UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – January 29, 2013

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

 
					
Switzerland	 	1-11778	 	98-0091805	
(State or other jurisdiction of
Incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	
Baerengasse 32
CH-8001 Zurich, Switzerland
Telephone: +41 (0)43 456 76 00
(Address of principal executive offices)
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02. Results of Operations and Financial Condition
On January 29, 2013, ACE Limited issued a Press Release reporting its fourth quarter 2012 results and the availability of its fourth quarter 2012 Financial Supplement. The Press Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits
 
(d)	Exhibits	

Exhibit
Number	  	Description	
		
99.1	  	Press Release, Dated January 29, 2013, Reporting Fourth Quarter 2012 Results	
99.2	  	Fourth Quarter 2012 Financial Supplement	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ACE LIMITED	
		
By:	 	/s/ Philip V. Bancroft	
	 	Philip V. Bancroft	
	 	Chief Financial Officer	
DATE: January 29, 2013

EXHIBIT INDEX

Number	  	Description	  	Method of Filing	
			
99.1	  	Press Release, Dated January 29, 2013,	  	Furnished herewith	
	  	Reporting Fourth Quarter 2012 Results	  		
			
99.2	  	Fourth Quarter 2012 Financial Supplement	  	Furnished herewith	

Exhibit 99.1

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

							
	 		 	Investor Contact:	    	Helen M. Wilson	
	 		 		    	(441) 299-9283	
	 		 		    	helen.wilson@acegroup.com	
				
	 		 	Media Contact:	    	Stephen M. Wasdick	
	 		 		    	(212) 827-4444	
	 		 		    	stephen.wasdick@acegroup.com	
ACE REPORTS FOURTH QUARTER OPERATING INCOME OF $492 MILLION
AFTER SUPERSTORM SANDY LOSSES OF $393 MILLION AFTER-TAX;
BOOK VALUE UP 2.1% IN QUARTER WITH OPERATING ROE OF 8%
 
 	•	 	Book value and tangible book value up 13.1% and 15.5% for the year	
 
 	•	 	Full-year net income up over 75% and operating income up over 12%	
 
 	•	 	Full-year combined ratio was 93.9%; operating ROE was 11.0%	
 
 	•	 	Total net premiums written up 6.0% for the year in constant dollars and 9.1% excluding crop insurance	
 
 	•	 	Full-year underwriting income was $1.2 billion, up over 11%	
 
 	•	 	Full-year investment income was $2.2 billion, down 2.8%	
 
 	•	 	Operating cash flow was $4 billion for the year	
ZURICH — January 29, 2013 — ACE Limited (NYSE: ACE) today reported net income for the quarter ended December 31, 2012, of $2.22 per share, compared with $2.15 per share for the same quarter last year. (1) Income excluding net realized gains (losses) was $1.43 per share, compared with $1.90 per share for the same quarter last year. (2) After-tax catastrophe losses for the fourth quarter 2012 were $400 million, net of reinsurance and including reinstatement premiums, or $1.16 per share, compared with $137 million, or $0.40 per share, for the same quarter last year. Book value and tangible book value increased 2.1% and 2.7%, respectively, from September 30, 2012. Book value and tangible book value per share now stand at $80.90 and $66.28, respectively. Operating return on equity (ROE) for the quarter was 8.0%. (2) The property and casualty (P&C) combined ratio for the quarter was 105.5%, which includes net pre-tax losses from Superstorm Sandy of $502 million ($393 million after-tax) and a pre-tax charge for asbestos and environmental and other run-off business of $140 million ($90 million after-tax). Operating income includes a tax benefit of $121 million from the favorable resolution of prior years’ tax matters.

Fourth Quarter Summary
(in millions, except per share amounts)
(Unaudited)

 	  	 	 	  	 	 	  	 	 	 	(Per Share - Diluted)	 	
 	  	2012	 	  	2011	 	  	Change	 	 	2012	 	  	2011	 	  	Change	 	
Net income	  	$	765	  	  	$	735	  	  	 	4	% 	 	$	2.22	  	  	$	2.15	  	  	 	3	% 	
Net realized gains (losses), net of tax	  	 	273	  	  	 	87	  	  	 	214	% 	 	 	0.79	  	  	 	0.25	  	  	 	216	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Income excluding net realized gains (losses), net of tax (2)	  	$	492	  	  	$	648	  	  	 	(24	)% 	 	$	1.43	  	  	$	1.90	  	  	 	(25	)% 	
For the year ended December 31, 2012, net income was $7.89 per share, compared with $4.52 per share for 2011. Income excluding net realized gains (losses) was $7.65 per share, compared with $6.84 per share for 2011. Book value increased $3.2 billion, up 13.1% from December 31, 2011, and tangible book value increased $3.0 billion, up 15.5%. The P&C combined ratio for the year was 93.9%.
Full Year Summary
(in millions, except per share amounts)
(Unaudited)

 	  	 	 	  	 	 	 	 	 	 	(Per Share - Diluted)	 	
 	  	2012	 	  	2011	 	 	Change	 	 	2012	 	  	2011	 	 	Change	 	
Net income	  	$	2,706	  	  	$	1,540	  	 	 	76	% 	 	$	7.89	  	  	$	4.52	  	 	 	75	% 	
Net realized gains (losses), net of tax	  	 	82	  	  	 	(791	) 	 	 	NM	  	 	 	0.24	  	  	 	(2.32	) 	 	 	NM	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Income excluding net realized gains (losses), net of tax (2)	  	$	2,624	  	  	$	2,331	  	 	 	13	% 	 	$	7.65	  	  	$	6.84	  	 	 	12	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had a good fourth quarter, which contributed to an excellent year. Even with the impact of Superstorm Sandy, we produced over $490 million of operating income and increased book value per share 2%. These results continue to demonstrate the strength of our underwriting culture and balance sheet, and the benefits of our globally diversified business.
“For the year, after-tax operating income was $2.6 billion, up 13% from 2011. We produced $1.2 billion in underwriting income – an increase of 11% over prior year – and a combined ratio of 93.9%. This is an excellent underwriting result, particularly given the worst drought conditions in the U.S. in 25 years as well as the losses from Sandy. We also produced strong investment results, with investment income down less than 3% – a good performance considering record low interest rates. Our operating ROE was 11% and per share book value grew 12% for the year, bringing three-year and five-year compounded annual book value per share growth to 11.4% and 10.7%, respectively.
“Net premiums globally grew 6% for the year and in constant dollars – 9% excluding our crop insurance business. Our premium revenue growth is benefitting from an improved price environment in the U.S., our large and growing business presence around the world in Asia, Latin America and Europe, and our unique and balanced portfolio of insurance products including commercial, specialty and personal P&C,
 
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personal accident and life. Insurance pricing in the U.S. continues to improve and price increases are spreading to more product classes – a trend that has continued into the first quarter. With low interest rates pressuring industry returns, we expect this orderly and rational trend of price increases to continue. For our company, a continued focus on underwriting discipline, enhanced through the use of portfolio management and data analytics, is contributing significantly to both our premium growth and underwriting profitability, and we expect this discipline will continue to make a notable difference in our results going forward.”
Operating highlights for the quarter and full year ended December 31, 2012, were as follows: (1)
 
 	•	 	For the quarter, P&C net premiums written increased 0.3%, and 0.7% on a constant-dollar basis. Excluding the company’s crop insurance business, P&C net premiums written increased 7.2%, and 7.8% on a constant-dollar basis. For the year, P&C net premiums written increased 4.7%, and 6.3% on a constant-dollar basis. Excluding the crop insurance business, P&C net premiums written for the year increased 8.0%, and 9.9% on a constant-dollar basis.	
 
