014
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,680

 
$
1,140

 
$

 
$
2,820

Foreign

 
15,220

 
22

 
15,242

Corporate securities

 
17,244

 
187

 
17,431

Mortgage-backed securities

 
10,271

 
15

 
10,286

States, municipalities, and political subdivisions

 
3,616

 

 
3,616

 
1,680

 
47,491

 
224

 
49,395

Equity securities
492

 
16

 
2

 
510

Short-term investments
1,183

 
1,139

 

 
2,322

Other investments (1)
370

 
211

 
204

 
785

Securities lending collateral

 
1,330

 

 
1,330

Investment derivative instruments
18

 

 

 
18

Other derivative instruments

 
2

 

 
2

Separate account assets
1,400

 
90

 

 
1,490

Total assets measured at fair value (1)
$
5,143

 
$
50,279

 
$
430

 
$
55,852

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
36

 
$

 
$

 
$
36

Other derivative instruments
21

 

 
4

 
25

GLB (2)

 

 
406

 
406

Total liabilities measured at fair value
$
57

 
$

 
$
410

 
$
467


(1) 
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $2,561 million at December 31, 2014 measured using NAV. Based on new accounting guidance adopted this quarter, these investments are excluded from the hierarchy table.
(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

There were no transfers between Level 1 and Level 2 for the three and nine months ended September 30, 2015 and 2014.

Fair value of alternative investments
Alternative investments include investment funds, limited partnerships, and partially-owned investment companies measured at fair value using NAV as a practical expedient.

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments:
 
 
 
 
 
September 30

 
 
 
December 31

 
Expected
Liquidation
Period of Underlying Assets
 
 
 
2015

 
 
 
2014

(in millions of U.S. dollars)
Fair
Value

 
Maximum
Future Funding
Commitments

 
Fair
Value

 
Maximum
Future Funding
Commitments

Financial
5 to 9 Years
 
$
309

 
$
107

 
$
282

 
$
145

Real Assets
3 to 7 Years
 
473

 
168

 
451

 
210

Distressed
5 to 9 Years
 
265

 
231

 
232

 
175

Private Credit
3 to 7 Years
 
272

 
226

 
299

 
190

Traditional
3 to 9 Years
 
885

 
184

 
908

 
289

Vintage
1 to 2 Years
 
14

 

 
11

 
1

Investment funds
Not Applicable
 
286

 

 
378

 

 
 
 
$
2,504

 
$
916

 
$
2,561

 
$
1,010



In 2015, we redefined and regrouped certain alternative investment categories to better align with our management approach. The prior year amounts have been reclassified to conform to the current year presentation. 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. 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.
Investment Category
 
Consists of investments in private equity funds:
Financial
 
targeting financial services companies such as financial institutions and insurance services worldwide
Real Assets
 
targeting investments related to hard physical assets such as real estate, infrastructure and natural resources
Distressed
 
targeting distressed corporate debt/credit and equity opportunities in the U.S.
Private Credit
 
targeting privately originated corporate debt investments including senior secured loans and subordinated bonds
Traditional
 
employing traditional private equity investment strategies such as buyout and growth equity globally
Vintage
 
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 values 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 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 determine the fair value of Level 3 assets which are based on single broker quotes and contain no quantitative unobservable inputs developed by management. 
(in millions of U.S. dollars, except for percentages)
Fair Value
 
Valuation
Technique
 
Significant
Unobservable Inputs
 
Ranges
September 30, 2015

 
December 31, 2014

 
 
 
GLB(1)
$
744

 
$
406

 
Actuarial model
 
Lapse rate
 
1% – 30%
 
 
 
 
 
 
 
Annuitization rate
 
0% – 55%
(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).
 
Assets
 
 
 
Liabilities

Three Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

Other
investments

 
Other
derivative
instruments

GLB(1)

September 30, 2015
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
56

 
$
167

 
$
55

 
$
2

$
214

 
$
3

$
347

Transfers into Level 3
1

 
2

 

 


 


Change in Net Unrealized Gains (Losses) included in OCI
1

 
1

 

 
2

(7
)
 


Net Realized Gains/Losses
(1
)
 
(1
)
 

 
(1
)

 
4

397

Purchases

 
22

 

 
1

5

 


Sales

 
(5
)
 
(1
)
 


 


Settlements
(4
)
 
(3
)
 

 

(3
)
 


Balance–End of Period
$
53

 
$
183

 
$
54

 
$
4

$
209

 
$
7

$
744

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

 
$

 
$
(1
)
$

 
$
4

$
397

(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
  
Assets
 
 
Liabilities

Three Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Other
investments

 
GLB(1)

September 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
203

 
$
241

Transfers into Level 3
1

 
5

 

 

 

 

Change in Net Unrealized Gains (Losses) included in OCI

 
(1
)
 

 

 
(1
)
 

Net Realized Gains/Losses

 
2

 

 

 

 
76

Purchases

 
20

 
8

 

 
6

 

Sales
(1
)
 
(9
)
 

 

 

 

Settlements

 
(13
)
 

 

 
(3
)
 

Balance–End of Period
$
12

 
$
208

 
$
15

 
$
2

 
$
205

 
$
317

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

 
$

 
$

 
$

 
$

 
$
76

(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 liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $566 million at September 30, 2014, and $486 million at June 30, 2014, which includes a fair value derivative adjustment of $317 million and $241 million, respectively.

 
 
 
 
 
 
 
 
Assets

 
 
Liabilities

Nine Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

Other
investments

 
Other
derivative
instruments

GLB(1)

September 30, 2015
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
22

 
$
187

 
$
15

 
$
2

$
204

 
4

$
406

Transfers into Level 3
29

 
15

 

 


 


Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
1

 

 
2

(7
)
 


Net Realized Gains/Losses
(1
)
 
(4
)
 

 
(2
)

 
3

338

Purchases
9

 
38

 
41

 
2

21

 


Sales
(1
)
 
(10
)
 
(1
)
 


 


Settlements
(4
)
 
(44
)
 
(1
)
 

(9
)
 


Balance–End of Period
$
53

 
$
183

 
$
54

 
$
4

$
209

 
$
7

$
744

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
$
(1
)
 
$
(2
)
 
$

 
$
(2
)
$

 
$
3

$
338

(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

  
Assets
 
 
Liabilities

Nine Months Ended
Available-for-Sale Debt Securities
 
 
 
 
Short-term investments

 
Other investments

 
GLB(1)

September 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
Equity
securities

 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
 
Balance–Beginning of Period
$
44

 
$
166

 
$
8

 
$
4

 
$
7

 
$
196

 
$
193

Transfers into Level 3
3

 
35

 

 

 

 

 

Transfers out of Level 3
(34
)
 
(22
)
 

 
(2
)
 
(7
)
 

 

Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
1

 

 
1

 

 
1

 

Net Realized Gains/Losses
1

 
2

 

 

 

 

 
124

Purchases
2

 
65

 
8

 
1

 

 
15

 

Sales
(3
)
 
(17
)
 

 
(2
)
 

 

 

Settlements

 
(22
)
 
(1
)
 

 

 
(7
)
 

Balance–End of Period
$
12

 
$
208

 
$
15

 
$
2

 
$

 
$
205

 
$
317

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

 
$

 
$

 
$

 
$

 
$

 
$
124

(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 liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $566 million at September 30, 2014 and $427 million at December 31, 2013, which includes a fair value derivative adjustment of $317 million and $193 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 and are excluded from the valuation hierarchy tables below.

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 tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at fair value:
September 30, 2015
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
599

 
$
175

 
$

 
$
774

 
$
756

Foreign

 
818

 

 
818

 
784

Corporate securities

 
3,112

 
14

 
3,126

 
3,093

Mortgage-backed securities

 
1,817

 

 
1,817

 
1,758

States, municipalities, and political subdivisions

 
2,215

 

 
2,215

 
2,173

Total assets
$
599

 
$
8,137

 
$
14

 
$
8,750

 
$
8,564

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$

 
$
2,105

 
$

 
$
2,105

 
$
2,103

Long-term debt

 
4,376

 

 
4,376

 
4,157

Trust preferred securities

 
457

 

 
457

 
309

Total liabilities
$

 
$
6,938

 
$

 
$
6,938

 
$
6,569


December 31, 2014
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
659

 
$
191

 
$

 
$
850

 
$
832

Foreign

 
963

 

 
963

 
916

Corporate securities

 
2,408

 
15

 
2,423

 
2,323

Mortgage-backed securities

 
2,039

 

 
2,039

 
1,983

States, municipalities, and political subdivisions

 
1,314

 

 
1,314

 
1,277

Total assets
$
659


$
6,915


$
15


$
7,589


$
7,331

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$

 
$
2,571

 
$

 
$
2,571

 
$
2,552

Long-term debt

 
3,690

 

 
3,690

 
3,357

Trust preferred securities

 
462

 

 
462

 
309

Total liabilities
$

 
$
6,723

 
$

 
$
6,723

 
$
6,218

Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts
Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts
Assumed life reinsurance programs involving minimum benefit guarantees under variable 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
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

 
2015

 
2014

GMDB
 
 
 
 
 
 
 
Net premiums earned
$
15

 
$
17

 
$
47

 
$
54

Policy benefits and other reserve adjustments
$
5

 
$
12

 
$
25

 
$
40

GLB
 
 
 
 
 
 
 
Net premiums earned
$
30

 
$
35

 
$
92

 
$
105

Policy benefits and other reserve adjustments
15

 
8

 
34

 
27

Net realized gains (losses)
(397
)
 
(76
)
 
(338
)
 
(124
)
Loss recognized in Net income
$
(382
)
 
$
(49
)
 
$
(280
)
 
$
(46
)
Less: Net cash received
20

 
31

 
74

 
93

Net increase in liability
$
(402
)
 
$
(80
)
 
$
(354
)
 
$
(139
)


Net realized gains (losses) in the table above include gains (losses) related to foreign exchange and fair value adjustments on insurance derivatives and exclude gains (losses) on S&P put options and futures held to partially offset the risk in the GLB reinsurance portfolio. Refer to Note 7 for additional information.

At September 30, 2015 and December 31, 2014, the reported liability for GMDB reinsurance was $113 million and $111 million, respectively. At September 30, 2015 and December 31, 2014, the reported liability for GLB reinsurance was $1.0 billion and $663 million, respectively, which includes a fair value derivative adjustment of $744 million and $406 million, respectively. 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 regularly reviewed by management and enhanced, as appropriate, based upon improvements in modeling assumptions and availability of updated information, such as market conditions and demographics of in-force annuities.
Debt
Debt Disclosure [Text Block]
Debt

In March 2015, ACE INA Holdings Inc. (ACE INA) issued $800 million of 3.15 percent senior notes due March 2025. These senior notes are redeemable at any time at ACE INA's option subject to a “make-whole” premium (the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate plus 0.15 percent). The notes are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law. These notes do not have the benefit of any sinking fund.  These senior unsecured notes are guaranteed on a senior basis by ACE Limited and they rank equally with all of ACE's other senior obligations.  They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

In May 2015, ACE INA's $450 million of 5.6 percent senior notes matured and were fully paid.

Subsequent Event
In October 2015, ACE INA issued $5.3 billion of senior notes comprising $1.3 billion of 2.30 percent senior notes due November 2020 (2020 Notes), $1.0 billion of 2.875 percent senior notes due November 2022 (2022 Notes), $1.5 billion of 3.35 percent senior notes due May 2026 (2026 Notes), and $1.5 billion of 4.35 percent senior notes due November 2045 (2045 Notes). The proceeds from the issuance of these notes are expected to be used to finance a portion of the Chubb acquisition. However, if the Chubb acquisition is not consummated or the merger agreement is terminated on or prior to September 30, 2016, ACE INA will be required to redeem all of the notes at a price equivalent to 101 percent of the principal amount, plus accrued and unpaid interest, if any.

ACE INA may redeem some or all of the notes at its option one month (for the 2020 Notes), two months (for the 2022 Notes), three months (for the 2026 Notes), and six months (for the 2045 Notes) prior to the respective maturity dates at a redemption price equal to 100 percent of the principal amount of the notes plus accrued and unpaid interest. Otherwise, these notes are redeemable at any time at ACE INA's option subject to a “make-whole” premium, defined as the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate plus 0.15 percent (for the 2020 Notes), 0.20 percent (for the 2022 Notes), 0.20 percent (for the 2026 Notes), and 0.25 percent, (for the 2045 Notes). The remaining terms of the senior notes are commensurate with those of our existing senior notes as described above.
Commitments, contingencies, and guarantees
Commitments, contingencies, and guarantees
Commitments, contingencies, and guarantees

a) Derivative instruments
Foreign currency management
As a global company, ACE entities transact business in multiple currencies. Our policy is to generally match assets, liabilities and required capital for each individual jurisdiction in local currency, which would include the use of derivatives discussed below. We do not hedge our net asset non-USD capital positions, however we do consider hedging for planned cross border transactions.

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. ACE also maintains positions in convertible securities that contain embedded derivatives. Investment derivative instruments are recorded in either Other assets (OA) or Accounts payable, accrued expenses, and other liabilities (AP), convertible bonds are recorded in Fixed maturities available for sale (FM AFS) and convertible equity securities are recorded in Equity securities (ES) in the consolidated balance sheets. These are the most numerous and frequent derivative transactions.

In addition, ACE from time to time purchases to be announced mortgage-backed securities (TBAs) as part of its investing activities.

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 AP. ACE also generally 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. At September 30, 2015, we held no positions in option contracts on equity market indices.

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 of derivative instruments in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:
 
 
 
 
 
September 30, 2015
 
 
 
 
December 31, 2014
 
 
Consolidated
Balance Sheet
Location
 
Fair Value
 
 
Notional
Value/
Payment
Provision

 
Fair Value
 
 
Notional
Value/
Payment
Provision

(in millions of U.S. dollars)
 
Derivative Asset

 
Derivative (Liability)

 
 
Derivative Asset

 
Derivative (Liability)

 
Investment and embedded derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
OA / (AP)
 
$
10

 
$
(11
)
 
$
1,139

 
$
12

 
$
(7
)
 
$
1,329

Cross-currency swaps
OA / (AP)
 

 

 
95

 

 

 
95

Futures contracts on money market instruments
OA / (AP)
 
1

 
(5
)
 
3,799

 

 

 
2,467

Options/Futures contracts on notes and bonds
OA / (AP)
 
6

 
(11
)
 
1,238

 
6

 
(29
)
 
1,636

Convertible securities(1)
FM AFS / ES
 
222

 

 
222

 
291

 

 
267

 
 
 
$
239

 
$
(27
)
 
$
6,493

 
$
309

 
$
(36
)
 
$
5,794

Other derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Futures contracts on equities (2)
OA / (AP)
 
$
23

 
$

 
$
1,123

 
$

 
$
(21
)
 
$
1,384

Options on equity market indices (2)
OA / (AP)
 

 

 

 
2

 

 
250

Other
OA / (AP)
 
3

 
(7
)
 
66

 

 
(4
)
 
10

 
 
 
$
26

 
$
(7
)
 
$
1,189

 
$
2

 
$
(25
)
 
$
1,644

GLB(3)
(AP) / (FPB)
 


 
$
(1,017
)
 
$
1,224

 


 
$
(663
)
 
$
675


(1) 
Includes fair value of embedded derivatives.
(2) 
Related to GMDB and GLB blocks of business.
(3) 
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.

At September 30, 2015 and December 31, 2014, derivative assets of $19 million and derivative liabilities of $34 million, respectively, included in the table above were subject to a master netting agreement. The remaining derivatives included in the table above were not subject to a master netting agreement. 

b) Secured borrowings
ACE participates in a securities lending program operated by a third-party banking institution whereby certain assets are loaned to qualified borrowers and from which we earn an incremental return. At September 30, 2015 and December 31, 2014, our securities lending collateral was $1,011 million and $1,330 million, respectively, and our securities lending payable, reflecting our obligation to return the collateral plus interest, was $1,012 million and $1,331 million, respectively. At September 30, 2015 the securities lending collateral held by ACE on overnight and continuous securities lending contracts comprised $492 million of Cash, $385 million of Foreign securities, $77 million of U.S. Treasury and agency securities, and $57 million of Corporate securities. The carrying value of the securities lending collateral held is $1 million lower than the securities lending payable due to accrued interest recorded in the securities lending payable. The securities lending collateral can only be drawn down by ACE in the event that the institution borrowing the securities is in default under the lending agreement. An indemnification agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of the securities on loan. The collateral is recorded in Securities lending collateral and the liability is recorded in Securities lending payable in the consolidated balance sheets.

At September 30, 2015 and December 31, 2014, our repurchase agreement obligations of $1,403 million and $1,402 million, respectively, were fully collateralized. In contrast to securities lending programs, the use of cash received is not restricted for the repurchase obligations. The fair value of the underlying securities sold remains in Fixed maturities available for sale and Equity securities and the repurchase agreement obligation is recorded in Short-term debt in the consolidated balance sheets.  

The following table presents the carrying value of collateral pledged under repurchase agreements by investment category and maturity date of the underlying agreements:
 
Remaining contractual maturity
 
September 30, 2015
 
Up to 30 Days

 
30 - 90 Days

 
Greater than 90 Days

 
Total

(in millions of U.S. dollars)
 
 
 
 
Collateral pledged under repurchase agreements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
$

 
$

 
$
8

 
$
8

U.S. Treasury and agency
 
172

 
61

 
7

 
240

Mortgage-backed securities
 
250

 
94

 
876

 
1,220

 
 
$
422

 
$
155

 
$
891

 
$
1,468

Gross amount of recognized liabilities for repurchase agreements
 
 
 
 
 
 
 
$
1,403

Difference(1)
 
 
 
 
 
 
 
$
65

(1) 
Per the repurchase agreements, the amount of collateral posted is required to exceed the amount of gross liability.

Potential risks exist in our secured borrowing transactions due to market conditions and counterparty exposure.  With collateral that we pledge, there is a risk that the collateral may not be returned at the expiration of the agreement. If the counterparty fails to return the collateral, ACE will have free use of the borrowed funds until our collateral is returned.  In addition, we may encounter the risk that ACE may not be able to renew outstanding borrowings with a new term or with an existing counterparty due to market conditions including a decrease in demand as well as more restrictive terms from banks due to increased regulatory and capital constraints. Should this condition occur, ACE may seek alternative borrowing sources or reduce borrowings.  Additionally, increased margins and collateral requirements due to market conditions would increase our restricted assets as we are required to provide additional collateral to support the transaction.

The following table presents net realized gains (losses) related to derivative instrument activity in the consolidated statements of operations:
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Investment and embedded derivative instruments
 
 
 
 
 
 
Foreign currency forward contracts
$
15

 
$
19

$
30

 
$
15

All other futures contracts and options
(23
)
 
(15
)
(10
)
 
(55
)
Convertible securities(1)
(14
)
 
(17
)
(14
)
 
(13
)
Total investment and embedded derivative instruments
$
(22
)
 
$
(13
)
$
6


$
(53
)
GLB and other derivative instruments
 
 
 
 
 
 
GLB(2)
$
(396
)
 
$
(80
)
$
(337
)
 
$
(126
)
Futures contracts on equities(3)
84

 
(15
)
71

 
(103
)
Options on equity market indices(3)
(1
)
 

(2
)
 
(3
)
Other
(9
)
 
45

(10
)
 
52

Total GLB and other derivative instruments
$
(322
)
 
$
(50
)
$
(278
)

$
(180
)
 
$
(344
)
 
$
(63
)
$
(272
)

$
(233
)
(1) 
Includes embedded derivatives.
(2) 
Excludes foreign exchange gains (losses) related to GLB.
(3) 
Related to GMDB and GLB blocks of business.

c) 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 as discussed above.

(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, an increase in 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, an increase in 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.