 	•	 	Total pre-tax and after-tax catastrophe losses including reinstatement premiums for the quarter were $511 million, and $400 million, respectively, which included Superstorm Sandy losses of $502 million and $393 million pre-tax and after-tax, respectively. Total pre-tax and after-tax catastrophe losses for the same quarter in 2011 were $155 million and $137 million, respectively.	
 
 	•	 	The P&C combined ratio for the quarter was 105.5%, which includes losses from Superstorm Sandy and a pre-tax charge for asbestos and environmental and other run-off business reserve strengthening of $140 million ($90 million after-tax).	
 
 	•	 	The P&C current accident year combined ratio for the quarter excluding catastrophe losses improved to 91.4% compared with 92.0% last year. Excluding crop insurance and catastrophe losses, the P&C current accident year combined ratio for the quarter was 90.9% compared with 92.9% last year.	
 
 	•	 	Favorable prior period development pre-tax for the quarter, including the charge for asbestos and environmental, was $37 million, representing 1.1 percentage points of the combined ratio. The quarter included a reserve charge for asbestos and environmental and other run-off business of $140 million of which $118 million was a pre-tax addition to our asbestos and environmental reserves.	
 
 	•	 	The P&C expense ratio for the quarter was 30.0% compared with 29.6% last year. For the year, the P&C expense ratio was 28.2% compared with 28.7% in 2011.	
 
 	•	 	Operating cash flow was $970 million for the quarter and $4.0 billion for the year.	
 
 	•	 	Net loss reserves increased $780 million for the year.	
 
 	•	 	The underwriting loss (2)  for the quarter was $90 million. Underwriting income (2)  for the year was up 11.2% to $1.24 billion compared with $1.12 billion in 2011.	
 
 	•	 	Net investment income for the quarter was $567 million compared with $565 million in 2011. The quarterly amount included $42 million of greater than expected private equity and other distributions and the income benefit of an insurance contract classified as a deposit. Net investment income for the year was $2.2 billion, down 2.8% compared to last year.	
 
 	•	 	The operating effective tax rate (2)  for the quarter and year included a tax benefit of $121 million from the favorable resolution of prior years’ tax matters.	
 
 	•	 	Net realized and unrealized gains pre-tax for the quarter totaled $189 million, which included net realized gains from derivative accounting related to variable annuity reinsurance of $173 million, including the effect of foreign exchange.	
 
 	•	 	Operating return on equity (2)  was 8.0% for the quarter and 11.0% for the year. Return on equity computed using net income was 11.2% and 10.4% for the year.	
 
 	•	 	Book value per share (2)  increased 1.9% to $80.90 from $79.36 at September 30, 2012, and increased 12.0% from $72.22 at December 31, 2011. (3)	
 
 	•	 	Tangible book value per share (2)  increased 2.5% to $66.28 from $64.67 at September 30, 2012, and increased 14.3% from $57.97 at December 31, 2011.	
 
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Details of financial results by business segment are available in the ACE Limited Financial Supplement. Key segment items for the quarter and full year ended December 31, 2012, include:
 
 	•	 	Insurance-North American: Net premiums written decreased 6.5% for the quarter primarily due to increased crop insurance premium cessions to the U.S. government as a result of the government’s crop insurance profit and loss calculation formula. Excluding the crop insurance business, net premiums written increased 6.9%. For the quarter, the combined ratio was 111.9% compared with 91.0%. For the quarter, the current accident year combined ratio excluding catastrophe losses was 90.0% compared with 90.3% last year, and excluding the crop insurance business it was 88.5%. For the year, the combined ratio was 97.1% compared with 93.8% last year. For the year, the current accident year combined ratio excluding catastrophe losses was 93.4% compared with 91.5% last year, and excluding the crop insurance business it was 90.1%.	
 
 	•	 	Insurance-Overseas General: Net premiums written increased 7.1% for the quarter, and 8.5% on a constant-dollar basis. The combined ratio was 95.4% compared with 94.5%. The current accident year combined ratio excluding catastrophe losses was 92.5% compared with 93.4% last year. For the year, the combined ratio was 89.7% compared with 94.5% last year. For the year, the current accident year combined ratio excluding catastrophe losses was 92.2% compared with 93.1% last year.	
 
 	•	 	Global Reinsurance: Net premiums written increased 12.0% for the quarter. The combined ratio was 101.7% compared with 77.1%. The current accident year combined ratio excluding catastrophe losses was 69.9% compared with 75.3% last year. For the year, the combined ratio was 77.5% compared with 85.6% last year. For the year, the current accident year combined ratio excluding catastrophe losses was 72.8% compared with 75.2% last year.	
 
 	•	 	Life: Operating income for the quarter was $74 million compared with $79 million last year. Excluding the life reinsurance business, operating income was up $5 million.	
Please refer to the ACE Limited Financial Supplement , dated December 31, 2012, which is posted on the company’s website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure.
The company also issued 2013 guidance. Operating income is expected to range between $6.60 and $7.00 per share. Catastrophe losses included in the estimate are $475 million pre-tax ($395 million after-tax), which are in line with last year’s catastrophe loss guidance. The operating income projections included in this guidance are for current accident year results only and by definition do not include any estimate for prior period reserve development.
ACE will host its fourth quarter earnings conference call and webcast on Wednesday, January 30, 2013, beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live and archived webcast at www.acegroup.com or by dialing 877-681-3375 (within the United States) or 719-325-4880 (international); passcode 3252473. Please refer to the ACE Group website in the Investor Information section under Calendar of Events for details. A replay of the call will be available until Wednesday, February 13, 2013 and the archived webcast will be available for approximately one month. To listen to the replay, please dial 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 3252473.
 
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The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at: www.acegroup.com .
 
(1)	All comparisons are with the same period last year unless specifically stated.	
 
(2)	Non-GAAP Financial Measures:	
Operating income or income excluding net realized gains (losses), net of tax is a common performance measurement for insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially-owned entities because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities.
Underwriting income (loss) is calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest and income tax expense and net realized gains (losses). Life underwriting income includes net investment income and gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under generally accepted accounting principles (GAAP). P&C underwriting income and consolidated underwriting income are non-GAAP financial measures. We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.
Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on net realized gains (losses). The denominator excludes net realized gains (losses), before tax.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses) is an annualized non-GAAP financial measure. The ROE numerator includes income adjusted to exclude net realized gains (losses), net of tax. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate, multiply by four. Annualized ROE calculated using income excluding realized gains (losses) is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.
Book value per common share is shareholders’ equity divided by the shares outstanding.
Tangible book value per common share is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.
See reconciliation of Non-GAAP Financial Measures on pages 21-22 in the Financial Supplement. These measures should not be viewed as a substitute for net income, return on equity, or effective tax rate determined in accordance with GAAP.
 
(3)	The book value amounts reflect the effects of new accounting guidance for deferred acquisition costs that is retrospectively applied to periods prior to January 1, 2012. Refer to the Financial Supplement page 1 for further detail.	
NM - not meaningful comparison
 
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Cautionary Statement Regarding Forward-Looking Statements :
Forward-looking statements made in this press release, such as those related to company performance and guidance, pricing and product mix, economic outlook and insurance market conditions, reflect our current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the following: competition, pricing and policy term trends, the levels of new and renewal business achieved, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and performance of acquired companies, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war, and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(tables to follow)
 
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ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)

 	  	December 31	 	  	December 31	 	
 	  	2012	 	  	2011	 	
Assets	  				  				
Investments	  	$	60,264	  	  	$	55,676	  	
Cash	  	 	615	  	  	 	614	  	
Insurance and reinsurance balances receivable	  	 	4,147	  	  	 	4,387	  	
Reinsurance recoverable on losses and loss expenses	  	 	12,078	  	  	 	12,389	  	
Other assets	  	 	15,441	  	  	 	14,255	  	
	  	 	 	 	  	 	 	 	
Total assets	  	$	92,545	  	  	$	87,321	  	
	  	 	 	 	  	 	 	 	
Liabilities	  				  				
Unpaid losses and loss expenses	  	$	37,946	  	  	$	37,477	  	
Unearned premiums	  	 	6,864	  	  	 	6,334	  	
Other liabilities	  	 	20,204	  	  	 	19,178	  	
	  	 	 	 	  	 	 	 	
Total liabilities	  	 	65,014	  	  	 	62,989	  	
	  	 	 	 	  	 	 	 	
Shareholders’ equity	  				  				
Total shareholders’ equity	  	 	27,531	  	  	 	24,332	  	
	  	 	 	 	  	 	 	 	
Total liabilities and shareholders’ equity	  	$	92,545	  	  	$	87,321	  	
	  	 	 	 	  	 	 	 	
Book value per common share (2) 	  	$ 	80.90 	  	  	$ 	72.22 	  	

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

 	  	Three Months Ended
December 31	 	 	Year Ended
December 31	 	
 	  	2012	 	 	2011	 	 	2012	 	 	2011	 	
Gross premiums written	  	$	5,146	  	 	$	4,864	  	 	$	21,593	  	 	$	20,831	  	
Net premiums written	  	 	3,657	  	 	 	3,630	  	 	 	16,075	  	 	 	15,372	  	
Net premiums earned	  	 	3,848	  	 	 	3,831	  	 	 	15,677	  	 	 	15,387	  	
Losses and loss expenses	  	 	2,683	  	 	 	2,286	  	 	 	9,653	  	 	 	9,520	  	
Policy benefits	  	 	142	  	 	 	119	  	 	 	521	  	 	 	401	  	
Policy acquisition costs	  	 	636	  	 	 	632	  	 	 	2,446	  	 	 	2,472	  	
Administrative expenses	  	 	553	  	 	 	531	  	 	 	2,096	  	 	 	2,068	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss) (2)	  	 	(166	) 	 	 	263	  	 	 	961	  	 	 	926	  	
Net investment income	  	 	567	  	 	 	565	  	 	 	2,181	  	 	 	2,242	  	
Net realized gains (losses)	  	 	272	  	 	 	83	  	 	 	78	  	 	 	(795	) 	
Interest expense	  	 	63	  	 	 	63	  	 	 	250	  	 	 	250	  	
Other income (expense):	  				 				 				 				
Gains (losses) from separate account assets (2)	  	 	11	  	 	 	3	  	 	 	29	  	 	 	(36	) 	
Other	  	 	9	  	 	 	4	  	 	 	(23	) 	 	 	(45	) 	
Income tax expense (benefit)	  	 	(135	) 	 	 	120	  	 	 	270	  	 	 	502	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	765	  	 	$	735	  	 	$	2,706	  	 	$	1,540	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share: 	  				 				 				 				
Income excluding net realized gains (losses) (2)	  	$	1.43	  	 	$	1.90	  	 	$	7.65	  	 	$	6.84	  	
Net income	  	$	2.22	  	 	$	2.15	  	 	$	7.89	  	 	$	4.52	  	
Weighted average diluted shares outstanding	  	 	343.7	  	 	 	341.0	  	 	 	342.7	  	 	 	340.8	  	
Loss and loss expense ratio	  	 	75.5	% 	 	 	63.4	% 	 	 	65.7	% 	 	 	66.0	% 	
Policy acquisition cost ratio	  	 	16.2	% 	 	 	16.3	% 	 	 	15.3	% 	 	 	15.8	% 	
Administrative expense ratio	  	 	13.8	% 	 	 	13.3	% 	 	 	12.9	% 	 	 	12.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	105.5	% 	 	 	93.0	% 	 	 	93.9	% 	 	 	94.7	% 	

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

 	  	Three Months Ended
December 31	 	 	Year Ended
December 31	 	
 	  	2012	 	 	2011	 	 	2012	 	 	2011	 	
Gross Premiums Written	  				 				 				 				
Insurance - North American	  	$	2,528	  	 	$	2,394	  	 	$	10,741	  	 	$	10,360	  	
Insurance - Overseas General	  	 	1,925	  	 	 	1,818	  	 	 	7,702	  	 	 	7,467	  	
Global Reinsurance	  	 	149	  	 	 	132	  	 	 	1,070	  	 	 	1,014	  	
Life	  	 	544	  	 	 	520	  	 	 	2,080	  	 	 	1,990	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	5,146	  	 	$	4,864	  	 	$	21,593	  	 	$	20,831	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Premiums Written	  				 				 				 				
Insurance - North American	  	$	1,518	  	 	$	1,624	  	 	$	7,208	  	 	$	6,851	  	
Insurance - Overseas General	  	 	1,476	  	 	 	1,378	  	 	 	5,863	  	 	 	5,629	  	
Global Reinsurance	  	 	146	  	 	 	132	  	 	 	1,025	  	 	 	979	  	
Life	  	 	517	  	 	 	496	  	 	 	1,979	  	 	 	1,913	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	3,657	  	 	$	3,630	  	 	$	16,075	  	 	$	15,372	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Premiums Earned	  				 				 				 				
Insurance - North American	  	$	1,608	  	 	$	1,662	  	 	$	7,019	  	 	$	6,911	  	
Insurance - Overseas General	  	 	1,497	  	 	 	1,450	  	 	 	5,740	  	 	 	5,614	  	
Global Reinsurance	  	 	254	  	 	 	249	  	 	 	1,002	  	 	 	1,003	  	
Life	  	 	489	  	 	 	470	  	 	 	1,916	  	 	 	1,859	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	3,848	  	 	$	3,831	  	 	$	15,677	  	 	$	15,387	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Excluding Net Realized Gains (Losses) (2) 	  				 				 				 				
Insurance - North American	  	$	170	  	 	$	342	  	 	$	1,062	  	 	$	1,177	  	
Insurance - Overseas General	  	 	246	  	 	 	169	  	 	 	994	  	 	 	691	  	
Global Reinsurance	  	 	74	  	 	 	125	  	 	 	499	  	 	 	401	  	
Life	  	 	74	  	 	 	79	  	 	 	324	  	 	 	315	  	
Corporate	  	 	(72	) 	 	 	(67	) 	 	 	(255	) 	 	 	(253	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	492	  	 	$	648	  	 	$	2,624	  	 	$	2,331	  	