Cross-currency swaps
Cross-currency swaps are agreements under which two counterparties exchange interest payments and principal denominated in different currencies at a future date.  We use cross-currency swaps to reduce the foreign currency and interest rate risk by converting cash flows back into local currency.  We invest in foreign currency denominated investments to improve credit diversification and also to obtain better duration matching to our liabilities that is limited in the local currency market.

Other
Included within Other are derivatives intended to reduce potential losses which may arise from certain exposures in our insurance business.  The economic benefit provided by these derivatives is similar to purchased reinsurance.  For example, ACE may enter into crop derivative contracts to protect underwriting results in the event of a significant decline in commodity prices. Also included within Other are certain life insurance products that meet the definition of a derivative instrument for accounting purposes. 

(iii) Convertible security investments
A convertible security is a debt instrument or preferred stock that can be converted into a predetermined amount of the issuer’s equity. The convertible option is an embedded derivative within the host instruments which are classified in the investment portfolio as either available for sale or as an equity security. ACE purchases convertible securities for their total return and not specifically for the conversion feature.

(iv) TBA
By acquiring TBAs, we make a commitment to purchase a future issuance of mortgage-backed securities. For the period between purchase of the TBAs 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 deferred annuity contracts or the expiry of the reinsurance treaty. 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 an 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.

d) Fixed maturities
At September 30, 2015, we have commitments to purchase fixed income securities of $280 million over the next several years.

e) Other investments
At September 30, 2015, included in Other investments in the consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $2.2 billion. In connection with these investments, we have commitments that may require funding of up to $916 million over the next several years. 

f) Taxation
At September 30, 2015, $22 million of unrecognized tax benefits remains outstanding. 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. With few exceptions, ACE is no longer subject to state and local or non-U.S. income tax examinations for years before 2005.

g) Legal proceedings
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 could be, but we believe is not likely to be, material to our consolidated financial condition and results of operations.
Shareholders' equity
Shareholders' equity
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 consolidated financial statements. Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value reduction) or from legal reserves, must be stated in Swiss francs though dividend payments are made by ACE in U.S. dollars.

At our May 2013 annual general meeting, our shareholders approved an annual dividend for the following year of $2.04 per share, payable in four quarterly installments of $0.51 per share after the annual general meeting in the form of a distribution by way of a par value reduction. At the January 10, 2014 extraordinary general meeting, our shareholders approved a resolution to increase our quarterly dividend from $0.51 per share to $0.63 per share for the final two quarterly installments (made on January 31, 2014 and April 17, 2014) that had been earlier approved at our 2013 annual general meeting. The $0.12 per share increase for each installment was distributed from capital contribution reserves (Additional paid-in capital), a subaccount of legal reserves, and transferred to free reserves (Retained earnings) for payment, while the existing $0.51 per share was distributed by way of a par value reduction.

At our May 2014 annual general meeting, our shareholders approved an annual dividend for the following year of $2.60 per share, payable in four quarterly installments of $0.65 per share after the annual general meeting in the form of a distribution by way of a par value reduction.

At our May 2015 annual general meeting, our shareholders approved an annual dividend for the following year of up to $2.68 per share, expected to be paid in four quarterly installments of $0.67 per share after the annual general meeting by way of a distribution from capital contribution reserves, transferred to free reserves for payment. The Board of Directors (Board) will determine the record and payment dates at which the annual dividend may be paid, and is authorized to abstain from distributing a dividend in its discretion, until the date of the 2016 annual general meeting. The first two quarterly installments, each of $0.67 per share, have been distributed by the Board as expected.

The following table presents dividend distributions per Common Share in Swiss francs (CHF) and U.S. dollars (USD):
 
Three Months Ended
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
 
2015
 
 
2014
 
 
2015
 
 
2014
 
CHF

 
USD

 
CHF

 
USD

 
CHF

 
USD

 
CHF

 
USD

Dividends – par value reduction

 
$


 
0.61

 
$
0.65

 
0.62

 
$
0.65

 
1.64

 
$
1.81

Dividends  distributed from capital contribution reserves
0.65

 
0.67

 

 

 
1.27

 
1.34

 
0.20

 
0.24

Total dividend distributions per common share
0.65

 
$
0.67

 
0.61

 
$
0.65

 
1.89

 
$
1.99

 
1.84

 
$
2.05



Par value reductions have been reflected as such through Common Shares in the consolidated statements of shareholders' equity and had the effect of reducing par value per Common Share to CHF 24.15 at September 30, 2015.

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 September 30, 2015, 18,770,044 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans.

ACE Limited securities repurchase authorization
In November 2014, the Board announced authorization of a share repurchase program of $1.5 billion of ACE's Common Shares for the period January 1, 2015 through December 31, 2015 to replace the November 2013 authorization when it expired on December 31, 2014.

In November 2013, the Board announced authorization of a share repurchase program of up to $2.0 billion of ACE's Common Shares through December 31, 2014.

The following table presents repurchases of ACE's Common Shares conducted in a series of open market transactions under the Board authorizations:
(in millions of U.S. dollars, except share data)
Three Months Ended
September 30
 
 
Nine Months Ended
September 30
 
2015

 
2014

 
2015

 
2014

Number of shares repurchased

 
4,349,302

 
6,677,663

 
10,143,184

Cost of shares repurchased
$

 
$
450

 
$
734

 
$
1,019

Repurchase authorization remaining at end of period
$
766

 
$
924

 
$
766

 
$
924

Share-based compensation
Share-based compensation
Share-based compensation

The ACE Limited 2004 Long-Term Incentive Plan (the 2004 LTIP) permits grants of both incentive and non-qualified stock options principally at an option price per share equal to the grant date fair value of ACE’s Common Shares. Stock options are generally granted with a 3-year vesting period and a 10-year term. Stock options typically vest in equal annual installments over the vesting period, which is also the requisite service period. On February 26, 2015, ACE granted 1,891,195 stock options with a weighted-average grant date fair value of $18.49 each. The fair value of the options issued is estimated on the grant date using the Black-Scholes option pricing model.

The 2004 LTIP also permits 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 grant date. On February 26, 2015, ACE granted 1,278,250 restricted stock awards and 290,475 restricted stock units to employees and officers with a grant date fair value of $114.78 each. Each restricted stock unit represents our obligation to deliver to the holder one Common Share upon vesting.
Segment information
Segment information
Segment information

ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, 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.

Corporate includes the results of ACE’s non-insurance subsidiaries, including ACE Limited, ACE Group Management and Holdings Ltd., and ACE INA Holdings, Inc.  Corporate results consist primarily of interest expense, corporate staff expenses, Chubb integration expenses and other expenses not attributable to specific reportable segments, and intersegment eliminations.

For segment reporting purposes, certain items have been presented in a different manner below 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 Insurance – North American Agriculture segment, management includes gains and losses on crop derivatives as a component of underwriting income. For example, for the three months ended September 30, 2015, underwriting income in our Insurance – North American Agriculture segment was $73 million. This amount includes $4 million of realized losses related to crop derivatives which are included in Net realized gains (losses) below. For the Life segment, management includes Net investment income and (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP as components of Life underwriting income. For example, for the three months ended September 30, 2015, Life underwriting income of $64 million includes Net investment income of $66 million and losses from fair value changes in separate account assets of $49 million.

The following tables present the Statement of Operations by segment:
For the Three Months Ended September 30, 2015
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,711

 
$
737

 
$
1,584

 
$
185

 
$
492

 
$

 
$
4,709

Net premiums earned
1,682

 
739

 
1,615

 
203

 
480

 

 
4,719

Losses and loss expenses
1,175

 
620

 
674

 
20

 
153

 
1

 
2,643

Policy benefits

 

 

 

 
89

 

 
89

Policy acquisition costs
155

 
42

 
405

 
52

 
117

 

 
771

Administrative expenses
192

 

 
246

 
12

 
74

 
44

 
568

Underwriting income (loss)
160

 
77

 
290

 
119

 
47

 
(45
)
 
648

Net investment income
266

 
5

 
132

 
76

 
66

 
4

 
549

Net realized gains (losses) including OTTI
(33
)
 
(4
)
 
(13
)
 
(14
)
 
(326
)
 
(7
)
 
(397
)
Interest expense
3

 

 
1

 
1

 
1

 
62

 
68

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
49

 

 
49

Other
(16
)
 
(1
)
 
(6
)
 
(2
)
 
(13
)
 
1

 
(37
)
Amortization of intangible assets
31

 
8

 
12

 

 

 

 
51

Chubb integration expenses

 

 

 

 

 
9

 
9

Income tax expense (benefit)
70

 
15

 
76

 
8

 
8

 
(45
)
 
132

Net income (loss)
$
305

 
$
56

 
$
326

 
$
174

 
$
(258
)
 
$
(75
)
 
$
528


For the Three Months Ended September 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,541

 
$
764

 
$
1,719

 
$
208

 
$
497

 
$

 
$
4,729

Net premiums earned
1,518

 
766

 
1,726

 
255

 
489

 

 
4,754

Losses and loss expenses
1,053

 
686

 
707

 
92

 
145

 
1

 
2,684

Policy benefits

 

 

 

 
125

 

 
125

Policy acquisition costs
169

 
41

 
418

 
74

 
123

 

 
825

Administrative expenses
165

 
3

 
258

 
13

 
71

 
44

 
554

Underwriting income (loss)
131

 
36

 
343

 
76

 
25

 
(45
)
 
566

Net investment income
277

 
6

 
130

 
81

 
69

 
3

 
566

Net realized gains (losses) including OTTI
(5
)
 
45

 
(75
)
 
6

 
(89
)
 
(2
)
 
(120
)
Interest expense
2

 

 
2

 
1

 
4

 
61

 
70

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
6

 

 
6

Other
(31
)
 
(1
)
 
(13
)
 
(10
)
 
(3
)
 
6

 
(52
)
Amortization of intangible assets

 
8

 
19

 

 

 

 
27

Income tax expense (benefit)
73

 
23

 
97

 
11

 
12

 
(40
)
 
176

Net income (loss)
$
359

 
$
57

 
$
293

 
$
161

 
$
(14
)
 
$
(71
)
 
$
785


For the Nine Months Ended September 30, 2015
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
5,116

 
$
1,204

 
$
5,047

 
$
719

 
$
1,483

 
$

 
$
13,569

Net premiums earned
4,896

 
1,124

 
4,896

 
649

 
1,441

 

 
13,006

Losses and loss expenses
3,330

 
913

 
2,304

 
191

 
442

 
2

 
7,182

Policy benefits

 

 

 

 
384

 

 
384

Policy acquisition costs
446

 
61

 
1,190

 
166

 
342

 

 
2,205

Administrative expenses
552

 
3

 
756

 
37

 
221

 
131

 
1,700

Underwriting income (loss)
568

 
147

 
646

 
255

 
52

 
(133
)
 
1,535

Net investment income
798

 
17

 
409

 
230

 
198

 
10

 
1,662

Net realized gains (losses) including OTTI
(39
)
 
(6
)
 
(10
)
 
(20
)
 
(282
)
 
(3
)
 
(360
)
Interest expense
7

 

 
3

 
3

 
4

 
190

 
207

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
32

 

 
32

Other
(32
)
 
1

 
(19
)
 
(10
)
 
(43
)
 
10

 
(93
)
Amortization of intangible assets
63

 
22

 
50

 

 
1

 

 
136

Chubb integration expenses

 

 

 

 

 
9

 
9

Income tax expense (benefit)
239

 
29

 
197

 
23

 
27

 
(120
)
 
395

Net income (loss)
$
1,050

 
$
106

 
$
814

 
$
449

 
$
(53
)
 
$
(215
)
 
$
2,151



For the Nine Months Ended September 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
4,594

 
$
1,346

 
$
5,250

 
$
794

 
$
1,489

 
$

 
$
13,473

Net premiums earned
4,547

 
1,199

 
5,047

 
800

 
1,463

 

 
13,056

Losses and loss expenses
3,009

 
1,099

 
2,354

 
327

 
442

 
2

 
7,233

Policy benefits

 

 

 

 
383

 

 
383

Policy acquisition costs
480

 
69

 
1,206

 
201

 
355

 

 
2,311

Administrative expenses
501

 
5

 
764

 
41

 
212

 
132

 
1,655

Underwriting income (loss)
557

 
26

 
723

 
231

 
71

 
(134
)
 
1,474

Net investment income
812

 
19

 
398

 
238

 
199

 
9

 
1,675

Net realized gains (losses) including OTTI
(25
)
 
51

 
(71
)
 
(17
)
 
(237
)
 
2

 
(297
)
Interest expense
7

 

 
4

 
4

 
10

 
188

 
213

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
(5
)
 

 
(5
)
Other
(75
)
 

 
(44
)
 
(39
)
 
6

 
18

 
(134
)
Amortization of intangible assets

 
24

 
52

 

 
2

 

 
78

Income tax expense (benefit)
247

 
21

 
189

 
31

 
34

 
(120
)
 
402

Net income (loss)
$
1,165

 
$
51

 
$
849

 
$
456

 
$
(14
)
 
$
(209
)
 
$
2,298



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

The following table presents net premiums earned for each segment by product:
(in millions of U.S. dollars)
Property &
All Other

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Three Months Ended September 30, 2015
 
 
 
Insurance – North American P&C
$
511

 
$
1,063

 
$
108

 
$
1,682

Insurance – North American Agriculture
739

 

 

 
739

Insurance – Overseas General
706

 
386

 
523

 
1,615

Global Reinsurance
104

 
99

 

 
203

Life

 

 
480

 
480

 
$
2,060

 
$
1,548

 
$
1,111

 
$
4,719

For the Three Months Ended September 30, 2014
 
 
 
 
 
 
 
Insurance – North American P&C
$
420

 
$
993

 
$
105

 
$
1,518

Insurance – North American Agriculture
766

 

 

 
766

Insurance – Overseas General
744

 
394

 
588

 
1,726

Global Reinsurance
149

 
106

 

 
255

Life

 

 
489

 
489

 
$
2,079

 
$
1,493

 
$
1,182

 
$
4,754

 
 
 
 
 
 
 
 
(in millions of U.S. dollars)
Property &
All Other

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Nine Months Ended September 30, 2015
 
 
 
Insurance – North American P&C
$
1,428

 
$
3,157

 
$
311

 
$
4,896

Insurance – North American Agriculture
1,124

 

 

 
1,124

Insurance – Overseas General
2,163

 
1,159

 
1,574

 
4,896

Global Reinsurance
323

 
326

 

 
649

Life

 

 
1,441

 
1,441

 
$
5,038

 
$
4,642

 
$
3,326

 
$
13,006

For the Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
Insurance – North American P&C
$
1,248

 
$
2,992

 
$
307

 
$
4,547

Insurance – North American Agriculture
1,199

 

 

 
1,199

Insurance – Overseas General
2,164

 
1,158

 
1,725

 
5,047

Global Reinsurance
435

 
365

 

 
800

Life

 

 
1,463

 
1,463

 
$
5,046

 
$
4,515

 
$
3,495

 
$
13,056

Earnings per share
Earnings per share
Earnings per share
 
Three Months Ended
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
(in millions of U.S. dollars, except share and per share data)
2015

 
2014

 
2015

 
2014

Numerator:
 
 
 
 
 
 
 
Net income
$
528

 
$
785

 
$
2,151

 
$
2,298

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share:
 
 
 
 
 
 
 
Weighted-average shares outstanding
324,210,936

 
334,472,324

 
325,904,502

 
337,083,498

Denominator for diluted earnings per share:
 
 
 
 

 

Share-based compensation plans
2,962,484

 
3,201,656

 
3,269,724

 
3,298,569

Weighted-average shares outstanding and assumed conversions
327,173,420

 
337,673,980

 
329,174,226

 
340,382,067

Basic earnings per share
$
1.63

 
$
2.35

 
$
6.60

 
$
6.82

Diluted earnings per share
$
1.62

 
$
2.32

 
$
6.53

 
$
6.75

Potential anti-dilutive share conversions
1,907,815

 
1,227,575

 
1,503,830

 
1,410,340



Excluded from weighted-average shares outstanding and assumed conversions is the impact of securities that would have been anti-dilutive during the respective periods.
Information provided in connection with outstanding debt of subsidiaries
Information provided in connection with outstanding debt of subsidiaries
Information provided in connection with outstanding debt of subsidiaries

The following tables present condensed consolidating financial information at September 30, 2015 and December 31, 2014, and for the three and nine months ended September 30, 2015 and 2014 for ACE Limited (Parent Guarantor) and ACE INA Holdings Inc. (Subsidiary Issuer). The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor. The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer. Condensed consolidating financial information of the Parent Guarantor and Subsidiary Issuer are presented on the equity method of accounting. The revenues and expenses and cash flows of the subsidiaries of the Subsidiary Issuer are presented in the Other ACE Limited Subsidiaries column on a combined basis.

Condensed Consolidating Balance Sheet at September 30, 2015
(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
29

 
$
35

 
$
62,320

 
$

 
$
62,384

Cash (1)
17

 
5

 
2,177

 
(1,161
)
 
1,038

Insurance and reinsurance balances receivable

 

 
6,284

 
(994
)
 
5,290

Reinsurance recoverable on losses and loss expenses

 

 
20,039

 
(8,808
)
 
11,231

Reinsurance recoverable on policy benefits

 

 
1,148

 
(954
)
 
194

Value of business acquired

 

 
410

 

 
410

Goodwill and other intangible assets

 

 
5,713

 

 
5,713

Investments in subsidiaries
29,441

 
19,184

 

 
(48,625
)
 

Due from subsidiaries and affiliates, net
866

 

 

 
(866
)
 

Other assets
9

 
272

 
14,880

 
(3,661
)
 
11,500

Total assets
$
30,362

 
$
19,496

 
$
112,971

 
$
(65,069
)
 
$
97,760

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$

 
$

 
$
45,810

 
$
(8,246
)
 
$
37,564

Unearned premiums

 

 
10,329

 
(1,819
)
 
8,510

Future policy benefits

 

 
5,730

 
(954
)
 
4,776

Due to subsidiaries and affiliates, net

 
698

 
168

 
(866
)
 

Affiliated notional cash pooling programs (1)
973

 
188

 

 
(1,161
)
 

Short-term debt

 
700

 
1,403

 

 
2,103

Long-term debt

 
4,145

 
12

 

 
4,157

Trust preferred securities

 
309

 

 

 
309

Other liabilities
262

 
1,458

 
12,892

 
(3,398
)
 
11,214

Total liabilities
1,235

 
7,498

 
76,344

 
(16,444
)
 
68,633

Total shareholders’ equity
29,127

 
11,998

 
36,627

 
(48,625
)
 
29,127

Total liabilities and shareholders’ equity
$
30,362

 
$
19,496

 
$
112,971

 
$
(65,069
)
 
$
97,760


(1) 
ACE maintains two notional multicurrency 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 September 30, 2015, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
 




Condensed Consolidating Balance Sheet at December 31, 2014

(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
30

 
$
225

 
$
62,649

 
$

 
$
62,904

Cash (1)

 
1

 
1,209

 
(555
)
 
655

Insurance and reinsurance balances receivable

 

 
6,178

 
(752
)
 
5,426

Reinsurance recoverable on losses and loss expenses

 

 
20,992

 
(9,000
)
 
11,992

Reinsurance recoverable on policy benefits

 

 
1,194

 
(977
)
 
217

Value of business acquired

 

 
466

 

 
466

Goodwill and other intangible assets

 

 
5,724

 

 
5,724

Investments in subsidiaries
29,497

 
18,762

 

 
(48,259
)
 

Due from subsidiaries and affiliates, net
583

 

 

 
(583
)
 

Other assets
4

 
295

 
14,196

 
(3,631
)
 
10,864

Total assets
$
30,114

 
$
19,283

 
$
112,608

 
$
(63,757
)
 
$
98,248

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$

 
$

 
$
46,770

 
$
(8,455
)
 
$
38,315

Unearned premiums

 

 
9,958

 
(1,736
)
 
8,222

Future policy benefits

 

 
5,731

 
(977
)
 
4,754

Due to subsidiaries and affiliates, net

 
422

 
161

 
(583
)
 

Affiliated notional cash pooling programs (1)
246

 
309

 

 
(555
)
 

Short-term debt

 
1,150

 
1,402

 

 
2,552

Long-term debt

 
3,345

 
12

 

 
3,357

Trust preferred securities

 
309

 

 

 
309

Other liabilities
281

 
1,404

 
12,659

 
(3,192
)
 
11,152

Total liabilities
527

 
6,939

 
76,693

 
(15,498
)
 
68,661

Total shareholders’ equity
29,587

 
12,344

 
35,915

 
(48,259
)
 
29,587

Total liabilities and shareholders’ equity
$
30,114

 
$
19,283

 
$
112,608

 
$
(63,757
)
 
$
98,248

(1) 
ACE maintains two notional multicurrency 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 December 31, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statements of Operations and Comprehensive Income
For the Three Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
4,709

 
$

 
$
4,709

Net premiums earned

 

 
4,719

 

 
4,719

Net investment income
1

 
1

 
547

 

 
549

Equity in earnings of subsidiaries
488

 
255

 

 
(743
)
 

Net realized gains (losses) including OTTI

 
(4
)
 
(393
)
 

 
(397
)
Losses and loss expenses

 

 
2,643

 

 
2,643

Policy benefits

 

 
89

 

 
89

Policy acquisition costs and administrative expenses
15

 
7

 
1,317

 

 
1,339

Interest (income) expense
(8
)
 
68

 
8

 

 
68

Other (income) expense
(51
)
 
(5
)
 
68

 

 
12

Amortization of intangible assets

 

 
51

 

 
51

Chubb integration expenses
1

 
8

 

 

 
9

Income tax expense (benefit)
4

 
(31
)
 
159

 

 
132

Net income
$
528

 
$
205

 
$
538

 
$
(743
)
 
$
528

Comprehensive income (loss)
$
(271
)
 
$
(265
)
 
$
(262
)
 
$
527

 
$
(271
)

Condensed Consolidating Statements of Operations and Comprehensive Income
For the Three Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
4,729

 
$

 
$
4,729

Net premiums earned

 

 
4,754

 

 
4,754

Net investment income
1

 

 
565

 

 
566

Equity in earnings of subsidiaries
745

 
258

 

 
(1,003
)
 

Net realized gains (losses) including OTTI

 
46

 
(166
)
 

 
(120
)
Losses and loss expenses

 

 
2,684

 

 
2,684

Policy benefits

 

 
125

 

 
125

Policy acquisition costs and administrative expenses
18

 
6

 
1,355

 

 
1,379

Interest (income) expense
(7
)
 
68

 
9

 

 
70

Other (income) expense
(54
)
 
2

 
6

 

 
(46
)
Amortization of intangible assets

 

 
27

 

 
27

Income tax expense (benefit)
4

 
(11
)
 
183

 

 
176

Net income
$
785

 
$
239

 
$
764

 
$
(1,003
)
 
$
785

Comprehensive income
$
298

 
$
33

 
$
276

 
$
(309
)
 
$
298





Condensed Consolidating Statements of Operations and Comprehensive Income
For the Nine Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
13,569

 
$

 
$
13,569

Net premiums earned

 

 
13,006

 

 
13,006

Net investment income
2

 
2

 
1,658

 

 
1,662

Equity in earnings of subsidiaries
2,037

 
755

 

 
(2,792
)
 

Net realized gains (losses) including OTTI

 
(6
)
 
(354
)
 

 
(360
)
Losses and loss expenses

 

 
7,182

 

 
7,182

Policy benefits

 

 
384

 

 
384

Policy acquisition costs and administrative expenses
47

 
20

 
3,838

 

 
3,905

Interest (income) expense
(23
)
 
206

 
24

 

 
207

Other (income) expense
(149
)
 
(12
)
 
100

 

 
(61
)
Amortization of intangible assets

 

 
136

 

 
136

Chubb integration expenses
1

 
8

 

 

 
9

Income tax expense (benefit)
12

 
(84
)
 
467

 

 
395

Net income
$
2,151

 
$
613

 
$
2,179

 
$
(2,792
)
 
$
2,151

Comprehensive income (loss)
$
768

 
$
(332
)
 
$
795

 
$
(463
)
 
$
768


Condensed Consolidating Statements of Operations and Comprehensive Income
For the Nine Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
13,473

 
$

 
$
13,473

Net premiums earned

 

 
13,056

 

 
13,056

Net investment income
2

 
1

 
1,672

 

 
1,675

Equity in earnings of subsidiaries
2,192

 
669

 

 
(2,861
)
 

Net realized gains (losses) including OTTI

 
53

 
(350
)
 

 
(297
)
Losses and loss expenses

 

 
7,233

 

 
7,233

Policy benefits

 

 
383

 

 
383

Policy acquisition costs and administrative expenses
57

 
20

 
3,889

 

 
3,966

Interest (income) expense
(26
)
 
209

 
30

 

 
213

Other (income) expense
(146
)
 
22

 
(15
)
 

 
(139
)
Amortization of intangible assets

 

 
78

 

 
78

Income tax expense (benefit)
11

 
(66
)
 
457

 

 
402

Net income
$
2,298

 
$
538

 
$
2,323

 
$
(2,861
)
 
$
2,298

Comprehensive income
$
2,754

 
$
810

 
$
2,778

 
$
(3,588
)
 
$
2,754





Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
350

 
$
(46
)
 
$
2,671

 
$
(276
)
 
$
2,699

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Purchases of fixed maturities available for sale

 

 
(13,052
)
 
(8
)
 
(13,060
)
Purchases of fixed maturities held to maturity

 

 
(39
)
 

 
(39
)
Purchases of equity securities

 

 
(122
)
 

 
(122
)
Sales of fixed maturities available for sale

 

 
5,233

 

 
5,233

Sales of equity securities

 

 
150

 

 
150

Maturities and redemptions of fixed maturities available for sale

 

 
5,257

 

 
5,257

Maturities and redemptions of fixed maturities held to maturity

 

 
552

 

 
552

Net change in short-term investments

 
215

 
206

 

 
421

Net derivative instruments settlements

 
(10
)
 
72

 

 
62

Acquisition of subsidiaries (net of cash acquired of $620)

 

 
259

 

 
259

Capital contribution

 
(625
)
 

 
625

 

Other

 
(25
)
 
(121
)
 
8

 
(138
)
Net cash flows used for investing activities

 
(445
)
 
(1,605
)
 
625

 
(1,425
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(644
)
 

 

 

 
(644
)
Common Shares repurchased

 

 
(758
)
 

 
(758
)
Proceeds from issuance of long-term debt

 
800

 

 

 
800

Proceeds from issuance of short-term debt

 

 
1,478

 

 
1,478

Repayment of long-term debt

 
(450
)
 
(1
)
 

 
(451
)
Repayment of short-term debt

 

 
(1,477
)
 

 
(1,477
)
Proceeds from share-based compensation plans, including windfall tax benefits

 

 
89

 

 
89

Dividend to parent company

 

 
(276
)
 
276

 

Advances (to) from affiliates
(416
)
 
272

 
144

 

 

Capital contribution

 

 
625

 
(625
)
 

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
727

 
(121
)
 

 
(606
)
 

Policyholder contract deposits

 

 
351

 

 
351

Policyholder contract withdrawals

 

 
(159
)
 

 
(159
)
Other

 
(6
)
 

 

 
(6
)
Net cash flows (used for) from financing activities
(333
)
 
495

 
16

 
(955
)
 
(777
)
Effect of foreign currency rate changes on cash and cash equivalents

 

 
(114
)
 

 
(114
)
Net increase in cash
17

 
4

 
968

 
(606
)
 
383

Cash – beginning of period(1)

 
1

 
1,209

 
(555
)
 
655

Cash – end of period(1)
$
17

 
$
5

 
$
2,177

 
$
(1,161
)
 
$
1,038

(1) 
ACE maintains two notional multicurrency 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 September 30, 2015 and December 31, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from operating activities
$
168

 
$
139

 
$
3,115

 
$
(200
)
 
$
3,222

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Purchases of fixed maturities available for sale

 

 
(11,870
)
 
3

 
(11,867
)
Purchases of fixed maturities held to maturity

 

 
(185
)
 

 
(185
)
Purchases of equity securities

 

 
(222
)
 

 
(222
)
Sales of fixed maturities available for sale

 

 
6,309

 
(3
)
 
6,306

Sales of equity securities

 

 
322

 

 
322

Maturities and redemptions of fixed maturities
   available for sale

 

 
4,814

 

 
4,814

Maturities and redemptions of fixed maturities held to maturity

 

 
617

 

 
617

Net change in short-term investments
1

 
(16
)
 
(969
)
 

 
(984
)
Net derivative instruments settlements

 
53

 
(223
)
 

 
(170
)
Acquisition of subsidiaries (net of cash acquired of $4)

 

 
(172
)
 

 
(172
)
Capital contribution

 
(230
)
 

 
230

 

Other

 
(9
)
 
(138
)
 

 
(147
)
Net cash flows from (used for) investing activities
1

 
(202
)
 
(1,717
)
 
230

 
(1,688
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(646
)
 

 

 

 
(646
)
Common Shares repurchased

 

 
(1,007
)
 

 
(1,007
)
Proceeds from issuance of long-term debt

 
699

 

 

 
699

Proceeds from issuance of short-term debt

 

 
1,827

 

 
1,827

Repayment of long-term debt

 
(500
)
 
(1
)
 

 
(501
)
Repayment of short-term debt

 

 
(1,827
)
 

 
(1,827
)
Proceeds from share-based compensation plans, including windfall tax benefits

 

 
94

 

 
94

Dividend to parent company

 

 
(200
)
 
200

 

Advances (to) from affiliates
97

 
(166
)
 
69

 

 

Capital contribution

 

 
230

 
(230
)
 

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
388

 
32

 

 
(420
)
 

Policyholder contract deposits

 

 
189

 

 
189

Policyholder contract withdrawals

 

 
(62
)
 

 
(62
)
Other

 
(6
)
 

 

 
(6
)
Net cash flows (used for) from financing activities
(161
)
 
59

 
(688
)
 
(450
)
 
(1,240
)
Effect of foreign currency rate changes on cash and cash equivalents

 

 
(67
)
 

 
(67
)
Net increase (decrease) in cash
8

 
(4
)
 
643

 
(420
)
 
227

Cash – beginning of period(1)

 
16

 
748

 
(185
)
 
579

Cash – end of period(1)
$
8

 
$
12

 
$
1,391

 
$
(605
)
 
$
806


(1) 
ACE maintains two notional multicurrency 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 September 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
General (Policies)
a) Basis of presentation
ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE Limited 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, including internal reinsurance 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 2014 Form 10-K.

Effective third quarter of 2015, amortization of intangible assets are excluded from Other (income) expense and disclosed separately in the consolidated statements of operations. Prior year amounts have been reclassified to conform to the current year presentation.
  
In addition, we added a new expense caption (Chubb integration expenses), which includes legal and professional fees and all other external costs directly related to the integration activities of the planned Chubb acquisition.
Business Combinations Simplifying the Accounting for Measurement-Period Adjustments
In September 2015, the Financial Accounting Standards Board (FASB) issued guidance to simplify the accounting for adjustments made to provisional valuation amounts recognized in a business combination. The guidance requires that the acquirer must recognize adjustments to provisional valuation amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined.  The guidance eliminates the requirement to retrospectively account for such adjustments. Previously, the accounting for measurement-period adjustments required the acquirer to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill.  We early adopted this guidance effective July 1, 2015.  The adoption of this guidance did not have an impact on our financial condition or results of operations.

Disclosures for investments in certain entities that calculate net asset value (NAV)
In May 2015, the FASB issued guidance that eliminated the requirement for investments measured at fair value using NAV as a practical expedient to be categorized within the fair value hierarchy. We early adopted this guidance effective July 1, 2015 and have retrospectively revised prior year fair value hierarchy disclosures contained in this report to conform to the current period presentation. Refer to Note 4 Fair Value Measurement for further information. This guidance requires a change in disclosure only and adoption of this guidance did not have an impact on our financial condition or results of operations.
Presentation of Debt Issuance Costs
In April 2015, the FASB issued new guidance related to the accounting for debt issuance costs.  The new guidance requires presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge.  The new guidance requires retrospective adoption and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance will not have any effect on our results of operations and financial condition.
Investments (Tables)
September 30, 2015
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
$
2,800

 
$
85

 
$

 
$
2,885

 
$

Foreign
13,976

 
523

 
(208
)
 
14,291

 
(6
)
Corporate securities
16,790

 
467

 
(365
)
 
16,892

 
(14
)
Mortgage-backed securities
10,858

 
286

 
(25
)
 
11,119

 
(1
)
States, municipalities, and political subdivisions
2,987

 
111

 
(7
)
 
3,091

 

 
$
47,411

 
$
1,472

 
$
(605
)
 
$
48,278

 
$
(21
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
756

 
$
19

 
$
(1
)
 
$
774

 
$

Foreign
784

 
38

 
(4
)
 
818

 

Corporate securities
3,093

 
74

 
(41
)
 
3,126

 

Mortgage-backed securities
1,758

 
60

 
(1
)
 
1,817

 

States, municipalities, and political subdivisions
2,173

 
44

 
(2
)
 
2,215

 

 
$
8,564

 
$
235

 
$
(49
)
 
$
8,750

 
$


December 31, 2014
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
$
2,741

 
$
87

 
$
(8
)
 
$
2,820

 
$

Foreign
14,703

 
629

 
(90
)
 
15,242

 

Corporate securities
16,897

 
704

 
(170
)
 
17,431

 
(7
)
Mortgage-backed securities
10,011

 
304

 
(29
)
 
10,286

 
(1
)
States, municipalities, and political subdivisions
3,474

 
147

 
(5
)
 
3,616

 

 
$
47,826

 
$
1,871

 
$
(302
)
 
$
49,395

 
$
(8
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
832

 
$
20

 
$
(2
)
 
$
850

 
$

Foreign
916

 
47

 

 
963

 

Corporate securities
2,323

 
102

 
(2
)
 
2,423

 

Mortgage-backed securities
1,983

 
57

 
(1
)
 
2,039

 

States, municipalities, and political subdivisions
1,277

 
40

 
(3
)
 
1,314

 

 
$
7,331

 
$
266

 
$
(8
)
 
$
7,589

 
$


 
 
 
September 30

 
 
 
December 31

 
 
 
2015

 
 
 
2014

(in millions of U.S. dollars)
Amortized Cost

 
Fair Value

 
Amortized Cost

 
Fair Value

Available for sale
 
 
 
 
 
 
 
Due in 1 year or less
$
1,979

 
$
1,995

 
$
2,187

 
$
2,206

Due after 1 year through 5 years
16,472

 
16,794

 
15,444

 
15,857

Due after 5 years through 10 years
13,695

 
13,708

 
15,663

 
16,089

Due after 10 years
4,407

 
4,662

 
4,521

 
4,957

 
36,553

 
37,159

 
37,815

 
39,109

Mortgage-backed securities
10,858

 
11,119

 
10,011

 
10,286

 
$
47,411

 
$
48,278

 
$
47,826

 
$
49,395

Held to maturity
 
 
 
 
 
 
 
Due in 1 year or less
$
411

 
$
413

 
$
353

 
$
355

Due after 1 year through 5 years
2,583

 
2,683

 
2,603

 
2,693

Due after 5 years through 10 years
2,278

 
2,300

 
1,439

 
1,489

Due after 10 years
1,534

 
1,537

 
953

 
1,013

 
6,806

 
6,933

 
5,348

 
5,550

Mortgage-backed securities
1,758

 
1,817

 
1,983

 
2,039

 
$
8,564

 
$
8,750

 
$
7,331

 
$
7,589

 
September 30


December 31

(in millions of U.S. dollars)
2015


2014

Cost
$
434

 
$
440

Gross unrealized appreciation
54

 
83

Gross unrealized depreciation
(24
)
 
(13
)
Fair value
$
464

 
$
510

 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Fixed maturities:
 
 
 
 
 
 
OTTI on fixed maturities, gross
$
(31
)
 
$
(5
)
$
(57
)
 
$
(20
)
OTTI on fixed maturities recognized in OCI (pre-tax)
5

 
1

11

 
3

OTTI on fixed maturities, net
(26
)
 
(4
)
(46
)

(17
)
Gross realized gains excluding OTTI
19

 
73

91

 
163

Gross realized losses excluding OTTI
(44
)
 
(51
)
(95
)
 
(97
)
Total fixed maturities
(51
)
 
18

(50
)

49

Equity securities:
 
 
 
 
 
 
OTTI on equity securities
(3
)
 

(4
)
 
(7
)
Gross realized gains excluding OTTI
10

 
4

43

 
8

Gross realized losses excluding OTTI
(5
)
 
(60
)
(7
)
 
(61
)
Total equity securities
2

 
(56
)
32


(60
)
OTTI on other investments
(1
)
 

(1
)
 
(3
)
Foreign exchange losses
(2
)
 
(19
)
(73
)
 
(42
)
Investment and embedded derivative instruments
(22
)
 
(13
)
6

 
(53
)
Fair value adjustments on insurance derivative
(396
)
 
(80
)
(337
)
 
(126
)
S&P put options and futures
83

 
(15
)
69

 
(106
)
Other derivative instruments
(9
)
 
45

(10
)
 
52

Other
(1
)
 

4

 
(8
)
Net realized gains (losses)
$
(397
)
 
$
(120
)
$
(360
)

$
(297
)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Balance of credit losses related to securities still held – beginning of period
$
23

 
$
24

$
28

 
$
37

Additions where no OTTI was previously recorded
8

 
2

15

 
9

Additions where an OTTI was previously recorded
6

 
2

8

 
5

Reductions for securities sold during the period
(5
)
 
(11
)
(19
)
 
(34
)
Balance of credit losses related to securities still held – end of period
$
32

 
$
17

$
32


$
17

 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
September 30, 2015
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
228

 
$
(1
)
 
$
59

 
$

 
$
287

 
$
(1
)
Foreign
3,627

 
(160
)
 
402

 
(52
)
 
4,029

 
(212
)
Corporate securities
6,641

 
(322
)
 
801

 
(84
)
 
7,442

 
(406
)
Mortgage-backed securities
2,145

 
(16
)
 
626

 
(10
)
 
2,771

 
(26
)
States, municipalities, and political subdivisions
766

 
(7
)
 
57

 
(2
)
 
823

 
(9
)
Total fixed maturities
13,407

 
(506
)
 
1,945

 
(148
)
 
15,352

 
(654
)
Equity securities
151

 
(24
)
 

 

 
151

 
(24
)
Other investments
83

 
(2
)
 

 

 
83

 
(2
)
Total
$
13,641

 
$
(532
)
 
$
1,945

 
$
(148
)
 
$
15,586

 
$
(680
)
 
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
December 31, 2014
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
350

 
$
(1
)
 
$
666

 
$
(9
)
 
$
1,016

 
$
(10
)
Foreign
2,262

 
(75
)
 
375

 
(15
)
 
2,637

 
(90
)
Corporate securities
4,684

 
(150
)
 
738

 
(22
)
 
5,422

 
(172
)
Mortgage-backed securities
704

 
(2
)
 
1,663

 
(28
)
 
2,367

 
(30
)
States, municipalities, and political subdivisions
458

 
(3
)
 
490

 
(5
)
 
948

 
(8
)
Total fixed maturities
8,458

 
(231
)
 
3,932

 
(79
)
 