Page 9/9

Exhibit 99.2

 

			
Investor Contact	  	This report is for informational purposes only. It should be read in conjunction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.	
Helen M. Wilson	  		
Phone: (441) 299-9283	  		
Fax: (441) 292-8675	  		
email: investorrelations@acegroup.com	  	Cautionary Statement Regarding Forward-Looking Statements:	
		
	  	Any forward-looking statements made in this financial supplement reflect ACE’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, our forward-looking statements, such as statements concerning exposures, reserves and recoverables, could be affected by the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable and credit developments among reinsurers.	
		
	  	Our forward-looking statements could also be affected by competition, pricing and policy term trends, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.	

			
	 	ACE Limited
Financial Supplement Table of Contents	

 	  	 	  	Page	 	
I.       Financial Highlights	  				
	  	- Consolidated Financial Highlights	  	 	1	  	
		
II.      Consolidated Results	  				
	  	- Consolidated Results—Consecutive Quarters	  	 	2	  	
	  	- Summary Consolidated Balance Sheets	  	 	3	  	
	  	- Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business	  	 	4-5	  	
		
III.    Segment Results	  				
	  	- Insurance—North American	  	 	6	  	
	  	- Insurance—Overseas General	  	 	7	  	
	  	- Global Reinsurance	  	 	8	  	
	  	- Life	  	 	9	  	
		
IV.    Balance Sheet Details	  				
	  	- Loss Reserve Rollforward	  	 	10	  	
	  	- Reinsurance Recoverable Analysis	  	 	11	  	
	  	- Investment Portfolio	  	 	12-17	  	
	  	- Net Realized and Unrealized Gains (Losses)	  	 	18	  	
	  	- Capital Structure	  	 	19	  	
	  	- Computation of Basic and Diluted Earnings Per Share	  	 	20	  	
		
V.      Other Disclosures	  				
	  	- Non-GAAP Financial Measures	  	 	21-22	  	
	  	- Book Value and Book Value per Common Share	  	 	23	  	
	  	- Glossary	  	 	24	  	

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

 	 	 	 	 	% Change
4Q-12 vs.
4Q-11	 	 	Constant $
2011 (2)	 	 	Constant $
%  Change
4Q-12 vs.
4Q-11 (2)	 	 	 	 	 	 	 	 	% Change
2012 vs.
2011	 	 	Constant $
2011 (2)	 	 	Constant $
%  Change
2012 vs.
2011 (2)	 	
 	 	Three months ended December 31	 	 			 			 			 	Year ended December 31	 	 			 			 			
 	 	2012	 	 	2011	 	 			 			 			 	2012	 	 	2011	 	 			 			 			
Gross premiums written	 	$	5,146	  	 	$	4,864	  	 	 	5.8	% 	 	$	4,848	  	 	 	6.1	% 	 	$	21,593	  	 	$	20,831	  	 	 	3.7	% 	 	$	20,580	  	 	 	4.9	% 	
Net premiums written	 	$	3,657	  	 	$	3,630	  	 	 	0.8	% 	 	$	3,617	  	 	 	1.1	% 	 	$	16,075	  	 	$	15,372	  	 	 	4.6	% 	 	$	15,160	  	 	 	6.0	% 	
Net premiums earned	 	$	3,848	  	 	$	3,831	  	 	 	0.5	% 	 	$	3,817	  	 	 	0.8	% 	 	$	15,677	  	 	$	15,387	  	 	 	1.9	% 	 	$	15,158	  	 	 	3.4	% 	
Net investment income	 	$	567	  	 	$	565	  	 	 	0.2	% 	 				 				 	$	2,181	  	 	$	2,242	  	 	 	-2.8	% 	 				 				
Net income	 	$	765	  	 	$	735	  	 	 	4.0	% 	 				 				 	$	2,706	  	 	$	1,540	  	 	 	75.6	% 	 				 				
Income excluding net realized gains (losses) (1)	 	$	492	  	 	$	648	  	 	 	-24.1	% 	 				 				 	$	2,624	  	 	$	2,331	  	 	 	12.5	% 	 				 				
Comprehensive income	 	$	638	  	 	$	807	  	 	 	-20.9	% 	 				 				 	$	3,682	  	 	$	1,857	  	 	 	98.3	% 	 				 				
Operating cash flow	 	$	970	  	 	$	472	  	 				 				 				 	$	3,995	  	 	$	3,470	  	 				 				 				
P&C combined ratio	 				 				 				 				 				 				 				 				 				 				
Loss and loss expense ratio	 	 	75.5	% 	 	 	63.4	% 	 				 				 				 	 	65.7	% 	 	 	66.0	% 	 				 				 				
Underwriting and administrative expense ratio	 	 	30.0	% 	 	 	29.6	% 	 				 				 				 	 	28.2	% 	 	 	28.7	% 	 				 				 				
	 	 	 	 	 	 	 	 	 				 				 				 	 	 	 	 	 	 	 	 				 				 				