12,390

 
(310
)
Equity securities
101

 
(13
)
 

 

 
101

 
(13
)
Total
$
8,559

 
$
(244
)
 
$
3,932

 
$
(79
)
 
$
12,491

 
$
(323
)
 
September 30

 
December 31

(in millions of U.S. dollars)
2015

 
2014

Trust funds
$
10,990

 
$
10,838

Deposits with non-U.S. regulatory authorities
2,105

 
2,305

Assets pledged under repurchase agreements
1,468

 
1,431

Deposits with U.S. regulatory authorities
1,322

 
1,345

Other pledged assets
388

 
457

 
$
16,273

 
$
16,376

Fair value measurements (Tables)
September 30, 2015
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,919

 
$
966

 
$

 
$
2,885

Foreign

 
14,238

 
53

 
14,291

Corporate securities

 
16,709

 
183

 
16,892

Mortgage-backed securities

 
11,065

 
54

 
11,119

States, municipalities, and political subdivisions

 
3,091

 

 
3,091

 
1,919

 
46,069

 
290

 
48,278

Equity securities
455

 
5

 
4

 
464

Short-term investments
703

 
1,105

 

 
1,808

Other investments (1)
314

 
218

 
209

 
741

Securities lending collateral

 
1,011

 

 
1,011

Investment derivative instruments
17

 

 

 
17

Other derivative instruments
26

 

 

 
26

Separate account assets
1,423

 
83

 

 
1,506

Total assets measured at fair value (1)
$
4,857

 
$
48,491

 
$
503

 
$
53,851

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
27

 
$

 
$

 
$
27

Other derivative instruments

 

 
7

 
7

GLB (2)

 

 
744

 
744

Total liabilities measured at fair value
$
27

 
$

 
$
751

 
$
778

(1) 
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $2,504 million and other investments of $25 million at September 30, 2015 measured using NAV. Based on new accounting guidance adopted this quarter, these investments are excluded from the hierarchy table.
(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
 
December 31, 2014
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,680

 
$
1,140

 
$

 
$
2,820

Foreign

 
15,220

 
22

 
15,242

Corporate securities

 
17,244

 
187

 
17,431

Mortgage-backed securities

 
10,271

 
15

 
10,286

States, municipalities, and political subdivisions

 
3,616

 

 
3,616

 
1,680

 
47,491

 
224

 
49,395

Equity securities
492

 
16

 
2

 
510

Short-term investments
1,183

 
1,139

 

 
2,322

Other investments (1)
370

 
211

 
204

 
785

Securities lending collateral

 
1,330

 

 
1,330

Investment derivative instruments
18

 

 

 
18

Other derivative instruments

 
2

 

 
2

Separate account assets
1,400

 
90

 

 
1,490

Total assets measured at fair value (1)
$
5,143

 
$
50,279

 
$
430

 
$
55,852

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
36

 
$

 
$

 
$
36

Other derivative instruments
21

 

 
4

 
25

GLB (2)

 

 
406

 
406

Total liabilities measured at fair value
$
57

 
$

 
$
410

 
$
467


(1) 
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $2,561 million at December 31, 2014 measured using NAV. Based on new accounting guidance adopted this quarter, these investments are excluded from the hierarchy table.
(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
 
 
 
 
 
September 30

 
 
 
December 31

 
Expected
Liquidation
Period of Underlying Assets
 
 
 
2015

 
 
 
2014

(in millions of U.S. dollars)
Fair
Value

 
Maximum
Future Funding
Commitments

 
Fair
Value

 
Maximum
Future Funding
Commitments

Financial
5 to 9 Years
 
$
309

 
$
107

 
$
282

 
$
145

Real Assets
3 to 7 Years
 
473

 
168

 
451

 
210

Distressed
5 to 9 Years
 
265

 
231

 
232

 
175

Private Credit
3 to 7 Years
 
272

 
226

 
299

 
190

Traditional
3 to 9 Years
 
885

 
184

 
908

 
289

Vintage
1 to 2 Years
 
14

 

 
11

 
1

Investment funds
Not Applicable
 
286

 

 
378

 

 
 
 
$
2,504

 
$
916

 
$
2,561

 
$
1,010

(in millions of U.S. dollars, except for percentages)
Fair Value
 
Valuation
Technique
 
Significant
Unobservable Inputs
 
Ranges
September 30, 2015

 
December 31, 2014

 
 
 
GLB(1)
$
744

 
$
406

 
Actuarial model
 
Lapse rate
 
1% – 30%
 
 
 
 
 
 
 
Annuitization rate
 
0% – 55%
(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.
 
Assets
 
 
 
Liabilities

Three Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

Other
investments

 
Other
derivative
instruments

GLB(1)

September 30, 2015
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
56

 
$
167

 
$
55

 
$
2

$
214

 
$
3

$
347

Transfers into Level 3
1

 
2

 

 


 


Change in Net Unrealized Gains (Losses) included in OCI
1

 
1

 

 
2

(7
)
 


Net Realized Gains/Losses
(1
)
 
(1
)
 

 
(1
)

 
4

397

Purchases

 
22

 

 
1

5

 


Sales

 
(5
)
 
(1
)
 


 


Settlements
(4
)
 
(3
)
 

 

(3
)
 


Balance–End of Period
$
53

 
$
183

 
$
54

 
$
4

$
209

 
$
7

$
744

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

 
$

 
$
(1
)
$

 
$
4

$
397

(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
  
Assets
 
 
Liabilities

Nine Months Ended
Available-for-Sale Debt Securities
 
 
 
 
Short-term investments

 
Other investments

 
GLB(1)

September 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
Equity
securities

 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
 
Balance–Beginning of Period
$
44

 
$
166

 
$
8

 
$
4

 
$
7

 
$
196

 
$
193

Transfers into Level 3
3

 
35

 

 

 

 

 

Transfers out of Level 3
(34
)
 
(22
)
 

 
(2
)
 
(7
)
 

 

Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
1

 

 
1

 

 
1

 

Net Realized Gains/Losses
1

 
2

 

 

 

 

 
124

Purchases
2

 
65

 
8

 
1

 

 
15

 

Sales
(3
)
 
(17
)
 

 
(2
)
 

 

 

Settlements

 
(22
)
 
(1
)
 

 

 
(7
)
 

Balance–End of Period
$
12

 
$
208

 
$
15

 
$
2

 
$

 
$
205

 
$
317

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

 
$

 
$

 
$

 
$

 
$

 
$
124

(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 liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $566 million at September 30, 2014 and $427 million at December 31, 2013, which includes a fair value derivative adjustment of $317 million and $193 million, respectively.
 
 
 
 
 
 
 
 
Assets

 
 
Liabilities

Nine Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

Other
investments

 
Other
derivative
instruments

GLB(1)

September 30, 2015
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
22

 
$
187

 
$
15

 
$
2

$
204

 
4

$
406

Transfers into Level 3
29

 
15

 

 


 


Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
1

 

 
2

(7
)
 


Net Realized Gains/Losses
(1
)
 
(4
)
 

 
(2
)

 
3

338

Purchases
9

 
38

 
41

 
2

21

 


Sales
(1
)
 
(10
)
 
(1
)
 


 


Settlements
(4
)
 
(44
)
 
(1
)
 

(9
)
 


Balance–End of Period
$
53

 
$
183

 
$
54

 
$
4

$
209

 
$
7

$
744

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
$
(1
)
 
$
(2
)
 
$

 
$
(2
)
$

 
$
3

$
338

(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 liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
  
Assets
 
 
Liabilities

Three Months Ended
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Other
investments

 
GLB(1)

September 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
203

 
$
241

Transfers into Level 3
1

 
5

 

 

 

 

Change in Net Unrealized Gains (Losses) included in OCI

 
(1
)
 

 

 
(1
)
 

Net Realized Gains/Losses

 
2

 

 

 

 
76

Purchases

 
20

 
8

 

 
6

 

Sales
(1
)
 
(9
)
 

 

 

 

Settlements

 
(13
)
 

 

 
(3
)
 

Balance–End of Period
$
12

 
$
208

 
$
15

 
$
2

 
$
205

 
$
317

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

 
$

 
$

 
$

 
$

 
$
76

(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 liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $566 million at September 30, 2014, and $486 million at June 30, 2014, which includes a fair value derivative adjustment of $317 million and $241 million, respectively.

September 30, 2015
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
599

 
$
175

 
$

 
$
774

 
$
756

Foreign

 
818

 

 
818

 
784

Corporate securities

 
3,112

 
14

 
3,126

 
3,093

Mortgage-backed securities

 
1,817

 

 
1,817

 
1,758

States, municipalities, and political subdivisions

 
2,215

 

 
2,215

 
2,173

Total assets
$
599

 
$
8,137

 
$
14

 
$
8,750

 
$
8,564

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$

 
$
2,105

 
$

 
$
2,105

 
$
2,103

Long-term debt

 
4,376

 

 
4,376

 
4,157

Trust preferred securities

 
457

 

 
457

 
309

Total liabilities
$

 
$
6,938

 
$

 
$
6,938

 
$
6,569


December 31, 2014
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
659

 
$
191

 
$

 
$
850

 
$
832

Foreign

 
963

 

 
963

 
916

Corporate securities

 
2,408

 
15

 
2,423

 
2,323

Mortgage-backed securities

 
2,039

 

 
2,039

 
1,983

States, municipalities, and political subdivisions

 
1,314

 

 
1,314

 
1,277

Total assets
$
659


$
6,915


$
15


$
7,589


$
7,331

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$

 
$
2,571

 
$

 
$
2,571

 
$
2,552

Long-term debt

 
3,690

 

 
3,690

 
3,357

Trust preferred securities

 
462

 

 
462

 
309

Total liabilities
$

 
$
6,723

 
$

 
$
6,723

 
$
6,218

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
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

 
2015

 
2014

GMDB
 
 
 
 
 
 
 
Net premiums earned
$
15

 
$
17

 
$
47

 
$
54

Policy benefits and other reserve adjustments
$
5

 
$
12

 
$
25

 
$
40

GLB
 
 
 
 
 
 
 
Net premiums earned
$
30

 
$
35

 
$
92

 
$
105

Policy benefits and other reserve adjustments
15

 
8

 
34

 
27

Net realized gains (losses)
(397
)
 
(76
)
 
(338
)
 
(124
)
Loss recognized in Net income
$
(382
)
 
$
(49
)
 
$
(280
)
 
$
(46
)
Less: Net cash received
20

 
31

 
74

 
93

Net increase in liability
$
(402
)
 
$
(80
)
 
$
(354
)
 
$
(139
)
Commitments, contingencies, and guarantees (Tables)
 
 
 
 
 
September 30, 2015
 
 
 
 
December 31, 2014
 
 
Consolidated
Balance Sheet
Location
 
Fair Value
 
 
Notional
Value/
Payment
Provision

 
Fair Value
 
 
Notional
Value/
Payment
Provision

(in millions of U.S. dollars)
 
Derivative Asset

 
Derivative (Liability)

 
 
Derivative Asset

 
Derivative (Liability)

 
Investment and embedded derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
OA / (AP)
 
$
10

 
$
(11
)
 
$
1,139

 
$
12

 
$
(7
)
 
$
1,329

Cross-currency swaps
OA / (AP)
 

 

 
95

 

 

 
95

Futures contracts on money market instruments
OA / (AP)
 
1

 
(5
)
 
3,799

 

 

 
2,467

Options/Futures contracts on notes and bonds
OA / (AP)
 
6

 
(11
)
 
1,238

 
6

 
(29
)
 
1,636

Convertible securities(1)
FM AFS / ES
 
222

 

 
222

 
291

 

 
267

 
 
 
$
239

 
$
(27
)
 
$
6,493

 
$
309

 
$
(36
)
 
$
5,794

Other derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Futures contracts on equities (2)
OA / (AP)
 
$
23

 
$

 
$
1,123

 
$

 
$
(21
)
 
$
1,384

Options on equity market indices (2)
OA / (AP)
 

 

 

 
2

 

 
250

Other
OA / (AP)
 
3

 
(7
)
 
66

 

 
(4
)
 
10

 
 
 
$
26

 
$
(7
)
 
$
1,189

 
$
2

 
$
(25
)
 
$
1,644

GLB(3)
(AP) / (FPB)
 


 
$
(1,017
)
 
$
1,224

 


 
$
(663
)
 
$
675


(1) 
Includes fair value of embedded derivatives.
(2) 
Related to GMDB and GLB blocks of business.
(3) 
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.
 
Remaining contractual maturity
 
September 30, 2015
 
Up to 30 Days

 
30 - 90 Days

 
Greater than 90 Days

 
Total

(in millions of U.S. dollars)
 
 
 
 
Collateral pledged under repurchase agreements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
$

 
$

 
$
8

 
$
8

U.S. Treasury and agency
 
172

 
61

 
7

 
240

Mortgage-backed securities
 
250

 
94

 
876

 
1,220

 
 
$
422

 
$
155

 
$
891

 
$
1,468

Gross amount of recognized liabilities for repurchase agreements
 
 
 
 
 
 
 
$
1,403

Difference(1)
 
 
 
 
 
 
 
$
65

(1) 
Per the repurchase agreements, the amount of collateral posted is required to exceed the amount of gross liability.
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
(in millions of U.S. dollars)
2015

 
2014

2015

 
2014

Investment and embedded derivative instruments
 
 
 
 
 
 
Foreign currency forward contracts
$
15

 
$
19

$
30

 
$
15

All other futures contracts and options
(23
)
 
(15
)
(10
)
 
(55
)
Convertible securities(1)
(14
)
 
(17
)
(14
)
 
(13
)
Total investment and embedded derivative instruments
$
(22
)
 
$
(13
)
$
6


$
(53
)
GLB and other derivative instruments
 
 
 
 
 
 
GLB(2)
$
(396
)
 
$
(80
)
$
(337
)
 
$
(126
)
Futures contracts on equities(3)
84

 
(15
)
71

 
(103
)
Options on equity market indices(3)
(1
)
 

(2
)
 
(3
)
Other
(9
)
 
45

(10
)
 
52

Total GLB and other derivative instruments
$
(322
)
 
$
(50
)
$
(278
)

$
(180
)
 
$
(344
)
 
$
(63
)
$
(272
)

$
(233
)
(1) 
Includes embedded derivatives.
(2) 
Excludes foreign exchange gains (losses) related to GLB.
(3) 
Related to GMDB and GLB blocks of business.

Shareholders' equity Shareholders' Equity (Tables)
The following table presents dividend distributions per Common Share in Swiss francs (CHF) and U.S. dollars (USD):
 
Three Months Ended
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
 
2015
 
 
2014
 
 
2015
 
 
2014
 
CHF

 
USD

 
CHF

 
USD

 
CHF

 
USD

 
CHF

 
USD

Dividends – par value reduction

 
$


 
0.61

 
$
0.65

 
0.62

 
$
0.65

 
1.64

 
$
1.81

Dividends  distributed from capital contribution reserves
0.65

 
0.67

 

 

 
1.27

 
1.34

 
0.20

 
0.24

Total dividend distributions per common share
0.65

 
$
0.67

 
0.61

 
$
0.65

 
1.89

 
$
1.99

 
1.84

 
$
2.05

The following table presents repurchases of ACE's Common Shares conducted in a series of open market transactions under the Board authorizations:
(in millions of U.S. dollars, except share data)
Three Months Ended
September 30
 
 
Nine Months Ended
September 30
 
2015

 
2014

 
2015

 
2014

Number of shares repurchased

 
4,349,302

 
6,677,663

 
10,143,184

Cost of shares repurchased
$

 
$
450

 
$
734

 
$
1,019

Repurchase authorization remaining at end of period
$
766

 
$
924

 
$
766

 
$
924

Segment information (Tables)
For the Three Months Ended September 30, 2015
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,711

 
$
737

 
$
1,584

 
$
185

 
$
492

 
$

 
$
4,709

Net premiums earned
1,682

 
739

 
1,615

 
203

 
480

 

 
4,719

Losses and loss expenses
1,175

 
620

 
674

 
20

 
153

 
1

 
2,643

Policy benefits

 

 

 

 
89

 

 
89

Policy acquisition costs
155

 
42

 
405

 
52

 
117

 

 
771

Administrative expenses
192

 

 
246

 
12

 
74

 
44

 
568

Underwriting income (loss)
160

 
77

 
290

 
119

 
47

 
(45
)
 
648

Net investment income
266

 
5

 
132

 
76

 
66

 
4

 
549

Net realized gains (losses) including OTTI
(33
)
 
(4
)
 
(13
)
 
(14
)
 
(326
)
 
(7
)
 
(397
)
Interest expense
3

 

 
1

 
1

 
1

 
62

 
68

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
49

 

 
49

Other
(16
)
 
(1
)
 
(6
)
 
(2
)
 
(13
)
 
1

 
(37
)
Amortization of intangible assets
31

 
8

 
12

 

 

 

 
51

Chubb integration expenses

 

 

 

 

 
9

 
9

Income tax expense (benefit)
70

 
15

 
76

 
8

 
8

 
(45
)
 
132

Net income (loss)
$
305

 
$
56

 
$
326

 
$
174

 
$
(258
)
 
$
(75
)
 
$
528


For the Three Months Ended September 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,541

 
$
764

 
$
1,719

 
$
208

 
$
497

 
$

 
$
4,729

Net premiums earned
1,518

 
766

 
1,726

 
255

 
489

 

 
4,754

Losses and loss expenses
1,053

 
686

 
707

 
92

 
145

 
1

 
2,684

Policy benefits

 

 

 

 
125

 

 
125

Policy acquisition costs
169

 
41

 
418

 
74

 
123

 

 
825

Administrative expenses
165

 
3

 
258

 
13

 
71

 
44

 
554

Underwriting income (loss)
131

 
36

 
343

 
76

 
25

 
(45
)
 
566

Net investment income
277

 
6

 
130

 
81

 
69

 
3

 
566

Net realized gains (losses) including OTTI
(5
)
 
45

 
(75
)
 
6

 
(89
)
 
(2
)
 
(120
)
Interest expense
2

 

 
2

 
1

 
4

 
61

 
70

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
6

 

 
6

Other
(31
)
 
(1
)
 
(13
)
 
(10
)
 
(3
)
 
6

 
(52
)
Amortization of intangible assets

 
8

 
19

 

 

 

 
27

Income tax expense (benefit)
73

 
23

 
97

 
11

 
12

 
(40
)
 
176

Net income (loss)
$
359

 
$
57

 
$
293

 
$
161

 
$
(14
)
 
$
(71
)
 
$
785


For the Nine Months Ended September 30, 2015
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
5,116

 
$
1,204

 
$
5,047

 
$
719

 
$
1,483

 
$

 
$
13,569

Net premiums earned
4,896

 
1,124

 
4,896

 
649

 
1,441

 

 
13,006

Losses and loss expenses
3,330

 
913

 
2,304

 
191

 
442

 
2

 
7,182

Policy benefits

 

 

 

 
384

 

 
384

Policy acquisition costs
446

 
61

 
1,190

 
166

 
342

 

 
2,205

Administrative expenses
552

 
3

 
756

 
37

 
221

 
131

 
1,700

Underwriting income (loss)
568

 
147

 
646

 
255

 
52

 
(133
)
 
1,535

Net investment income
798

 
17

 
409

 
230

 
198

 
10

 
1,662

Net realized gains (losses) including OTTI
(39
)
 
(6
)
 
(10
)
 
(20
)
 
(282
)
 
(3
)
 
(360
)
Interest expense
7

 

 
3

 
3

 
4

 
190

 
207

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
32

 

 
32

Other
(32
)
 
1

 
(19
)
 
(10
)
 
(43
)
 
10

 
(93
)
Amortization of intangible assets
63

 
22

 
50

 

 
1

 

 
136

Chubb integration expenses

 

 

 

 

 
9

 
9

Income tax expense (benefit)
239

 
29

 
197

 
23

 
27

 
(120
)
 
395

Net income (loss)
$
1,050

 
$
106

 
$
814

 
$
449

 
$
(53
)
 
$
(215
)
 
$
2,151



For the Nine Months Ended September 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
4,594

 
$
1,346

 
$
5,250

 
$
794

 
$
1,489

 
$

 
$
13,473

Net premiums earned
4,547

 
1,199

 
5,047

 
800

 
1,463

 

 
13,056

Losses and loss expenses
3,009

 
1,099

 
2,354

 
327

 
442

 
2

 
7,233

Policy benefits

 

 

 

 
383

 

 
383

Policy acquisition costs
480

 
69

 
1,206

 
201

 
355

 

 
2,311

Administrative expenses
501

 
5

 
764

 
41

 
212

 
132

 
1,655

Underwriting income (loss)
557

 
26

 
723

 
231

 
71

 
(134
)
 
1,474

Net investment income
812

 
19

 
398

 
238

 
199

 
9

 
1,675

Net realized gains (losses) including OTTI
(25
)
 
51

 
(71
)
 
(17
)
 
(237
)
 
2

 
(297
)
Interest expense
7

 

 
4

 
4

 
10

 
188

 
213

Other (income) expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses from fair value changes in separate account assets

 

 

 

 
(5
)
 

 
(5
)
Other
(75
)
 

 
(44
)
 
(39
)
 
6

 
18

 
(134
)
Amortization of intangible assets

 
24

 
52

 

 
2

 

 
78

Income tax expense (benefit)
247

 
21

 
189

 
31

 
34

 
(120
)
 
402

Net income (loss)
$
1,165

 
$
51

 
$
849

 
$
456

 
$
(14
)
 
$
(209
)
 
$
2,298

(in millions of U.S. dollars)
Property &
All Other

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Three Months Ended September 30, 2015
 
 
 
Insurance – North American P&C
$
511

 
$
1,063

 
$
108

 
$
1,682

Insurance – North American Agriculture
739

 

 

 
739

Insurance – Overseas General
706

 
386

 
523

 
1,615

Global Reinsurance
104

 
99

 

 
203

Life

 

 
480

 
480

 
$
2,060

 
$
1,548

 
$
1,111

 
$
4,719

For the Three Months Ended September 30, 2014
 
 
 
 
 
 
 
Insurance – North American P&C
$
420

 
$
993

 
$
105

 
$
1,518

Insurance – North American Agriculture
766

 

 

 
766

Insurance – Overseas General
744

 
394

 
588

 
1,726

Global Reinsurance
149

 
106

 

 
255

Life

 

 
489

 
489

 
$
2,079

 
$
1,493

 
$
1,182

 
$
4,754

 
 
 
 
 
 
 
 
(in millions of U.S. dollars)
Property &
All Other

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Nine Months Ended September 30, 2015
 
 
 
Insurance – North American P&C
$
1,428

 
$
3,157

 
$
311

 
$
4,896

Insurance – North American Agriculture
1,124

 

 

 
1,124

Insurance – Overseas General
2,163

 
1,159

 
1,574

 
4,896

Global Reinsurance
323

 
326

 

 
649

Life

 

 
1,441

 
1,441

 
$
5,038

 
$
4,642

 
$
3,326

 
$
13,006

For the Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
Insurance – North American P&C
$
1,248

 
$
2,992

 
$
307

 
$
4,547

Insurance – North American Agriculture
1,199

 

 

 
1,199

Insurance – Overseas General
2,164

 
1,158

 
1,725

 
5,047

Global Reinsurance
435

 
365

 

 
800

Life

 

 
1,463

 
1,463

 
$
5,046

 
$
4,515

 
$
3,495

 
$
13,056

Earnings per share (Tables)
Schedule Of Earnings Per Share, Basic And Diluted
 
Three Months Ended
 
 
Nine Months Ended
 
 
September 30
 
 
September 30
 
(in millions of U.S. dollars, except share and per share data)
2015

 
2014

 
2015

 
2014

Numerator:
 
 
 
 
 
 
 
Net income
$
528

 
$
785

 
$
2,151

 
$
2,298

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share:
 
 
 
 
 
 
 
Weighted-average shares outstanding
324,210,936

 
334,472,324

 
325,904,502

 
337,083,498

Denominator for diluted earnings per share:
 
 
 
 

 

Share-based compensation plans
2,962,484

 
3,201,656

 
3,269,724

 
3,298,569

Weighted-average shares outstanding and assumed conversions
327,173,420

 
337,673,980

 
329,174,226

 
340,382,067

Basic earnings per share
$
1.63

 
$
2.35

 
$
6.60

 
$
6.82

Diluted earnings per share
$
1.62

 
$
2.32

 
$
6.53

 
$
6.75

Potential anti-dilutive share conversions
1,907,815

 
1,227,575

 
1,503,830

 
1,410,340

Information provided in connection with outstanding debt of subsidiaries (Tables)
Condensed Consolidating Balance Sheet at September 30, 2015
(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
29

 
$
35

 
$
62,320

 
$

 
$
62,384

Cash (1)
17

 
5

 
2,177

 
(1,161
)
 
1,038

Insurance and reinsurance balances receivable

 

 
6,284

 
(994
)
 
5,290

Reinsurance recoverable on losses and loss expenses

 

 
20,039

 
(8,808
)
 
11,231

Reinsurance recoverable on policy benefits

 

 
1,148

 
(954
)
 
194

Value of business acquired

 

 
410

 

 
410

Goodwill and other intangible assets

 

 
5,713

 

 
5,713

Investments in subsidiaries
29,441

 
19,184

 

 
(48,625
)
 

Due from subsidiaries and affiliates, net
866

 

 

 
(866
)
 

Other assets
9

 
272

 
14,880

 
(3,661
)
 
11,500

Total assets
$
30,362

 
$
19,496

 
$
112,971

 
$
(65,069
)
 
$
97,760

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$

 
$

 
$
45,810

 
$
(8,246
)
 
$
37,564

Unearned premiums

 

 
10,329

 
(1,819
)
 
8,510

Future policy benefits

 

 
5,730

 
(954
)
 
4,776

Due to subsidiaries and affiliates, net

 
698

 
168

 
(866
)
 

Affiliated notional cash pooling programs (1)
973

 
188

 

 
(1,161
)
 

Short-term debt

 
700

 
1,403

 

 
2,103

Long-term debt

 
4,145

 
12

 

 
4,157

Trust preferred securities

 
309

 

 

 
309

Other liabilities
262

 
1,458

 
12,892

 
(3,398
)
 
11,214

Total liabilities
1,235

 
7,498

 
76,344

 
(16,444
)
 
68,633

Total shareholders’ equity
29,127

 
11,998

 
36,627

 
(48,625
)
 
29,127

Total liabilities and shareholders’ equity
$
30,362

 
$
19,496

 
$
112,971

 
$
(65,069
)
 
$
97,760


(1) 
ACE maintains two notional multicurrency 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 September 30, 2015, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
 




Condensed Consolidating Balance Sheet at December 31, 2014

(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
30

 
$
225

 
$
62,649

 
$

 
$
62,904

Cash (1)

 
1

 
1,209

 
(555
)
 
655

Insurance and reinsurance balances receivable

 

 
6,178

 
(752
)
 
5,426

Reinsurance recoverable on losses and loss expenses

 

 
20,992

 
(9,000
)
 
11,992

Reinsurance recoverable on policy benefits

 

 
1,194

 
(977
)
 
217

Value of business acquired

 

 
466

 

 
466

Goodwill and other intangible assets

 

 
5,724

 

 
5,724

Investments in subsidiaries
29,497

 
18,762

 

 
(48,259
)
 

Due from subsidiaries and affiliates, net
583

 

 

 
(583
)
 

Other assets
4

 
295

 
14,196

 
(3,631
)
 
10,864

Total assets
$
30,114

 
$
19,283

 
$
112,608

 
$
(63,757
)
 
$
98,248

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$

 
$

 
$
46,770

 
$
(8,455
)
 
$
38,315

Unearned premiums

 

 
9,958

 
(1,736
)
 
8,222

Future policy benefits

 

 
5,731

 
(977
)
 
4,754

Due to subsidiaries and affiliates, net

 
422

 
161

 
(583
)
 

Affiliated notional cash pooling programs (1)
246

 
309

 

 
(555
)
 

Short-term debt

 
1,150

 
1,402

 

 
2,552

Long-term debt

 
3,345

 
12

 

 
3,357

Trust preferred securities

 
309

 

 

 
309

Other liabilities
281

 
1,404

 
12,659

 
(3,192
)
 
11,152

Total liabilities
527

 
6,939

 
76,693

 
(15,498
)
 
68,661

Total shareholders’ equity
29,587

 
12,344

 
35,915

 
(48,259
)
 
29,587

Total liabilities and shareholders’ equity
$
30,114

 
$
19,283

 
$
112,608

 
$
(63,757
)
 
$
98,248

(1) 
ACE maintains two notional multicurrency 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 December 31, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Condensed Consolidating Statements of Operations and Comprehensive Income
For the Three Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
4,709

 
$

 
$
4,709

Net premiums earned

 

 
4,719

 

 
4,719

Net investment income
1

 
1

 
547

 

 
549

Equity in earnings of subsidiaries
488

 
255

 

 
(743
)
 

Net realized gains (losses) including OTTI

 
(4
)
 
(393
)
 

 
(397
)
Losses and loss expenses

 

 
2,643

 

 
2,643

Policy benefits

 

 
89

 

 
89

Policy acquisition costs and administrative expenses
15

 
7

 
1,317

 

 
1,339

Interest (income) expense
(8
)
 
68

 
8

 

 
68

Other (income) expense
(51
)
 
(5
)
 
68

 

 
12

Amortization of intangible assets

 

 
51

 

 
51

Chubb integration expenses
1

 
8

 

 

 
9

Income tax expense (benefit)
4

 
(31
)
 
159

 

 
132

Net income
$
528

 
$
205

 
$
538

 
$
(743
)
 
$
528

Comprehensive income (loss)
$
(271
)
 
$
(265
)
 
$
(262
)
 
$
527

 
$
(271
)

Condensed Consolidating Statements of Operations and Comprehensive Income
For the Three Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
4,729

 
$

 
$
4,729

Net premiums earned

 

 
4,754

 

 
4,754

Net investment income
1

 

 
565

 

 
566

Equity in earnings of subsidiaries
745

 
258

 

 
(1,003
)
 

Net realized gains (losses) including OTTI

 
46

 
(166
)
 

 
(120
)
Losses and loss expenses

 

 
2,684

 

 
2,684

Policy benefits

 

 
125

 

 
125

Policy acquisition costs and administrative expenses
18

 
6

 
1,355

 

 
1,379

Interest (income) expense
(7
)
 
68

 
9

 

 
70

Other (income) expense
(54
)
 
2

 
6

 

 
(46
)
Amortization of intangible assets

 

 
27

 

 
27

Income tax expense (benefit)
4

 
(11
)
 
183

 

 
176

Net income
$
785

 
$
239

 
$
764

 
$
(1,003
)
 
$
785

Comprehensive income
$
298

 
$
33

 
$
276

 
$
(309
)
 
$
298





Condensed Consolidating Statements of Operations and Comprehensive Income
For the Nine Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
13,569

 
$

 
$
13,569

Net premiums earned

 

 
13,006

 

 
13,006

Net investment income
2

 
2

 
1,658

 

 
1,662

Equity in earnings of subsidiaries
2,037

 
755

 

 
(2,792
)
 

Net realized gains (losses) including OTTI

 
(6
)
 
(354
)
 

 
(360
)
Losses and loss expenses

 

 
7,182

 

 
7,182

Policy benefits

 

 
384

 

 
384

Policy acquisition costs and administrative expenses
47

 
20

 
3,838

 

 
3,905

Interest (income) expense
(23
)
 
206

 
24

 

 
207

Other (income) expense
(149
)
 
(12
)
 
100

 

 
(61
)
Amortization of intangible assets

 

 
136

 

 
136

Chubb integration expenses
1

 
8

 

 

 
9

Income tax expense (benefit)
12

 
(84
)
 
467

 

 
395

Net income
$
2,151

 
$
613

 
$
2,179

 
$
(2,792
)
 
$
2,151

Comprehensive income (loss)
$
768

 
$
(332
)
 
$
795

 
$
(463
)
 
$
768


Condensed Consolidating Statements of Operations and Comprehensive Income
For the Nine Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net premiums written
$

 
$

 
$
13,473

 
$

 
$
13,473

Net premiums earned

 

 
13,056

 

 
13,056

Net investment income
2

 
1

 
1,672

 

 
1,675

Equity in earnings of subsidiaries
2,192

 
669

 

 
(2,861
)
 

Net realized gains (losses) including OTTI

 
53

 
(350
)
 

 
(297
)
Losses and loss expenses

 

 
7,233

 

 
7,233

Policy benefits

 

 
383

 

 
383

Policy acquisition costs and administrative expenses
57

 
20

 
3,889

 

 
3,966

Interest (income) expense
(26
)
 
209

 
30

 

 
213

Other (income) expense
(146
)
 
22

 
(15
)
 

 
(139
)
Amortization of intangible assets

 

 
78

 

 
78

Income tax expense (benefit)
11

 
(66
)
 
457

 

 
402

Net income
$
2,298

 
$
538

 
$
2,323

 
$
(2,861
)
 
$
2,298

Comprehensive income
$
2,754

 
$
810

 
$
2,778

 
$
(3,588
)
 
$
2,754





Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2015
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
350

 
$
(46
)
 
$
2,671

 
$
(276
)
 
$
2,699

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Purchases of fixed maturities available for sale

 

 
(13,052
)
 
(8
)
 
(13,060
)
Purchases of fixed maturities held to maturity

 

 
(39
)
 

 
(39
)
Purchases of equity securities

 

 
(122
)
 

 
(122
)
Sales of fixed maturities available for sale

 

 
5,233

 

 
5,233

Sales of equity securities

 

 
150

 

 
150

Maturities and redemptions of fixed maturities available for sale

 

 
5,257

 

 
5,257

Maturities and redemptions of fixed maturities held to maturity

 

 
552

 

 
552

Net change in short-term investments

 
215

 
206

 

 
421

Net derivative instruments settlements

 
(10
)
 
72

 

 
62

Acquisition of subsidiaries (net of cash acquired of $620)

 

 
259

 

 
259

Capital contribution

 
(625
)
 

 
625

 

Other

 
(25
)
 
(121
)
 
8

 
(138
)
Net cash flows used for investing activities

 
(445
)
 
(1,605
)
 
625

 
(1,425
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(644
)
 

 

 

 
(644
)
Common Shares repurchased

 

 
(758
)
 

 
(758
)
Proceeds from issuance of long-term debt

 
800

 

 

 
800

Proceeds from issuance of short-term debt

 

 
1,478

 

 
1,478

Repayment of long-term debt

 
(450
)
 
(1
)
 

 
(451
)
Repayment of short-term debt

 

 
(1,477
)
 

 
(1,477
)
Proceeds from share-based compensation plans, including windfall tax benefits

 

 
89

 

 
89

Dividend to parent company

 

 
(276
)
 
276

 

Advances (to) from affiliates
(416
)
 
272

 
144

 

 

Capital contribution

 

 
625

 
(625
)
 

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
727

 
(121
)
 

 
(606
)
 

Policyholder contract deposits

 

 
351

 

 
351

Policyholder contract withdrawals

 

 
(159
)
 

 
(159
)
Other

 
(6
)
 

 

 
(6
)
Net cash flows (used for) from financing activities
(333
)
 
495

 
16

 
(955
)
 
(777
)
Effect of foreign currency rate changes on cash and cash equivalents

 

 
(114
)
 

 
(114
)
Net increase in cash
17

 
4

 
968

 
(606
)
 
383

Cash – beginning of period(1)

 
1

 
1,209

 
(555
)
 
655

Cash – end of period(1)
$
17

 
$
5

 
$
2,177

 
$
(1,161
)
 
$
1,038

(1) 
ACE maintains two notional multicurrency 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 September 30, 2015 and December 31, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from operating activities
$
168

 
$
139

 
$
3,115

 
$
(200
)
 
$
3,222

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Purchases of fixed maturities available for sale

 

 
(11,870
)
 
3

 
(11,867
)
Purchases of fixed maturities held to maturity

 

 
(185
)
 

 
(185
)
Purchases of equity securities

 

 
(222
)
 

 
(222
)
Sales of fixed maturities available for sale

 

 
6,309

 
(3
)
 
6,306

Sales of equity securities

 

 
322

 

 
322

Maturities and redemptions of fixed maturities
   available for sale

 

 
4,814

 

 
4,814

Maturities and redemptions of fixed maturities held to maturity

 

 
617

 

 
617

Net change in short-term investments
1

 
(16
)
 
(969
)
 

 
(984
)
Net derivative instruments settlements

 
53

 
(223
)
 

 
(170
)
Acquisition of subsidiaries (net of cash acquired of $4)

 

 
(172
)
 

 
(172
)
Capital contribution

 
(230
)
 

 
230

 

Other

 
(9
)
 
(138
)
 

 
(147
)
Net cash flows from (used for) investing activities
1

 
(202
)
 
(1,717
)
 
230

 
(1,688
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(646
)
 

 

 

 
(646
)
Common Shares repurchased

 

 
(1,007
)
 

 
(1,007
)
Proceeds from issuance of long-term debt

 
699

 

 

 
699

Proceeds from issuance of short-term debt

 

 
1,827

 

 
1,827

Repayment of long-term debt

 
(500
)
 
(1
)
 

 
(501
)
Repayment of short-term debt

 

 
(1,827
)
 

 
(1,827
)
Proceeds from share-based compensation plans, including windfall tax benefits

 

 
94

 

 
94

Dividend to parent company

 

 
(200
)
 
200

 

Advances (to) from affiliates
97

 
(166
)
 
69

 

 

Capital contribution

 

 
230

 
(230
)
 

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
388

 
32

 

 
(420
)
 

Policyholder contract deposits

 

 
189

 

 
189

Policyholder contract withdrawals

 

 
(62
)
 

 
(62
)
Other

 
(6
)
 

 

 
(6
)
Net cash flows (used for) from financing activities
(161
)
 
59

 
(688
)
 
(450
)
 
(1,240
)
Effect of foreign currency rate changes on cash and cash equivalents

 

 
(67
)
 

 
(67
)
Net increase (decrease) in cash
8

 
(4
)
 
643

 
(420
)
 
227

Cash – beginning of period(1)

 
16

 
748

 
(185
)
 
579

Cash – end of period(1)
$
8

 
$
12

 
$
1,391

 
$
(605
)
 
$
806


(1) 
ACE maintains two notional multicurrency 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 September 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Acquisitions (Detail) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
0 Months Ended
Sep. 30, 2015
Jun. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Dec. 31, 2013
Apr. 1, 2015
Fireman's Fund high net worth personal lines [Member]
Oct. 31, 2014
Large Corporate Property And Casualty Business Of Itau Seguros [Member]
Jun. 17, 2014
The Siam Commercial Samaggi Insurance PCL [Member]
Jun. 17, 2014
The Siam Commercial Samaggi Insurance PCL [Member]
Apr. 28, 2014
The Siam Commercial Samaggi Insurance PCL [Member]
Sep. 30, 2015
The Chubb Corporation [Member]
Jun. 30, 2015
The Chubb Corporation [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Percentage ownership acquired
 
 
 
 
 
 
 
 
32.17% 
60.86% 
 
 
Goodwill
 
 
 
 
 
$ 196,000,000 
$ 445,000,000 
 
 
$ 46,000,000 
 
 
Other intangible assets
 
 
 
 
 
278,000,000 
60,000,000 
 
 
80,000,000 
 
 
Purchase price
 
 
 