Combined ratio	 	 	105.5	% 	 	 	93.0	% 	 				 				 				 	 	93.9	% 	 	 	94.7	% 	 				 				 				
Operating return on equity (ROE) (1)	 	 	8.0	% 	 	 	11.6	% 	 				 				 				 	 	11.0	% 	 	 	10.6	% 	 				 				 				
ROE	 	 	11.2	% 	 	 	12.3	% 	 				 				 				 	 	10.4	% 	 	 	6.5	% 	 				 				 				
Operating effective tax rate (1) (3)	 	 	-46.8	% 	 	 	14.4	% 	 				 				 				 	 	7.5	% 	 	 	17.1	% 	 				 				 				
Effective tax rate (3)	 	 	-21.4	% 	 	 	14.1	% 	 				 				 				 	 	9.1	% 	 	 	24.6	% 	 				 				 				
Diluted earnings per share	 				 				 				 				 				 				 				 				 				 				
Income excluding net realized gains (losses) (1)	 	$	1.43	  	 	$	1.90	  	 	 	-24.7	% 	 				 				 	$	7.65	  	 	$	6.84	  	 	 	11.8	% 	 				 				
Net income	 	$	2.22	  	 	$	2.15	  	 	 	3.3	% 	 				 				 	$	7.89	  	 	$	4.52	  	 	 	74.6	% 	 				 				
Book value per common share (1)	 				 				 				 				 				 	$	80.90	  	 	$	72.22	  	 	 	12.0	% 	 				 				
Tangible book value per common share  (1)	 				 				 				 				 				 	$	66.28	  	 	$	57.97	  	 	 	14.3	% 	 				 				
Weighted average basic common shares outstanding	 	 	340.8	  	 	 	338.3	  	 				 				 				 	 	339.8	  	 	 	338.2	  	 				 				 				
Weighted average diluted common shares outstanding	 	 	343.7	  	 	 	341.0	  	 				 				 				 	 	342.7	  	 	 	340.8	  	 				 				 				
Debt/total capitalization	 				 				 				 				 				 	 	14.6	% 	 	 	15.8	% 	 				 				 				
 
(1)	See Non-GAAP Financial Measures.	
(2)	Prior periods on a constant dollar basis.	
(3)	For Q4 2012, Operating effective tax rate and Effective tax rate include a $121 million tax benefit from the favorable resolution of prior years’ tax matters.	
Adoption of New Accounting Pronouncement:
Shareholders’ equity and book value per common share at December 31, 2011 and ROE percentages for the three months and year ended December 31, 2011 have been retrospectively adjusted to reflect the adoption of new guidance issued by the Financial Accounting Standards Board related to the accounting for costs associated with acquiring or renewing insurance contracts. The adoption of this guidance decreased shareholders’ equity by $181 million as of December 31, 2011. The effect of the adoption of the new guidance on net income for the three months and year ended December 31, 2011 was a decrease of $12 million and $42 million, respectively.
 
Page 1

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

																													
ACE Limited Consolidated	 	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Consolidated Results Excluding Life Segment	 				 				 				 				 				 				 				
Gross premiums written	 	$	4,602	  	 	$	5,496	  	 	$	5,140	  	 	$	4,275	  	 	$	4,344	  	 	$	19,513	  	 	$	18,841	  	
Net premiums written	 	 	3,140	  	 	 	4,228	  	 	 	3,644	  	 	 	3,084	  	 	 	3,134	  	 	 	14,096	  	 	 	13,459	  	
Net premiums earned	 	 	3,359	  	 	 	4,185	  	 	 	3,309	  	 	 	2,908	  	 	 	3,361	  	 	 	13,761	  	 	 	13,528	  	
Losses and loss expenses	 	 	2,535	  	 	 	2,883	  	 	 	1,968	  	 	 	1,656	  	 	 	2,132	  	 	 	9,042	  	 	 	8,927	  	
Policy acquisition costs	 	 	546	  	 	 	529	  	 	 	531	  	 	 	506	  	 	 	546	  	 	 	2,112	  	 	 	2,133	  	
Administrative expenses	 	 	462	  	 	 	438	  	 	 	436	  	 	 	432	  	 	 	447	  	 	 	1,768	  	 	 	1,751	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss) (1)	 	 	(184	) 	 	 	335	  	 	 	374	  	 	 	314	  	 	 	236	  	 	 	839	  	 	 	717	  	
Net investment income	 	 	502	  	 	 	470	  	 	 	475	  	 	 	483	  	 	 	505	  	 	 	1,930	  	 	 	2,016	  	
Net realized gains (losses)	 	 	83	  	 	 	11	  	 	 	27	  	 	 	29	  	 	 	76	  	 	 	150	  	 	 	11	  	
Interest expense	 	 	60	  	 	 	60	  	 	 	59	  	 	 	59	  	 	 	61	  	 	 	238	  	 	 	239	  	
Other income (expense)	 	 	20	  	 	 	3	  	 	 	(15	) 	 	 	(6	) 	 	 	3	  	 	 	2	  	 	 	(19	) 	
Income tax expense (benefit) (2)	 	 	(149	) 	 	 	133	  	 	 	129	  	 	 	99	  	 	 	111	  	 	 	212	  	 	 	452	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	510	  	 	 	626	  	 	 	673	  	 	 	662	  	 	 	648	  	 	 	2,471	  	 	 	2,034	  	
Net realized gains (losses)	 	 	83	  	 	 	11	  	 	 	27	  	 	 	29	  	 	 	76	  	 	 	150	  	 	 	11	  	
Net realized gains (losses) in other income (expense) (1) (3)	 	 	30	  	 	 	23	  	 	 	(1	) 	 	 	23	  	 	 	15	  	 	 	75	  	 	 	25	  	
Tax expense on net realized gains (losses)	 	 	21	  	 	 	9	  	 	 	17	  	 	 	7	  	 	 	12	  	 	 	54	  	 	 	18	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	 	 	418	  	 	 	601	  	 	 	664	  	 	 	617	  	 	 	569	  	 	 	2,300	  	 	 	2,016	  	
Life segment income excluding net realized gains (losses) (1)	 	 	74	  	 	 	87	  	 	 	79	  	 	 	84	  	 	 	79	  	 	 	324	  	 	 	315	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated income excluding net realized gains (losses) (1)	 	$	492	  	 	$	688	  	 	$	743	  	 	$	701	  	 	$	648	  	 	$	2,624	  	 	$	2,331	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period (4) 	 				 				 				 				 				 				 				
Net premiums written as reported	 	 	0.3	% 	 	 	9.6	% 	 	 	5.3	% 	 	 	2.5	% 	 	 	4.9	% 	 	 	4.7	% 	 	 	11.6	% 	
Net premiums earned as reported	 	 	-0.1	% 	 	 	4.4	% 	 	 	1.1	% 	 	 	0.8	% 	 	 	6.4	% 	 	 	1.7	% 	 	 	13.9	% 	
Net premiums written constant $	 	 	0.7	% 	 				 				 				 				 	 	6.3	% 	 				
Net premiums earned constant $	 	 	0.4	% 	 				 				 				 				 	 	3.3	% 	 				
Other ratios	 				 				 				 				 				 				 				
Net premiums written/gross premiums written	 	 	68	% 	 	 	77	% 	 	 	71	% 	 	 	72	% 	 	 	72	% 	 	 	72	% 	 	 	71	% 	
Operating effective tax rate (1)	 	 	-46.8	% 	 	 	16.7	% 	 	 	14.6	% 	 	 	13.0	% 	 	 	14.4	% 	 	 	7.5	% 	 	 	17.1	% 	
P&C combined ratio (4) 	 				 				 				 				 				 				 				
Loss and loss expense ratio	 	 	75.5	% 	 	 	68.9	% 	 	 	59.5	% 	 	 	56.9	% 	 	 	63.4	% 	 	 	65.7	% 	 	 	66.0	% 	
Policy acquisition cost ratio	 	 	16.2	% 	 	 	12.7	% 	 	 	16.1	% 	 	 	17.4	% 	 	 	16.3	% 	 	 	15.3	% 	 	 	15.8	% 	
Administrative expense ratio	 	 	13.8	% 	 	 	10.4	% 	 	 	13.1	% 	 	 	14.9	% 	 	 	13.3	% 	 	 	12.9	% 	 	 	12.9	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	 	 	105.5	% 	 	 	92.0	% 	 	 	88.7	% 	 	 	89.2	% 	 	 	93.0	% 	 	 	93.9	% 	 	 	94.7	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding catastrophe losses and PPD (1) (5)	 	 	91.4	% 	 	 	96.5	% 	 	 	90.4	% 	 	 	91.7	% 	 	 	92.0	% 	 	 	92.8	% 	 	 	92.2	% 	
Combined ratio excluding catastrophe losses, PPD, and crop (1) (5)	 	 	90.9	% 	 	 	90.5	% 	 				 				 	 	92.9	% 	 	 	91.2	% 	 	 	92.7	% 	
P&C expense ratio	 	 	30.0	% 	 	 	23.1	% 	 	 	29.2	% 	 	 	32.3	% 	 	 	29.6	% 	 	 	28.2	% 	 	 	28.7	% 	
P&C expense ratio excluding A&H	 	 	26.2	% 	 	 	19.3	% 	 	 	25.3	% 	 	 	28.4	% 	 	 	25.5	% 	 	 	24.3	% 	 	 	24.7	% 	
Large losses and other items (before tax) (4) 	 				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	 	$	(7	) 	 	$	2	  	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	(5	) 	 	$	(40	) 	
Catastrophe losses	 	$	504	  	 	$	55	  	 	$	55	  	 	$	19	  	 	$	155	  	 	$	633	  	 	$	859	  	
Favorable prior period development (PPD) - net of asbestos and environmental (5)	 	$	(37	) 	 	$	(236	) 	 	$	(113	) 	 	$	(93	) 	 	$	(123	) 	 	$	(479	) 	 	$	(556	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1) (5)	 	 	61.4	% 	 	 	73.4	% 	 	 	61.2	% 	 	 	59.5	% 	 	 	62.5	% 	 	 	64.6	% 	 	 	63.6	% 	
 