 
 
365,000,000 
606,000,000 
 
 
 
 
 
Total Ownership Percentage
 
 
 
 
 
 
 
 
93.03% 
 
 
 
Purchase price for total ownership percentage
 
 
 
 
 
 
 
176,000,000 
 
 
 
 
Assumed liabilities fair value
 
 
 
 
 
858,000,000 
 
 
 
 
 
 
Unpaid losses and loss expenses
37,564,000,000 
 
38,315,000,000 
 
 
402,000,000 
 
 
 
 
 
 
Unearned premiums
8,510,000,000 
 
8,222,000,000 
 
 
428,000,000 
 
 
 
 
 
 
Insurance and reinsurance balances receivable
5,290,000,000 
 
5,426,000,000 
 
 
128,000,000 
 
 
 
 
 
 
Cash
1,038,000,000 1 2
 
655,000,000 1 3
806,000,000 4
579,000,000 4
620,000,000 
 
 
 
 
 
 
Acquired assets fair value
 
 
 
 
 
749,000,000 
 
 
 
 
 
 
Cash purchase price per share
 
 
 
 
 
 
 
 
 
 
$ 62.93 
 
Number of ACE shares to be issued per share
 
 
 
 
 
 
 
 
 
 
$ 0.6019 
 
Expected purchase price
 
 
 
 
 
 
 
 
 
 
28,800,000,000 
28,300,000,000 
ACE share price
$ 103.40 
$ 101.68 
 
 
 
 
 
 
 
 
 
 
Approximate number of shares to be issued
 
 
 
 
 
 
 
 
 
 
137 
 
Approximate ownership percentage of new company
 
 
 
 
 
 
 
 
 
 
30.00% 
 
Expected cash to be used to finance acquisition
 
 
 
 
 
 
 
 
 
 
9,000,000,000 
 
Senior notes issued to finance acquisition
 
 
 
 
 
 
 
 
 
 
$ 5,300,000,000 
 
Investments (Narrative) (Detail) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
Security
Sep. 30, 2014
Sep. 30, 2015
Security
Sep. 30, 2014
Apr. 30, 2015
Dec. 31, 2014
Sep. 30, 2015
ABR Reinsurance Capital Holdings Ltd. [Member]
Sep. 30, 2015
ABR Reinsurance Capital Holdings Ltd. [Member]
Apr. 14, 2015
ABR Reinsurance Capital Holdings Ltd. [Member]
Mar. 27, 2015
ABR Reinsurance Capital Holdings Ltd. [Member]
Investment [Line Items]
 
 
 
 
 
 
 
 
 
 
Document Period End Date
 
 
Sep. 30, 2015 
 
 
 
 
 
 
 
Total number of fixed maturities
26,875 
 
26,875 
 
 
 
 
 
 
 
Number of equity securities in an unrealized loss position
111 
 
111 
 
 
 
 
 
 
 
Total number of equity securities
257 
 
257 
 
 
 
 
 
 
 
Largest single unrealized loss in the equity securities
$ 2,000,000 
 
$ 2,000,000 
 
 
 
 
 
 
 
Restricted assets in fixed maturities and short-term investments
16,200,000,000 
 
16,200,000,000 
 
 
16,300,000,000 
 
 
 
 
Restricted assets in cash
79,000,000 
 
79,000,000 
 
 
117,000,000 
 
 
 
 
Moodys Historical Mean Recovery Rate
 
 
42.00% 
 
 
 
 
 
 
 
Company Assumed Recovery Rate
 
 
32.00% 
 
 
 
 
 
 
 
Net unrealized depreciation included in AOCI
14,000,000 
 
14,000,000 
 
 
3,000,000 
 
 
 
 
Fair value of securities transferred from AFS to HTM
 
 
 
 
1,900,000,000 
 
 
 
 
 
Equity Method Investment, Ownership Percentage
 
 
 
 
 
 
 
 
11.30% 
 
Investments in partially-owned insurance companies
654,000,000 
 
654,000,000 
 
 
504,000,000 
 
 
20,000,000 
70,000,000 
Net unrealized appreciation (depreciation) included in OCI
4,000,000 
1,000,000 
6,000,000 
 
 
 
 
 
 
Number of fixed maturities in an unrealized loss position
7,876 
 
7,876 
 
 
 
 
 
 
 
Credit losses recognized in net income for mortgage-backed securities
 
 
 
 
 
 
Credit losses recognized in net income for corporate securities
14,000,000 
4,000,000 
23,000,000 
14,000,000 
 
 
 
 
 
 
Percentage of mortgage-backed securities represented by investments in US government agency bonds
80.00% 
 
80.00% 
 
 
83.00% 
 
 
 
 
Warrants & Rights Outstanding
 
 
 
 
 
 
 
 
 
0.50% 
Ceded Premiums Written
 
 
 
 
 
 
35,000,000 
70,000,000 
 
 
Ceded Commissions
 
 
 
 
 
 
8,000,000 
19,000,000 
 
 
Reinsurance recoverable on losses and loss expenses
11,231,000,000 
 
11,231,000,000 
 
 
11,992,000,000 
54,000,000 
54,000,000 
 
 
Insurance and reinsurance balances payable
4,225,000,000 
 
4,225,000,000 
 
 
4,095,000,000 
12,000,000 
12,000,000 
 
 
Unearned premiums
8,510,000,000 
 
8,510,000,000 
 
 
8,222,000,000 
 
 
 
 
Largest single unrealized loss in the fixed maturities
$ 4,000,000 
 
$ 4,000,000 
 
 
 
 
 
 
 
Investments (Schedule Of Fixed Maturities By Contractual Maturity) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Available for sale, Due in 1 year or less, Amortized Cost
$ 1,979 
$ 2,187 
Available for sale, Due after 1 year through 5 years, Amortized Cost
16,472 
15,444 
Available for sale, Due after 5 years though 10 years, Amortized Cost
13,695 
15,663 
Available for sale, Due after 10 years, Amortized Cost
4,407 
4,521 
Available for sale, Subtotal, Amortized Cost
36,553 
37,815 
Available for sale, Mortgage-backed securities, Amortized Cost
10,858 
10,011 
Available for sale, Amortized Cost
47,411 
47,826 
Available for sale, Fair Value
48,278 
49,395 
Held to maturity, Due in 1 year or less, Amortized Cost
411 
353 
Held to maturity, Due after 1 year through 5 years, Amortized Cost
2,583 
2,603 
Held to maturity, Due after 5 years through 10 years, Amortized Cost
2,278 
1,439 
Held to maturity, Due after 10 years, Amortized Cost
1,534 
953 
Held to maturity, Subtotal, Amortized Cost
6,806 
5,348 
Held to maturity, Mortgage backed securities, Amortized Cost
1,758 
1,983 
Available for sale, Due in 1 year or less, Fair Value
1,995 
2,206 
Available for sale, Due after 1 year through 5 years, Fair Value
16,794 
15,857 
Available for sale, Due after 5 years through 10 years, Fair Value
13,708 
16,089 
Available for sale, Due after 10 years, Fair Value
4,662 
4,957 
Available for sale, Subtotal, Fair Value
37,159 
39,109 
Available for sale, Mortgage backed securities, Fair Value
11,119 
10,286 
Held to maturity, Due in 1 year or less, Fair Value
413 
355 
Held to maturity, Due after 1 year through 5, Fair Value
2,683 
2,693 
Held to maturity, Due after 5 years through 10 years, Fair Value
2,300 
1,489 
Held to maturity, Due after 10 years, Fair Value
1,537 
1,013 
Held to maturity, Subtotal, Fair Value
6,933 
5,550 
Held to maturity, Mortgage backed securities, Fair Value
1,817 
2,039 
Held to maturity, Amortized Cost
8,564 
7,331 
Held to maturity, Fair Value
$ 8,750 
$ 7,589 
Investments (Schedule Of Cost And Fair Value Of Equity Securities) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Cost
$ 434 
$ 440 
Gross unrealized appreciation
54 
83 
Gross unrealized depreciation
(24)
(13)
Fair value
$ 464 
$ 510 
Investments (Net Realized Gains (Losses) And Losses Included In Net Realized Gains (Losses) And Other Comprehensive Income) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
 
 
OTTI on fixed maturities, gross
$ 31 
$ 5 
$ 57 
$ 20 
OTTI on fixed maturities recognized in OCI (pre-tax)
11 
OTTI on fixed maturities, net
(26)
(4)
(46)
(17)
Fixed maturities, Gross realized gains excluding OTTI
19 
73 
91 
163 
Fixed maturities, Gross realized losses excluding OTTI
(44)
(51)
(95)
(97)
Total fixed maturities
(51)
18 
(50)
49 
OTTI on equity securities
(3)
(4)
(7)
Equity securities, Gross realized gains excluding OTTI
10 
43 
Equity securities, Gross realized losses excluding OTTI
(5)
(60)
(7)
(61)
Total equity securities
(56)
32 
(60)
OTTI on other investments
(1)
(1)
(3)
Foreign exchange losses
(2)
(19)
(73)
(42)
Investment and embedded derivative instruments
(22)
(13)
(53)
Fair value adjustments on insurance derivative
(396)
(80)
(337)
(126)
S&P put options and futures
83 
(15)
69 
(106)
Other derivative instruments
(9)
45 
(10)
52 
Other
(1)
(8)
Total net realized gains (losses) (includes $(49), $(38), $(18), and $(11) reclassified from AOCI)
$ (397)
$ (120)
$ (360)
$ (297)
Investments (Aggregate Fair Value And Gross Unrealized Loss By Length Of Time Security Has Continuously Been In Unrealized Loss Position) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Investment [Line Items]
 
 
Document Period End Date
Sep. 30, 2015 
 
Fair Value, 0-12 Months
$ 13,641 
$ 8,559 
Gross Unrealized Loss, 0-12 Months
(532)
(244)
Fair Value, Over 12 Months
1,945 
3,932 
Gross Unrealized Loss, Over 12 Months
(148)
(79)
Total Fair Value
15,586 
12,491 
Total Gross Unrealized Loss
(680)
(323)
U.S. Treasury And Agency [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
228 
350 
Gross Unrealized Loss, 0-12 Months
(1)
(1)
Fair Value, Over 12 Months
59 
666 
Gross Unrealized Loss, Over 12 Months
(9)
Total Fair Value
287 
1,016 
Total Gross Unrealized Loss
(1)
(10)
Foreign [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
3,627 
2,262 
Gross Unrealized Loss, 0-12 Months
(160)
(75)
Fair Value, Over 12 Months
402 
375 
Gross Unrealized Loss, Over 12 Months
(52)
(15)
Total Fair Value
4,029 
2,637 
Total Gross Unrealized Loss
(212)
(90)
Corporate Securities [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
6,641 
4,684 
Gross Unrealized Loss, 0-12 Months
(322)
(150)
Fair Value, Over 12 Months
801 
738 
Gross Unrealized Loss, Over 12 Months
(84)
(22)
Total Fair Value
7,442 
5,422 
Total Gross Unrealized Loss
(406)
(172)
Collateralized Mortgage Backed Securities [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
2,145 
704 
Gross Unrealized Loss, 0-12 Months
(16)
(2)
Fair Value, Over 12 Months
626 
1,663 
Gross Unrealized Loss, Over 12 Months
(10)
(28)
Total Fair Value
2,771 
2,367 
Total Gross Unrealized Loss
(26)
(30)
US States and Political Subdivisions Debt Securities [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
766 
458 
Gross Unrealized Loss, 0-12 Months
(7)
(3)
Fair Value, Over 12 Months
57 
490 
Gross Unrealized Loss, Over 12 Months
(2)
(5)
Total Fair Value
823 
948 
Total Gross Unrealized Loss
(9)
(8)
Fixed Maturities [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
13,407 
8,458 
Gross Unrealized Loss, 0-12 Months
(506)
(231)
Fair Value, Over 12 Months
1,945 
3,932 
Gross Unrealized Loss, Over 12 Months
(148)
(79)
Total Fair Value
15,352 
12,390 
Total Gross Unrealized Loss
(654)
(310)
Equity Securities [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
151 
101 
Gross Unrealized Loss, 0-12 Months
(24)
(13)
Fair Value, Over 12 Months
Gross Unrealized Loss, Over 12 Months
Total Fair Value
151 
101 
Total Gross Unrealized Loss
(24)
(13)
Other Long-term Investments [Member]
 
 
Investment [Line Items]
 
 
Fair Value, 0-12 Months
83 
 
Gross Unrealized Loss, 0-12 Months
(2)
 
Fair Value, Over 12 Months
 
Gross Unrealized Loss, Over 12 Months
 
Total Fair Value
83 
 
Total Gross Unrealized Loss
$ (2)
 
Investments (Schedule Of Components Of Restricted Assets) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Trust funds
$ 10,990 
$ 10,838 
Deposits with non-U.S. regulatory authorities
2,105 
2,305 
Assets pledged under repurchase agreements
1,468 
1,431 
Deposits with U.S. regulatory authorities
1,322 
1,345 
Other pledged assets
388 
457 
Total restricted assets
$ 16,273 
$ 16,376 
Fair Value Measurements (Narrative) (Detail)
9 Months Ended
Sep. 30, 2015
Redemption Notice Periods Lower Range [Member]
 
Fair Value Measurements Of Financial Instruments [Line Items]
 
Notice period for redemption for alternative investments investment funds, days
5 days 
Redemption Notice Periods Upper Range [Member]
 
Fair Value Measurements Of Financial Instruments [Line Items]
 
Notice period for redemption for alternative investments investment funds, days
120 days 
Fair Value Measurements (Financial Instruments Measured At Fair Value On Recurring Basis) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Document Period End Date
Sep. 30, 2015 
 
Available for sale, Fair Value
$ 48,278 
$ 49,395 
Equity securities, at fair value
464 
510 
Short-term investments
1,808 
2,322 
Other investments excluding assets calculated using NAV
741 1
785 2
Securities lending collateral
1,011 
1,330 
Investment derivative instruments, assets
17 
18 
Other derivative instruments, assets
26 
Separate account assets
1,506 
1,490 
Total assets measured at fair value
53,851 1
55,852 2
Investment derivative instruments, liabilities
27 
36 
Other derivative instruments, liability
25 
GLB
744 3
406 3
Total liabilities measured at fair value
778 
467 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
1,919 
1,680 
Equity securities, at fair value
455 
492 
Short-term investments
703 
1,183 
Other investments excluding assets calculated using NAV
314 1
370 2
Securities lending collateral
Investment derivative instruments, assets
17 
18 
Other derivative instruments, assets
26 
Separate account assets
1,423 
1,400 
Total assets measured at fair value
4,857 1
5,143 2
Investment derivative instruments, liabilities
27 
36 
Other derivative instruments, liability
21 
GLB
3
3
Total liabilities measured at fair value
27 
57 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
46,069 
47,491 
Equity securities, at fair value
16 
Short-term investments
1,105 
1,139 
Other investments excluding assets calculated using NAV
218 1
211 2
Securities lending collateral
1,011 
1,330 
Investment derivative instruments, assets
Other derivative instruments, assets
Separate account assets
83 
90 
Total assets measured at fair value
48,491 1
50,279 2
Investment derivative instruments, liabilities
Other derivative instruments, liability
GLB
3
3
Total liabilities measured at fair value
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
290 
224 
Equity securities, at fair value
Short-term investments
Other investments excluding assets calculated using NAV
209 1
204 2
Securities lending collateral
Investment derivative instruments, assets
Other derivative instruments, assets
Separate account assets
Total assets measured at fair value
503 1
430 2
Investment derivative instruments, liabilities
Other derivative instruments, liability
GLB
744 3
406 3
Total liabilities measured at fair value
751 
410 
U.S. Treasury And Agency [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
2,885 
2,820 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
1,919 
1,680 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
966 
1,140 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
Foreign [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
14,291 
15,242 
Foreign [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
Foreign [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
14,238 
15,220 
Foreign [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
53 
22 
Corporate Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
16,892 
17,431 
Corporate Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
Corporate Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
16,709 
17,244 
Corporate Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
183 
187 
Collateralized Mortgage Backed Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
11,119 
10,286 
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
11,065 
10,271 
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
54 
15 
States, Municipalities, And Political Subdivisions [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
3,091 
3,616 
States, Municipalities, And Political Subdivisions [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
States, Municipalities, And Political Subdivisions [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
3,091 
3,616 
States, Municipalities, And Political Subdivisions [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Available for sale, Fair Value
$ 0 
$ 0 
Fair Value Measurements (Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Minimum [Member]
Sep. 30, 2015
Maximum [Member]
Sep. 30, 2015
Guaranteed Living Benefit [Member]
Dec. 31, 2014
Guaranteed Living Benefit [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
Document Period End Date
Sep. 30, 2015 
 
 
 
 
Fair Value
 
 
 
$ 744 1
$ 406 1
Valuation Technique
Actuarial model 1
 
 
 
 
Significant Unobservable Inputs Lapse rate
 
1.00% 1
30.00% 1
 
 
Significant Unobservable Inputs Annuitization rate
 
0.00% 1
55.00% 1
 
 
Fair Value Measurements (Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Jun. 30, 2014
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Document Period End Date
 
 
Sep. 30, 2015 
 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
 
 
 
$ 0 
 
 
Equity Securities [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
Balance- Beginning of Period, Assets
 
 
Transfers out of Level 3, Assets
 
 
 
(2)
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
 
Purchases, Assets
 
 
Sales, Assets
(2)
 
 
Settlements, Assets
 
 
 
Balance-End of Period, Assets
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
(1)
(2)
 
 
 
Equity Securities [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
(1)
(2)
 
 
Short-term Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
 
 
 
Balance- Beginning of Period, Assets
 
 
 
 
 
Transfers out of Level 3, Assets
 
 
 
(7)
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
 
 
 
 
Purchases, Assets
 
 
 
 
 
Sales, Assets
 
 
 
 
 
Balance-End of Period, Assets
 
 
 
 
Short-term Investments [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
 
 
 
 
 
Other Long-term Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
 
Balance- Beginning of Period, Assets
214 
203 
204 
196 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
(7)
(1)
(7)
 
 
Purchases, Assets
21 
15 
 
 
Sales, Assets
 
 
Settlements, Assets
(3)
(3)
(9)
(7)
 
 
Balance-End of Period, Assets
209 
205 
209 
205 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
 
 
Other Long-term Investments [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
 
 
Other Derivative Instruments Fair Value [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Balance - Beginning of Period, Liabilities
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
 
 
 
 
Purchases, Assets
 
 
 
 
 
Sales, Assets
 
 
 
 
 
Settlements, Assets
 
 
 
 
 
Balance-End of Period, Assets
 
 
 
 
Balance - End of Period, Liabilities
 
 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Liabilities
 
 
 
 
Other Derivative Instruments Fair Value [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Liabilities
 
 
 
 
Available-for-sale Securities [Member] |
Foreign [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
29 
 
 
Balance- Beginning of Period, Assets
56 
12 
22 
44 
 
 
Transfers out of Level 3, Assets
 
 
 
(34)
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
(1)
(1)
 
 
Purchases, Assets
 
 
Sales, Assets
(1)
(1)
(3)
 
 
Settlements, Assets
(4)
(4)
 
 
Balance-End of Period, Assets
53 
12 
53 
12 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
(1)
(1)
 
 
 
Available-for-sale Securities [Member] |
Foreign [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
(1)
(1)
 
 
Available-for-sale Securities [Member] |
Corporate Debt Securities [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
15 
35 
 
 
Balance- Beginning of Period, Assets
167 
204 
187 
166 
 
 
Transfers out of Level 3, Assets
 
 
 
(22)
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
(1)
 
 
Purchases, Assets
22 
20 
38 
65 
 
 
Sales, Assets
(5)
(9)
(10)
(17)
 