(1)	See Non-GAAP Financial Measures.	
(2)	For Q4 2012, Income tax expense (benefit) includes a $121 million benefit from the favorable resolution of prior years’ tax matters included in the following segments: $63 million in Insurance – Overseas General, $56 million in Insurance – North American, and $2 million in Global Re.	
(3)	Net realized investment and derivative losses related to unconsolidated entities.	
(4)	Presented excluding the Life segment. This is a non-GAAP measure.	
(5)	For Q4 2012, favorable prior period development includes approximately $140 million of reserve charges for asbestos and environmental and other run-off business. For Q3 2012, favorable prior period development is net of $32 million of net earned premium adjustments on loss sensitive policies.	
 
Page 2

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

 	  	December 31
2012	 	 	September 30
2012	 	 	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	
Assets	  				 				 				 				 				
Fixed maturities available for sale, at fair value	  	$	47,306	  	 	$	46,504	  	 	$	44,386	  	 	$	43,468	  	 	$	41,967	  	
Fixed maturities held to maturity, at amortized cost	  	 	7,270	  	 	 	7,493	  	 	 	7,782	  	 	 	8,117	  	 	 	8,447	  	
Equity securities, at fair value	  	 	744	  	 	 	770	  	 	 	729	  	 	 	679	  	 	 	647	  	
Short-term investments, at fair value	  	 	2,228	  	 	 	2,429	  	 	 	2,260	  	 	 	2,099	  	 	 	2,301	  	
Other investments	  	 	2,716	  	 	 	2,621	  	 	 	2,524	  	 	 	2,429	  	 	 	2,314	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments	  	 	60,264	  	 	 	59,817	  	 	 	57,681	  	 	 	56,792	  	 	 	55,676	  	
Cash	  	 	615	  	 	 	690	  	 	 	617	  	 	 	715	  	 	 	614	  	
Securities lending collateral	  	 	1,791	  	 	 	2,039	  	 	 	2,247	  	 	 	2,204	  	 	 	1,375	  	
Insurance and reinsurance balances receivable	  	 	4,147	  	 	 	5,288	  	 	 	4,985	  	 	 	4,487	  	 	 	4,387	  	
Reinsurance recoverable on losses and loss expenses	  	 	12,078	  	 	 	11,857	  	 	 	11,752	  	 	 	12,057	  	 	 	12,389	  	
Deferred policy acquisition costs	  	 	1,873	  	 	 	1,793	  	 	 	1,710	  	 	 	1,649	  	 	 	1,548	  	
Value of business acquired	  	 	614	  	 	 	632	  	 	 	637	  	 	 	669	  	 	 	676	  	
Prepaid reinsurance premiums	  	 	1,617	  	 	 	1,613	  	 	 	1,775	  	 	 	1,643	  	 	 	1,541	  	
Goodwill and other intangible assets	  	 	4,975	  	 	 	4,990	  	 	 	4,826	  	 	 	4,860	  	 	 	4,799	  	
Deferred tax assets	  	 	453	  	 	 	344	  	 	 	557	  	 	 	568	  	 	 	673	  	
Investments in partially-owned insurance companies	  	 	454	  	 	 	354	  	 	 	339	  	 	 	346	  	 	 	352	  	
Other assets	  	 	3,664	  	 	 	4,091	  	 	 	3,575	  	 	 	3,759	  	 	 	3,291	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	92,545	  	 	$	93,508	  	 	$	90,701	  	 	$	89,749	  	 	$	87,321	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	  				 				 				 				 				
Unpaid losses and loss expenses	  	$	37,946	  	 	$	38,200	  	 	$	36,850	  	 	$	37,247	  	 	$	37,477	  	
Unearned premiums	  	 	6,864	  	 	 	7,068	  	 	 	7,044	  	 	 	6,664	  	 	 	6,334	  	
Future policy benefits	  	 	4,470	  	 	 	4,414	  	 	 	4,436	  	 	 	4,358	  	 	 	4,274	  	
Insurance and reinsurance balances payable	  	 	3,472	  	 	 	3,448	  	 	 	3,490	  	 	 	3,454	  	 	 	3,542	  	
Securities lending payable	  	 	1,795	  	 	 	2,044	  	 	 	2,253	  	 	 	2,211	  	 	 	1,385	  	
Accounts payable, accrued expenses, and other liabilities	  	 	5,397	  	 	 	6,300	  	 	 	5,796	  	 	 	5,184	  	 	 	5,057	  	
Short-term debt	  	 	1,401	  	 	 	1,402	  	 	 	1,401	  	 	 	1,531	  	 	 	1,251	  	
Long-term debt	  	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,360	  	
Trust preferred securities	  	 	309	  	 	 	309	  	 	 	309	  	 	 	309	  	 	 	309	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	  	 	65,014	  	 	 	66,545	  	 	 	64,939	  	 	 	64,318	  	 	 	62,989	  	
Shareholders’ equity	  				 				 				 				 				
Total shareholders’ equity, excl. AOCI	  	 	24,644	  	 	 	23,949	  	 	 	23,424	  	 	 	23,222	  	 	 	22,421	  	
Accumulated other comprehensive income (AOCI)	  	 	2,887	  	 	 	3,014	  	 	 	2,338	  	 	 	2,209	  	 	 	1,911	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	27,531	  	 	 	26,963	  	 	 	25,762	  	 	 	25,431	  	 	 	24,332	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	92,545	  	 	$	93,508	  	 	$	90,701	  	 	$	89,749	  	 	$	87,321	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Book value per common share (1) 	  	$	80.90	  	 	$	79.36	  	 	$	75.98	  	 	$	75.09	  	 	$	72.22	  	
% change over prior quarter	  	 	1.9	% 	 	 	4.4	% 	 	 	1.2	% 	 	 	4.0	% 	 	 	3.0	% 	
Tangible book value per common share (1) 	  	$	66.28	  	 	$	64.67	  	 	$	61.75	  	 	$	60.74	  	 	$	57.97	  	
% change over prior quarter	  	 	2.5	% 	 	 	4.7	% 	 	 	1.7	% 	 	 	4.8	% 	 	 	3.7	% 	
(1) See Non-GAAP Financial Measures.
 