 
Settlements, Assets
(3)
(13)
(44)
(22)
 
 
Balance-End of Period, Assets
183 
208 
183 
208 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
(2)
 
 
 
Available-for-sale Securities [Member] |
Corporate Debt Securities [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
(1)
(4)
 
 
Available-for-sale Securities [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
Balance- Beginning of Period, Assets
55 
15 
 
 
Transfers out of Level 3, Assets
 
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
 
Purchases, Assets
41 
 
 
Sales, Assets
(1)
(1)
 
 
Settlements, Assets
(1)
(1)
 
 
Balance-End of Period, Assets
54 
15 
54 
15 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
 
 
 
Available-for-sale Securities [Member] |
Collateralized Mortgage Backed Securities [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
 
 
Guaranteed Living Benefit [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Balance - Beginning of Period, Liabilities
347 1
241 2
406 1
193 3
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
 
Transfers out of Level 3, Assets
 
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
 
 
Purchases, Assets
 
 
 
Sales, Assets
 
 
 
Settlements, Assets
 
 
 
Balance - End of Period, Liabilities
744 1
317 2 3
744 1
317 2 3
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Liabilities
397 
76 2
338 1
124 3
 
 
Reported liabilities
1,000 
566 
1,000 
566 
663 
486 
Guaranteed Living Benefit [Member] |
Gain (Loss) on Investments [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Net Realized Gains/Losses, Liabilities
397 
76 
338 
124 
 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
Settlements, Assets
 
 
 
$ 0 
 
 
Fair Value Measurements (Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Document Period End Date
Sep. 30, 2015 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
$ 8,564 
$ 7,331 
Investments in partially-owned insurance companies
654 
504 
Total assets
97,760 
98,248 
Short-term debt
2,103 
2,552 
Long-term debt
4,157 
3,357 
Trust preferred securities
309 
309 
Total liabilities
68,633 
68,661 
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total assets
8,750 
7,589 
Short-term debt
2,105 
2,571 
Long-term debt
4,376 
3,690 
Trust preferred securities
457 
462 
Total liabilities
6,938 
6,723 
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total assets
8,564 
7,331 
Short-term debt
2,103 
2,552 
Long-term debt
4,157 
3,357 
Trust preferred securities
309 
309 
Total liabilities
6,569 
6,218 
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total assets
599 
659 
Short-term debt
Long-term debt
Trust preferred securities
Total liabilities
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total assets
8,137 
6,915 
Short-term debt
2,105 
2,571 
Long-term debt
4,376 
3,690 
Trust preferred securities
457 
462 
Total liabilities
6,938 
6,723 
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total assets
14 
15 
Short-term debt
Long-term debt
Trust preferred securities
Total liabilities
U.S. Treasury And Agency [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
774 
850 
U.S. Treasury And Agency [Member] |
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
756 
832 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
599 
659 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
175 
191 
U.S. Treasury And Agency [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
Foreign [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
818 
963 
Foreign [Member] |
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
784 
916 
Foreign [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
Foreign [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
818 
963 
Foreign [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
Corporate Debt Securities [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
3,126 
2,423 
Corporate Debt Securities [Member] |
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
3,093 
2,323 
Corporate Debt Securities [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
Corporate Debt Securities [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
3,112 
2,408 
Corporate Debt Securities [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
14 
15 
Collateralized Mortgage Backed Securities [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
1,817 
2,039 
Collateralized Mortgage Backed Securities [Member] |
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
1,758 
1,983 
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
1,817 
2,039 
Collateralized Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
US States and Political Subdivisions Debt Securities [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
2,215 
1,314 
US States and Political Subdivisions Debt Securities [Member] |
Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
2,173 
1,277 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
2,215 
1,314 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Fixed maturities held to maturity, at amortized cost (fair value – $8,750 and $7,589)
$ 0 
$ 0 
Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Schedule Of Guaranteed Minimum Benefits Income And Expense) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
$ 4,719 
$ 4,754 
$ 13,006 
$ 13,056 
Policy benefits and other reserve adjustments
89 
125 
384 
383 
Net realized gains (losses)
(397)
(120)
(360)
(297)
Guaranteed Minimum Death Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
15 
17 
47 
54 
Policy benefits and other reserve adjustments
12 
25 
40 
Guaranteed Living Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
30 
35 
92 
105 
Policy benefits and other reserve adjustments
15 
34 
27 
Net realized gains (losses)
(397)
(76)
(338)
(124)
Loss recognized in Net income
(382)
(49)
(280)
(46)
Less: Net cash received
20 
31 
74 
93 
Net increase in liability
$ (402)
$ (80)
$ (354)
$ (139)
Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Guaranteed Minimum Death Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Reported liabilities
$ 113 
$ 111 
 
 
Guaranteed Living Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Reported liabilities
1,000 
663 
566 
486 
Fair value derivative adjustment in liability
$ 744 
$ 406 
 
 
Debt (Details) (USD $)
In Millions, unless otherwise specified
Oct. 1, 2015
Total ACE INA debt issued in October 2015 [Member]
Subsequent Event [Member]
Mar. 1, 2015
Senior Notes [Member]
ACE INA Senior Notes Due March 2025 [Member]
Oct. 1, 2015
Senior Notes [Member]
ACE INA Senior Notes Due November 2020 [Member]
Subsequent Event [Member]
Oct. 1, 2015
Senior Notes [Member]
ACE INA Senior Notes Due November 2022 [Member]
Subsequent Event [Member]
Oct. 1, 2015
Senior Notes [Member]
ACE INA Senior Notes Due May 2026 [Member]
Subsequent Event [Member]
Oct. 1, 2015
Senior Notes [Member]
ACE INA Senior Notes Due November 2045 [Member]
Subsequent Event [Member]
May 1, 2015
ACE INA Senior Notes Due May 2015 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
Face amount of debt
$ 5,300 
$ 800 
$ 1,300 
$ 1,000 
$ 1,500 
$ 1,500 
 
Interest Rate
 
3.15% 
2.30% 
2.875% 
3.35% 
4.35% 
5.60% 
Make Whole Premium Additional Percent
 
0.15% 
0.15% 
0.20% 
0.20% 
0.25% 
 
Current Maturities of Long-Term Deb
 
 
 
 
 
 
$ 450 
Commitments, Contingencies, And Guarantees (Balance Sheet Locations, Fair Values In Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
$ 1,139 
$ 1,329 
Cross Currency Swap [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
95 
95 
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
3,799 
2,467 
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,238 
1,636 
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
222 1
267 1
Investment And Embedded Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
239 
309 
Notional Value/Payment Provision
6,493 
5,794 
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,123 2
1,384 2
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
2
250 2
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
66 
10 
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,189 
1,644 
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,224 3
675 3
Other Assets [Member] |
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
10 
12 
Other Assets [Member] |
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
Other Assets [Member] |
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
Other Assets [Member] |
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
23 2
2
Other Assets [Member] |
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
2
2
Other Assets [Member] |
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
Other Assets [Member] |
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
26 
Other Assets [Member] |
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
 
   3
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(11)
(7)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(5)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(11)
(29)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
1
1
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Investment And Embedded Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(27)
(36)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
2
(21)2
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
2
2
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(7)
(4)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
(7)
(25)
Fixed Maturities Available For Sale [Member] |
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Asset
222 1
291 1
Accounts Payable Future Policy Benefits [Member] |
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair Value, Liability
$ (1,017)3
$ (663)3
Commitments, contingencies, and guarantees Commitments, Contingencies, And Guarantees (Collateral pledged under repurchase agreements) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Document Period End Date
Sep. 30, 2015 
 
Securities Sold under Agreements to Repurchase
$ 1,403 
$ 1,402 
Assets pledged under repurchase agreements
1,468 
1,431 
Securities lending collateral
1,011 
1,330 
Securities lending payable
1,012 
1,331 
Cash and Cash Equivalents [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
 
U.S. Treasury And Agency [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
240 
 
Collateralized Mortgage Backed Securities [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
1,220 
 
Repurchase Agreements [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Secured Borrowings, Gross, Difference, Amount
65 
 
Overnight and Continuous [Member] |
Cash and Cash Equivalents [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Securities lending collateral
492 
 
Overnight and Continuous [Member] |
U.S. Treasury And Agency [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Securities lending collateral
77 
 
Maturity Less than 30 Days [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
422 
 
Maturity Less than 30 Days [Member] |
Cash and Cash Equivalents [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
 
Maturity Less than 30 Days [Member] |
U.S. Treasury And Agency [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
172 
 
Maturity Less than 30 Days [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
250 
 
30 to 90 Days [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
155 
 
30 to 90 Days [Member] |
Cash and Cash Equivalents [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
 
30 to 90 Days [Member] |
U.S. Treasury And Agency [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
61 
 
30 to 90 Days [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
94 
 
Greater than 90 Days [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
891 
 
Greater than 90 Days [Member] |
Cash and Cash Equivalents [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
 
Greater than 90 Days [Member] |
U.S. Treasury And Agency [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
 
Greater than 90 Days [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
 
 
Assets pledged under repurchase agreements
$ 876 
 
Commitments, Contingencies, And Guarantees (Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
$ (344)
$ (63)
$ (272)
$ (233)
Foreign Exchange Future [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
15 
19 
30 
15 
All Other Futures Contracts And Options [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(23)
(15)
(10)
(55)
Convertibles and Bonds with Warrants Attached [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(14)1
(17)1
(14)1
(13)1
Investment And Embedded Derivative Instruments [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(22)
(13)
(53)
Guaranteed Living Benefits [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(396)2
(80)2
(337)2
(126)2
Single-Stock Future [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
84 3
(15)3
71 3
(103)3
Options On Equity Market Indices [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(1)3
3
(2)3
(3)3
Guaranteed Living Benefit And Other Derivative Instruments [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(322)
(50)
(278)
(180)
Other Derivatives [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
$ (9)
$ 45 
$ (10)
$ 52 
Commitments, Contingencies, And Guarantees (Narrative) (Detail) (USD $)
Sep. 30, 2015
Dec. 31, 2014
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Securities lending collateral
$ 1,011,000,000 
$ 1,330,000,000 
Carrying value of limited partnerships and partially-owned investment companies included in other investments
2,200,000,000 
 
Funding commitments relating to limited partnerships and partially-owned investment companies
916,000,000 
 
Unrecognized tax benefits
22,000,000 
 
Derivative liability subject to a master netting agreement
19,000,000 
34,000,000 
Cash and Cash Equivalents [Member] |
Overnight and Continuous [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Securities lending collateral
492,000,000 
 
Foreign [Member] |
Overnight and Continuous [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Securities lending collateral
385,000,000 
 
U.S. Treasury And Agency [Member] |
Overnight and Continuous [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Securities lending collateral
77,000,000 
 
Corporate Securities [Member] |
Overnight and Continuous [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Securities lending collateral
57,000,000 
 
Securities Lending Program [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Secured Borrowings, Gross, Difference, Amount
$ 1,000,000 
 
Shareholders' equity Shareholders' equity (Details)
3 Months Ended 6 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
USD ($)
Sep. 30, 2015
CHF
Sep. 30, 2014
USD ($)
Sep. 30, 2014
CHF
Jun. 30, 2014
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2015
CHF
Sep. 30, 2014
USD ($)
Sep. 30, 2014
CHF
Sep. 30, 2013
USD ($)
May 31, 2015
USD ($)
Dec. 31, 2014
CHF
May 31, 2014
USD ($)
May 31, 2013
USD ($)
Sep. 30, 2015
2015 Stock Repurchase Plan [Member]
USD ($)
Sep. 30, 2015
2015 Stock Repurchase Plan [Member]
USD ($)
Jan. 1, 2015
2015 Stock Repurchase Plan [Member]
USD ($)
Sep. 30, 2014
November 2013 Stock Repurchase Plan [Member]
USD ($)
Sep. 30, 2014
November 2013 Stock Repurchase Plan [Member]
USD ($)
Nov. 30, 2013
November 2013 Stock Repurchase Plan [Member]
USD ($)
Equity, Class of Treasury Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Shares repurchased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0 
$ 734,000,000 
 
$ 450,000,000 
$ 1,019,000,000 
 
Repurchase of outstanding common shares, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,677,663 
 
4,349,302 
10,143,184 
 
Share repurchase authorization remains
 
 
 
 
 
 
 
 
 
 
 
 
 
 
766,000,000 
766,000,000 
 
924,000,000 
924,000,000 
 
Common Shares in treasury, shares
18,770,044 
18,770,044 
 
 
 
18,770,044 
18,770,044 
 
 
 
 
14,172,726 
 
 
 
 
 
 
 
 
Stock repurchase program, authorized amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,500,000,000 
 
 
$ 2,000,000,000 
Par Value Reduction
$ 0 
 0 
$ 0.65 
 0.61 
 
$ 0.65 
 0.62 
$ 1.81 
 1.64 
 
 
 
 
 
 
 
 
 
 
 
Dividends Declared From Additional Paid In Capital
$ 0.67 
 0.65 
$ 0.00 
 0 
 
$ 1.34 
 1.27 
$ 0.24 
 0.20 
 
 
 
 
 
 
 
 
 
 
 
Annual dividend per share approved by shareholders
 
 
 
 
 
 
 
 
 
 
$ 2.68 
 
$ 2.60 
$ 2.04 
 
 
 
 
 
 
Increase to dividend approved by shareholders in January
 
 
 
 
$ 0.12 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
$ 0.67 
 0.65 
$ 0.65 
 0.61 
 
$ 1.99 
 1.89 
$ 2.05 
 1.84 
 
 
 
 
 
 
 
 
 
 
 
Common Stock, Dividend Rate, Per-Dollar-Amount
$ 0.65 
 
 
 
 
$ 0.67 
 
 
 
$ 0.51 
 
 
 
 
 
 
 
 
 
 
Common Stock, Dividend Rate, Per-Dollar-Amount After Increase
 
 
 
 
$ 0.63 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Shares, par value
 
 24.15 
 
 
 
 
 24.15 
 
 
 
 
 24.77 
 
 
 
 
 
 
 
 
Share-Based Compensation (Detail) (USD $)
9 Months Ended 0 Months Ended
Sep. 30, 2015
Feb. 26, 2015
Stock Options [Member]
Feb. 26, 2015
Restricted Stock [Member]
Feb. 26, 2015
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock option vesting period in years
3 years 
 
 
 
Stock option term in years
10 years 
 
 
 
Stock options granted
 
1,891,195 
 
 
Weighted-average grant date fair value for stock options granted
 
$ 18.49 
 
 
Restricted stock award and units vesting period in years
4 years 
 
 
 
Restricted stock awards granted to employees and officers of the company
 
 
1,278,250 
 
Restricted stock units awarded to employees and officers of the company
 
 
 
290,475 
Grant date fair value of awards except for options granted to employees and officers of the company
 
 
$ 114.78 
$ 114.78 
Segment Information (Operations By Segment) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
$ 4,709 
$ 4,729 
$ 13,569 
$ 13,473 
Net premiums earned
4,719 
4,754 
13,006 
13,056 
Losses and loss expenses
2,643 
2,684 
7,182 
7,233 
Policy benefits
89 
125 
384 
383 
Policy acquisition costs
771 
825 
2,205 
2,311 
Administrative expenses
568 
554 
1,700 
1,655 
Underwriting income (loss)
648 
566 
1,535 
1,474 
Net investment income
549 
566 
1,662 
1,675 
Net realized gains (losses) including OTTI
(397)
(120)
(360)
(297)
Interest expense
68 
70 
207 
213 
(Gains) losses from fair value changes in separate account assets
49 
32 
(5)
Other
(37)
(52)
(93)
(134)
Other (income) expense
12 
(46)
(61)
(139)
Amortization of intangible assets
51 
27 
136 
78 
Chubb integration expenses
Income tax expense (benefit)
132 
176 
395 
402 
Net income (loss)
528 
785 
2,151 
2,298 
Insurance - North American P&C [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
1,711 
1,541 
5,116 
4,594 
Net premiums earned
1,682 
1,518 
4,896 
4,547 
Losses and loss expenses
1,175 
1,053 
3,330 
3,009 
Policy acquisition costs
155 
169 
446 
480 
Administrative expenses
192 
165 
552 
501 
Underwriting income (loss)
160 
131 
568 
557 
Net investment income
266 
277 
798 
812 
Net realized gains (losses) including OTTI
(33)
(5)
(39)
(25)
Interest expense
Other
(16)
(31)
(32)
(75)
Amortization of intangible assets
31 
63 
Chubb integration expenses
 
 
Income tax expense (benefit)
70 
73 
239 
247 
Net income (loss)
305 
359 
1,050 
1,165 
Insurance - North American Agriculture [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Underwriting Income Including Losses Related to Crop Derivatives
73 
 
 
 
Net premiums written
737 
764 
1,204 
1,346 
Net premiums earned
739 
766 
1,124 
1,199 
Losses and loss expenses
620 
686 
913 
1,099 
Policy acquisition costs
42 
41 
61 
69 
Administrative expenses
Underwriting income (loss)
77 
36 
147 
26 
Net investment income
17 
19 
Net realized gains (losses) including OTTI
(4)
45 
(6)
51 
Interest expense
Other
(1)
(1)
Amortization of intangible assets
22 
24 
Chubb integration expenses
 
 
Income tax expense (benefit)
15 
23 
29 
21 
Net income (loss)
56 
57 
106 
51 
Crop Derivative Gain or Loss
 
 
 
Insurance - Overseas General [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
1,584 
1,719 
5,047 
5,250 
Net premiums earned
1,615 
1,726 
4,896 
5,047 
Losses and loss expenses
674 
707 
2,304 
2,354 
Policy acquisition costs
405 
418 
1,190 
1,206 
Administrative expenses
246 
258 
756 
764 
Underwriting income (loss)
290 
343 
646 
723 
Net investment income
132 
130 
409 
398 
Net realized gains (losses) including OTTI
(13)
(75)
(10)
(71)
Interest expense
Other
(6)
(13)
(19)
(44)
Amortization of intangible assets
12 
19 
50 
52 
Chubb integration expenses
 
 
Income tax expense (benefit)
76 
97 
197 
189 
Net income (loss)
326 
293 
814 
849 
Global Reinsurance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
185 
208 
719 
794 
Net premiums earned
203 
255 
649 
800 
Losses and loss expenses
20 
92 
191 
327 
Policy acquisition costs
52 
74 
166 
201 
Administrative expenses
12 
13 
37 
41 
Underwriting income (loss)
119 
76 
255 
231 
Net investment income
76 
81 
230 
238 
Net realized gains (losses) including OTTI
(14)
(20)
(17)
Interest expense
Other
(2)
(10)
(10)
(39)
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
11 
23 
31 
Net income (loss)
174 
161 
449 
456 
Life [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Life underwriting income
64 
 
 
 
Net premiums written
492 
497 
1,483 
1,489 
Net premiums earned
480 
489 
1,441 
1,463 
Losses and loss expenses
153 
145 
442 
442 
Policy benefits
89 
125 
384 
383 
Policy acquisition costs
117 
123 
342 
355 
Administrative expenses
74 
71 
221 
212 
Underwriting income (loss)
47 
25 
52 
71 
Net investment income
66 
69 
198 
199 
Net realized gains (losses) including OTTI
(326)
(89)
(282)
(237)
Interest expense
10 
(Gains) losses from fair value changes in separate account assets
49 
32 
(5)
Other
(13)
(3)
(43)
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
12 
27 
34 
Net income (loss)
(258)
(14)
(53)
(14)
Corporate And Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Losses and loss expenses
Policy acquisition costs
 