Page 3

			
	 	ACE Limited
Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business
(in millions of U.S. dollars)
(Unaudited)	
ACE Limited Consolidated

   	 	4Q-12	 	 	% of
Total
Consolidated	 	 	4Q-11	 	 	% of
Total
Consolidated	 	 	% Change
4Q-12 vs.
4Q-11	 	 	Full
Year
2012	 	 	% of
Total
Consolidated	 	 	Full
Year
2011	 	 	% of
Total
Consolidated	 	 	% Change
YTD-12 vs.
YTD-11	 	
Net premiums written	 				 				 				 				 				 				 				 				 				 				
Property and all other	 	$	939	  	 	 	26	% 	 	$	849	  	 	 	24	% 	 	 	10.6	% 	 	$	4,240	  	 	 	26	% 	 	$	3,808	  	 	 	25	% 	 	 	11.3	% 	
Agriculture	 	 	84	  	 	 	2	% 	 	 	272	  	 	 	7	% 	 	 	-69.2	% 	 	 	1,859	  	 	 	12	% 	 	 	1,951	  	 	 	12	% 	 	 	-4.7	% 	
Casualty	 	 	1,475	  	 	 	40	% 	 	 	1,393	  	 	 	38	% 	 	 	5.9	% 	 	 	5,476	  	 	 	34	% 	 	 	5,210	  	 	 	34	% 	 	 	5.1	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Subtotal	 	 	2,498	  	 	 	68	% 	 	 	2,514	  	 	 	69	% 	 	 	-0.6	% 	 	 	11,575	  	 	 	72	% 	 	 	10,969	  	 	 	71	% 	 	 	5.5	% 	
Personal accident (A&H) (1)	 	 	911	  	 	 	25	% 	 	 	874	  	 	 	24	% 	 	 	4.3	% 	 	 	3,532	  	 	 	22	% 	 	 	3,486	  	 	 	23	% 	 	 	1.3	% 	
Life	 	 	248	  	 	 	7	% 	 	 	242	  	 	 	7	% 	 	 	2.5	% 	 	 	968	  	 	 	6	% 	 	 	917	  	 	 	6	% 	 	 	5.6	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	3,657	  	 	 	100	% 	 	$	3,630	  	 	 	100	% 	 	 	0.8	% 	 	$	16,075	  	 	 	100	% 	 	$	15,372	  	 	 	100	% 	 	 	4.6	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Net premiums earned	 				 				 				 				 				 				 				 				 				 				
Property and all other	 	$	1,087	  	 	 	28	% 	 	$	1,009	  	 	 	27	% 	 	 	7.7	% 	 	$	4,101	  	 	 	26	% 	 	$	3,770	  	 	 	24	% 	 	 	8.8	% 	
Agriculture	 	 	263	  	 	 	7	% 	 	 	428	  	 	 	11	% 	 	 	-38.6	% 	 	 	1,872	  	 	 	12	% 	 	 	1,942	  	 	 	13	% 	 	 	-3.6	% 	
Casualty	 	 	1,367	  	 	 	36	% 	 	 	1,304	  	 	 	34	% 	 	 	4.8	% 	 	 	5,292	  	 	 	34	% 	 	 	5,340	  	 	 	35	% 	 	 	-0.9	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Subtotal	 	 	2,717	  	 	 	71	% 	 	 	2,741	  	 	 	72	% 	 	 	-0.9	% 	 	 	11,265	  	 	 	72	% 	 	 	11,052	  	 	 	72	% 	 	 	1.9	% 	
Personal accident (A&H) (1)	 	 	894	  	 	 	23	% 	 	 	866	  	 	 	22	% 	 	 	3.1	% 	 	 	3,499	  	 	 	22	% 	 	 	3,471	  	 	 	23	% 	 	 	0.8	% 	
Life	 	 	237	  	 	 	6	% 	 	 	224	  	 	 	6	% 	 	 	5.8	% 	 	 	913	  	 	 	6	% 	 	 	864	  	 	 	5	% 	 	 	5.7	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	3,848	  	 	 	100	% 	 	$	3,831	  	 	 	100	% 	 	 	0.5	% 	 	$	15,677	  	 	 	100	% 	 	$	15,387	  	 	 	100	% 	 	 	1.9	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Income excluding net realized gains (losses)	 				 				 				 				 				 				 				 				 				 				
Property, casualty, and all other	 	$	314	  	 	 	64	% 	 	$	437	  	 	 	67	% 	 	 	-28.1	% 	 	$	1,998	  	 	 	76	% 	 	$	1,590	  	 	 	68	% 	 	 	25.7	% 	
Agriculture	 	 	(1	) 	 	 	0	% 	 	 	46	  	 	 	7	% 	 	 	NM	  	 	 	(38	) 	 	 	-1	% 	 	 	120	  	 	 	5	% 	 	 	NM	  	
Personal accident (A&H) (1)	 	 	141	  	 	 	28	% 	 	 	122	  	 	 	19	% 	 	 	15.6	% 	 	 	498	  	 	 	19	% 	 	 	463	  	 	 	20	% 	 	 	7.6	% 	
Life	 	 	38	  	 	 	8	% 	 	 	43	  	 	 	7	% 	 	 	-11.6	% 	 	 	166	  	 	 	6	% 	 	 	158	  	 	 	7	% 	 	 	5.1	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	492	  	 	 	100	% 	 	$	648	  	 	 	100	% 	 	 	-24.1	% 	 	$	2,624	  	 	 	100	% 	 	$	2,331	  	 	 	100	% 	 	 	12.5	% 	

(1)	For purposes of this schedule only, A&H results from our Combined North American and International businesses, normally included in the Life and Insurance-Overseas General segments, respectively, are included in the Personal Accident (A&H) line items above.	
 