 
Administrative expenses
44 
44 
131 
132 
Underwriting income (loss)
(45)
(45)
(133)
(134)
Net investment income
10 
Net realized gains (losses) including OTTI
(7)
(2)
(3)
Interest expense
62 
61 
190 
188 
Other
10 
18 
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
(45)
(40)
(120)
(120)
Net income (loss)
$ (75)
$ (71)
$ (215)
$ (209)
Segment Information (Net Premiums Earned For Segment By Product) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
$ 2,060 
$ 2,079 
$ 5,038 
$ 5,046 
Casualty
1,548 
1,493 
4,642 
4,515 
Life, Accident & Health
1,111 
1,182 
3,326 
3,495 
Net premiums earned
4,719 
4,754 
13,006 
13,056 
Insurance - North American P&C [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
1,682 
1,518 
4,896 
4,547 
Insurance - North American P&C [Member] |
Property Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
511 
420 
1,428 
1,248 
Insurance - North American P&C [Member] |
Casualty Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
1,063 
993 
3,157 
2,992 
Insurance - North American P&C [Member] |
Life Accident And Health Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
108 
105 
311 
307 
Insurance - North American Agriculture [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
739 
766 
1,124 
1,199 
Insurance - North American Agriculture [Member] |
Property Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
739 
766 
1,124 
1,199 
Insurance - North American Agriculture [Member] |
Casualty Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
Insurance - North American Agriculture [Member] |
Life Accident And Health Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
Insurance - Overseas General [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
1,615 
1,726 
4,896 
5,047 
Insurance - Overseas General [Member] |
Property Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
706 
744 
2,163 
2,164 
Insurance - Overseas General [Member] |
Casualty Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
386 
394 
1,159 
1,158 
Insurance - Overseas General [Member] |
Life Accident And Health Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
523 
588 
1,574 
1,725 
Global Reinsurance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
203 
255 
649 
800 
Global Reinsurance [Member] |
Property Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
104 
149 
323 
435 
Global Reinsurance [Member] |
Casualty Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
99 
106 
326 
365 
Global Reinsurance [Member] |
Life Accident And Health Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
Life [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
480 
489 
1,441 
1,463 
Life [Member] |
Property Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
Life [Member] |
Casualty Insurance Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
Life [Member] |
Life Accident And Health Product Line [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums earned
$ 480 
$ 489 
$ 1,441 
$ 1,463 
Earnings Per Share (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 528 
$ 785 
$ 2,151 
$ 2,298 
Weighted-average shares outstanding
324,210,936 
334,472,324 
325,904,502 
337,083,498 
Share-based compensation plans
2,962,484 
3,201,656 
3,269,724 
3,298,569 
Weighted-average shares outstanding and assumed conversions
327,173,420 
337,673,980 
329,174,226 
340,382,067 
Basic earnings per share (US$ per share)
$ 1.63 
$ 2.35 
$ 6.60 
$ 6.82 
Diluted earnings per share (US$ per share)
$ 1.62 
$ 2.32 
$ 6.53 
$ 6.75 
Potential anti-dilutive share conversions
1,907,815 
1,227,575 
1,503,830 
1,410,340 
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Balance Sheet) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Dec. 31, 2013
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
$ 62,384 
$ 62,904 
 
 
Cash
1,038 1 2
655 1 3
806 4
579 4
Insurance and reinsurance balances receivable
5,290 
5,426 
 
 
Reinsurance recoverable on losses and loss expenses
11,231 
11,992 
 
 
Reinsurance recoverable on policy benefits
194 
217 
 
 
Value of business acquired
410 
466 
 
 
Goodwill and other intangible assets
5,713 
5,724 
 
 
Investments in subsidiaries
 
 
Due from subsidiaries and affiliates, net
 
 
Other assets
11,500 
10,864 
 
 
Total assets
97,760 
98,248 
 
 
Unpaid losses and loss expenses
37,564 
38,315 
 
 
Unearned premiums
8,510 
8,222 
 
 
Future policy benefits
4,776 
4,754 
 
 
Due to subsidiaries and affiliates, net
 
 
Short-term debt
2,103 
2,552 
 
 
Affiliated notional cash pooling programs
 
 
Long-term debt
4,157 
3,357 
 
 
Trust preferred securities
309 
309 
 
 
Other liabilities
11,214 
11,152 
 
 
Total liabilities
68,633 
68,661 
 
 
Total shareholders' equity
29,127 
29,587 
30,017 
 
Total liabilities and shareholders’ equity
97,760 
98,248 
 
 
ACE Limited (Parent Guarantor)
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
29 
30 
 
 
Cash
17 1 2
1 3
4
4
Insurance and reinsurance balances receivable
 
 
Reinsurance recoverable on losses and loss expenses
 
 
Reinsurance recoverable on policy benefits
 
 
Value of business acquired
 
 
Goodwill and other intangible assets
 
 
Investments in subsidiaries
29,441 
29,497 
 
 
Due from subsidiaries and affiliates, net
866 
583 
 
 
Other assets
 
 
Total assets
30,362 
30,114 
 
 
Unpaid losses and loss expenses
 
 
Unearned premiums
 
 
 
Future policy benefits
 
 
Due to subsidiaries and affiliates, net
 
 
Short-term debt
 
 
Affiliated notional cash pooling programs
973 2
246 3
 
 
Long-term debt
 
 
Trust preferred securities
 
 
Other liabilities
262 
281 
 
 
Total liabilities
1,235 
527 
 
 
Total shareholders' equity
29,127 
29,587 
 
 
Total liabilities and shareholders’ equity
30,362 
30,114 
 
 
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
35 
225 
 
 
Cash
1 2
1 3
12 4
16 4
Insurance and reinsurance balances receivable
 
 
Reinsurance recoverable on losses and loss expenses
 
 
Reinsurance recoverable on policy benefits
 
 
Value of business acquired
 
 
Goodwill and other intangible assets
 
 
Investments in subsidiaries
19,184 
18,762 
 
 
Due from subsidiaries and affiliates, net
 
 
Other assets
272 
295 
 
 
Total assets
19,496 
19,283 
 
 
Unpaid losses and loss expenses
 
 
Unearned premiums
 
 
 
Future policy benefits
 
 
Due to subsidiaries and affiliates, net
698 
422 
 
 
Short-term debt
700 
1,150 
 
 
Affiliated notional cash pooling programs
188 2
309 3
 
 
Long-term debt
4,145 
3,345 
 
 
Trust preferred securities
309 
309 
 
 
Other liabilities
1,458 
1,404 
 
 
Total liabilities
7,498 
6,939 
 
 
Total shareholders' equity
11,998 
12,344 
 
 
Total liabilities and shareholders’ equity
19,496 
19,283 
 
 
Other ACE Limited Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
62,320 
62,649 
 
 
Cash
2,177 1 2
1,209 1 3
1,391 4
748 4
Insurance and reinsurance balances receivable
6,284 
6,178 
 
 
Reinsurance recoverable on losses and loss expenses
20,039 
20,992 
 
 
Reinsurance recoverable on policy benefits
1,148 
1,194 
 
 
Value of business acquired
410 
466 
 
 
Goodwill and other intangible assets
5,713 
5,724 
 
 
Investments in subsidiaries
 
 
Due from subsidiaries and affiliates, net
 
 
Other assets
14,880 
14,196 
 
 
Total assets
112,971 
112,608 
 
 
Unpaid losses and loss expenses
45,810 
46,770 
 
 
Unearned premiums
10,329 
9,958 
 
 
Future policy benefits
5,730 
5,731 
 
 
Due to subsidiaries and affiliates, net
168 
161 
 
 
Short-term debt
1,403 
1,402 
 
 
Affiliated notional cash pooling programs
2
3
 
 
Long-term debt
12 
12 
 
 
Trust preferred securities
 
 
Other liabilities
12,892 
12,659 
 
 
Total liabilities
76,344 
76,693 
 
 
Total shareholders' equity
36,627 
35,915 
 
 
Total liabilities and shareholders’ equity
112,971 
112,608 
 
 
Consolidating Adjustments and Eliminations
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
 
 
Cash
(1,161)1 2
(555)1 3
(605)4
(185)4
Insurance and reinsurance balances receivable
(994)
(752)
 
 
Reinsurance recoverable on losses and loss expenses
(8,808)
(9,000)
 
 
Reinsurance recoverable on policy benefits
(954)
(977)
 
 
Value of business acquired
 
 
Goodwill and other intangible assets
 
 
Investments in subsidiaries
(48,625)
(48,259)
 
 
Due from subsidiaries and affiliates, net
(866)
(583)
 
 
Other assets
(3,661)
(3,631)
 
 
Total assets
(65,069)
(63,757)
 
 
Unpaid losses and loss expenses
(8,246)
(8,455)
 
 
Unearned premiums
(1,819)
(1,736)
 
 
Future policy benefits
(954)
(977)
 
 
Due to subsidiaries and affiliates, net
(866)
(583)
 
 
Short-term debt
 
 
Affiliated notional cash pooling programs
(1,161)2
(555)3
 
 
Long-term debt
 
 
Trust preferred securities
 
 
Other liabilities
(3,398)
(3,192)
 
 
Total liabilities
(16,444)
(15,498)
 
 
Total shareholders' equity
(48,625)
(48,259)
 
 
Total liabilities and shareholders’ equity
$ (65,069)
$ (63,757)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Operations) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
$ 4,709 
$ 4,729 
$ 13,569 
$ 13,473 
Net premiums earned
4,719 
4,754 
13,006 
13,056 
Net investment income
549 
566 
1,662 
1,675 
Equity in earnings of subsidiaries
Net realized gains (losses) including OTTI
(397)
(120)
(360)
(297)
Losses and loss expenses
2,643 
2,684 
7,182 
7,233 
Policy benefits
89 
125 
384 
383 
Policy acquisition costs and administrative expenses
1,339 
1,379 
3,905 
3,966 
Interest (income) expense
68 
70 
207 
213 
Other (income) expense
12 
(46)
(61)
(139)
Amortization of intangible assets
51 
27 
136 
78 
Chubb integration expenses
Income tax expense (benefit)
132 
176 
395 
402 
Net income (loss)
528 
785 
2,151 
2,298 
Comprehensive income (loss)
(271)
298 
768 
2,754 
ACE Limited (Parent Guarantor)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
Net premiums earned
Net investment income
Equity in earnings of subsidiaries
488 
745 
2,037 
2,192 
Net realized gains (losses) including OTTI
Losses and loss expenses
Policy benefits
Policy acquisition costs and administrative expenses
15 
18 
47 
57 
Interest (income) expense
(8)
(7)
(23)
(26)
Other (income) expense
(51)
(54)
(149)
(146)
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
12 
11 
Net income (loss)
528 
785 
2,151 
2,298 
Comprehensive income (loss)
(271)
298 
768 
2,754 
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
Net premiums earned
Net investment income
Equity in earnings of subsidiaries
255 
258 
755 
669 
Net realized gains (losses) including OTTI
(4)
46 
(6)
53 
Losses and loss expenses
Policy benefits
Policy acquisition costs and administrative expenses
20 
20 
Interest (income) expense
68 
68 
206 
209 
Other (income) expense
(5)
(12)
22 
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
(31)
(11)
(84)
(66)
Net income (loss)
205 
239 
613 
538 
Comprehensive income (loss)
(265)
33 
(332)
810 
Other ACE Limited Subsidiaries
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
4,709 
4,729 
13,569 
13,473 
Net premiums earned
4,719 
4,754 
13,006 
13,056 
Net investment income
547 
565 
1,658 
1,672 
Equity in earnings of subsidiaries
Net realized gains (losses) including OTTI
(393)
(166)
(354)
(350)
Losses and loss expenses
2,643 
2,684 
7,182 
7,233 
Policy benefits
89 
125 
384 
383 
Policy acquisition costs and administrative expenses
1,317 
1,355 
3,838 
3,889 
Interest (income) expense
24 
30 
Other (income) expense
68 
100 
(15)
Amortization of intangible assets
51 
27 
136 
78 
Chubb integration expenses
 
 
Income tax expense (benefit)
159 
183 
467 
457 
Net income (loss)
538 
764 
2,179 
2,323 
Comprehensive income (loss)
(262)
276 
795 
2,778 
Consolidating Adjustments and Eliminations
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
Net premiums earned
Net investment income
Equity in earnings of subsidiaries
(743)
(1,003)
(2,792)
(2,861)
Net realized gains (losses) including OTTI
Losses and loss expenses
Policy benefits
Policy acquisition costs and administrative expenses
Interest (income) expense
Other (income) expense
Amortization of intangible assets
Chubb integration expenses
 
 
Income tax expense (benefit)
Net income (loss)
(743)
(1,003)
(2,792)
(2,861)
Comprehensive income (loss)
$ 527 
$ (309)
$ (463)
$ (3,588)
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Cash Flows) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
$ 2,699 
$ 3,222 
Purchases of fixed maturities available for sale
(13,060)
(11,867)
Purchases of fixed maturities held to maturity
(39)
(185)
Purchases of equity securities
(122)
(222)
Sales of fixed maturities available for sale
5,233 
6,306 
Sales of equity securities
150 
322 
Maturities and redemptions of fixed maturities available for sale
5,257 
4,814 
Maturities and redemptions of fixed maturities held to maturity
552 
617 
Net change in short-term investments
421 
(984)
Net derivative instruments settlements
62 
(170)
Cash Acquired from Acquisition
620 
Payments to Acquire Businesses, Net of Cash Acquired
259 
(172)
Capital contribution
 
Other
(138)
(147)
Net cash flows used for investing activities
(1,425)
(1,688)
Dividends paid on Common Shares
(644)
(646)
Common Shares repurchased
(758)
(1,007)
Proceeds from issuance of long-term debt
800 
699 
Proceeds from issuance of short-term debt
1,478 
1,827 
Repayments of Long-term Debt
(451)
(501)
Repayments of Short-term Debt
(1,477)
(1,827)
Proceeds from share-based compensation plans, including windfall tax benefits
89 
94 
Dividend to Parent Company
Capital contribution
 
Advances To From Affiliates Financing Activities
Net proceeds from (payments to) affiliated notional cash pooling program
Policyholder contract deposits
351 
189 
Policyholder contract withdrawals
(159)
(62)
Other
(6)
(6)
Net cash flows (used for) from financing activities
(777)
(1,240)
Effect of foreign currency rate changes on cash and cash equivalents
(114)
(67)
Net increase in cash
383 
227 
Cash – beginning of period
655 1 2
579 3
Cash – end of period
1,038 1 4
806 3
ACE Limited (Parent Guarantor)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
350 
168 
Purchases of fixed maturities available for sale
Purchases of fixed maturities held to maturity
Purchases of equity securities
Sales of fixed maturities available for sale
Sales of equity securities
Maturities and redemptions of fixed maturities available for sale
Maturities and redemptions of fixed maturities held to maturity
Net change in short-term investments
Net derivative instruments settlements
Payments to Acquire Businesses, Net of Cash Acquired
 
Capital contribution
Other
Net cash flows used for investing activities
Dividends paid on Common Shares
(644)
(646)
Common Shares repurchased
Proceeds from issuance of long-term debt
 
Proceeds from issuance of short-term debt
 
Repayments of Long-term Debt
 
Repayments of Short-term Debt
Proceeds from share-based compensation plans, including windfall tax benefits
Dividend to Parent Company
Capital contribution
 
Advances To From Affiliates Financing Activities
(416)
97 
Net proceeds from (payments to) affiliated notional cash pooling program
727 1
388 3
Policyholder contract deposits
Policyholder contract withdrawals
Other
Net cash flows (used for) from financing activities
(333)
(161)
Effect of foreign currency rate changes on cash and cash equivalents
Net increase in cash
17 
Cash – beginning of period
1 2
3
Cash – end of period
17 1 4
3
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
(46)
139 
Purchases of fixed maturities available for sale
Purchases of fixed maturities held to maturity
Purchases of equity securities
Sales of fixed maturities available for sale
Sales of equity securities
Maturities and redemptions of fixed maturities available for sale
Maturities and redemptions of fixed maturities held to maturity
Net change in short-term investments
215 
(16)
Net derivative instruments settlements
(10)
53 
Payments to Acquire Businesses, Net of Cash Acquired
Capital contribution
(625)
(230)
Other
(25)
(9)
Net cash flows used for investing activities
(445)
(202)
Dividends paid on Common Shares
Common Shares repurchased
Proceeds from issuance of long-term debt
800 
699 
Repayments of Long-term Debt
(450)
(500)
Repayments of Short-term Debt
Proceeds from share-based compensation plans, including windfall tax benefits
Dividend to Parent Company
Capital contribution
 
Advances To From Affiliates Financing Activities
272 
(166)
Net proceeds from (payments to) affiliated notional cash pooling program
(121)1
32 3
Policyholder contract deposits
Policyholder contract withdrawals
Other
(6)
(6)
Net cash flows (used for) from financing activities
495 
59 
Effect of foreign currency rate changes on cash and cash equivalents
Net increase in cash
(4)
Cash – beginning of period
1 2
16 3
Cash – end of period
1 4
12 3
Other ACE Limited Subsidiaries
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
2,671 
3,115 
Purchases of fixed maturities available for sale
(13,052)
(11,870)
Purchases of fixed maturities held to maturity
(39)
(185)
Purchases of equity securities
(122)
(222)
Sales of fixed maturities available for sale
5,233 
6,309 
Sales of equity securities
150 
322 
Maturities and redemptions of fixed maturities available for sale
5,257 
4,814 
Maturities and redemptions of fixed maturities held to maturity
552 
617 
Net change in short-term investments
206 
(969)
Net derivative instruments settlements
72 
(223)
Payments to Acquire Businesses, Net of Cash Acquired
259 
(172)
Capital contribution
Other
(121)
(138)
Net cash flows used for investing activities
(1,605)
(1,717)
Dividends paid on Common Shares
Common Shares repurchased
(758)
(1,007)
Proceeds from issuance of long-term debt
 
Proceeds from issuance of short-term debt
1,478 
1,827 
Repayments of Long-term Debt
(1)
(1)
Repayments of Short-term Debt
(1,477)
(1,827)
Proceeds from share-based compensation plans, including windfall tax benefits
89 
94 
Dividend to Parent Company
(276)
(200)
Capital contribution
625 
230 
Advances To From Affiliates Financing Activities
144 
69 
Net proceeds from (payments to) affiliated notional cash pooling program
1
3
Policyholder contract deposits
351 
189 
Policyholder contract withdrawals
(159)
(62)
Other
Net cash flows (used for) from financing activities
16 
(688)
Effect of foreign currency rate changes on cash and cash equivalents
(114)
(67)
Net increase in cash
968 
643 
Cash – beginning of period
1,209 1 2
748 3
Cash – end of period
2,177 1 4
1,391 3
Consolidating Adjustments and Eliminations
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
(276)
(200)
Purchases of fixed maturities available for sale
(8)
Purchases of fixed maturities held to maturity
Purchases of equity securities
Sales of fixed maturities available for sale
(3)
Sales of equity securities
Maturities and redemptions of fixed maturities available for sale
Maturities and redemptions of fixed maturities held to maturity
Net change in short-term investments
Net derivative instruments settlements
Payments to Acquire Businesses, Net of Cash Acquired
Capital contribution
625 
230 
Other
Net cash flows used for investing activities
625 
230 
Dividends paid on Common Shares
Common Shares repurchased
Proceeds from issuance of long-term debt
 
Proceeds from issuance of short-term debt
 
Repayments of Long-term Debt
 
Repayments of Short-term Debt
Proceeds from share-based compensation plans, including windfall tax benefits
Dividend to Parent Company
276 
200 
Capital contribution
(625)
(230)
Advances To From Affiliates Financing Activities
Net proceeds from (payments to) affiliated notional cash pooling program
(606)1
(420)3
Policyholder contract deposits
Policyholder contract withdrawals
Other
Net cash flows (used for) from financing activities
(955)
(450)
Effect of foreign currency rate changes on cash and cash equivalents
Net increase in cash
(606)
(420)
Cash – beginning of period
(555)1 2
(185)3
Cash – end of period
$ (1,161)1 4
$ (605)3