Page 4

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

   	  	 	 	  	 	 	  	Constant $
% Change
4Q-12 vs.
4Q-11 (2)	 	 	Full  Year
2012	 	  	Constant $
Full Year
2011 (2)	 	  	Constant $
% Change
2012 vs.
2011 (2)	 	
   	  	4Q-12	 	  	Constant $
4Q-11 (2)	 	  			 			  			  			
Net premiums written	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	2,498	  	  	$	2,501	  	  	 	-0.1	% 	 	$	11,575	  	  	$	10,849	  	  	 	6.7	% 	
Personal accident (A&H) (1)	  	 	911	  	  	 	873	  	  	 	4.4	% 	 	 	3,532	  	  	 	3,411	  	  	 	3.6	% 	
Life	  	 	248	  	  	 	243	  	  	 	2.1	% 	 	 	968	  	  	 	900	  	  	 	7.6	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	3,657	  	  	$	3,617	  	  	 	1.1	% 	 	$	16,075	  	  	$	15,160	  	  	 	6.0	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Net premiums earned	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	2,717	  	  	$	2,728	  	  	 	-0.4	% 	 	$	11,265	  	  	$	10,918	  	  	 	3.2	% 	
Personal accident (A&H) (1)	  	 	894	  	  	 	865	  	  	 	3.4	% 	 	 	3,499	  	  	 	3,392	  	  	 	3.2	% 	
Life	  	 	237	  	  	 	224	  	  	 	5.8	% 	 	 	913	  	  	 	848	  	  	 	7.7	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	3,848	  	  	$	3,817	  	  	 	0.8	% 	 	$	15,677	  	  	$	15,158	  	  	 	3.4	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Income excluding net realized gains (losses)	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	313	  	  	$	483	  	  	 	-35.2	% 	 	$	1,960	  	  	$	1,679	  	  	 	16.7	% 	
Personal accident (A&H) (1)	  	 	141	  	  	 	121	  	  	 	16.5	% 	 	 	498	  	  	 	451	  	  	 	10.4	% 	
Life	  	 	38	  	  	 	44	  	  	 	-13.6	% 	 	 	166	  	  	 	159	  	  	 	4.4	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	492	  	  	$	648	  	  	 	-24.1	% 	 	$	2,624	  	  	$	2,289	  	  	 	14.6	% 	

(1)	For purposes of this schedule only, A&H results from our Combined North American and International businesses, normally included in the Life and Insurance-Overseas General segments, respectively, are included in the Personal Accident (A&H) line items above.	
(2)	Prior periods on a constant dollar basis.	
 
Page 5

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

 	  	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Gross premiums written	  	$	2,528	  	 	$	3,345	  	 	$	2,856	  	 	$	2,012	  	 	$	2,394	  	 	$	10,741	  	 	$	10,360	  	
Net premiums written	  	 	1,518	  	 	 	2,537	  	 	 	1,860	  	 	 	1,293	  	 	 	1,624	  	 	 	7,208	  	 	 	6,851	  	
Net premiums earned	  	 	1,608	  	 	 	2,472	  	 	 	1,652	  	 	 	1,287	  	 	 	1,662	  	 	 	7,019	  	 	 	6,911	  	
Losses and loss expenses	  	 	1,504	  	 	 	2,110	  	 	 	1,163	  	 	 	849	  	 	 	1,211	  	 	 	5,626	  	 	 	5,276	  	
Policy acquisition costs	  	 	142	  	 	 	160	  	 	 	157	  	 	 	127	  	 	 	157	  	 	 	586	  	 	 	612	  	
Administrative expenses	  	 	153	  	 	 	148	  	 	 	153	  	 	 	147	  	 	 	144	  	 	 	601	  	 	 	592	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	(191	) 	 	 	54	  	 	 	179	  	 	 	164	  	 	 	150	  	 	 	206	  	 	 	431	  	
Net investment income	  	 	283	  	 	 	263	  	 	 	271	  	 	 	274	  	 	 	284	  	 	 	1,091	  	 	 	1,170	  	
Net realized gains (losses)	  	 	26	  	 	 	(1	) 	 	 	18	  	 	 	(1	) 	 	 	26	  	 	 	42	  	 	 	34	  	
Interest expense	  	 	3	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	4	  	 	 	12	  	 	 	15	  	
Other income (expense)	  	 	13	  	 	 	5	  	 	 	(10	) 	 	 	1	  	 	 	3	  	 	 	9	  	 	 	(5	) 	
Income tax expense (benefit) (1)	  	 	(79	) 	 	 	81	  	 	 	107	  	 	 	91	  	 	 	91	  	 	 	200	  	 	 	395	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	207	  	 	 	237	  	 	 	348	  	 	 	344	  	 	 	368	  	 	 	1,136	  	 	 	1,220	  	
Net realized gains (losses)	  	 	26	  	 	 	(1	) 	 	 	18	  	 	 	(1	) 	 	 	26	  	 	 	42	  	 	 	34	  	
Net realized gains (losses) in other income (expense)	  	 	21	  	 	 	17	  	 	 	5	  	 	 	15	  	 	 	10	  	 	 	58	  	 	 	28	  	
Tax expense on net realized gains (losses)	  	 	10	  	 	 	2	  	 	 	10	  	 	 	4	  	 	 	10	  	 	 	26	  	 	 	19	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (2)	  	$	170	  	 	$	223	  	 	$	335	  	 	$	334	  	 	$	342	  	 	$	1,062	  	 	$	1,177	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	93.6	% 	 	 	85.3	% 	 	 	70.4	% 	 	 	66.0	% 	 	 	72.8	% 	 	 	80.2	% 	 	 	76.3	% 	
Policy acquisition cost ratio	  	 	8.8	% 	 	 	6.5	% 	 	 	9.5	% 	 	 	9.9	% 	 	 	9.5	% 	 	 	8.3	% 	 	 	8.9	% 	
Administrative expense ratio	  	 	9.5	% 	 	 	6.0	% 	 	 	9.3	% 	 	 	11.4	% 	 	 	8.7	% 	 	 	8.6	% 	 	 	8.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	111.9	% 	 	 	97.8	% 	 	 	89.2	% 	 	 	87.3	% 	 	 	91.0	% 	 	 	97.1	% 	 	 	93.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio excluding catastrophe losses, PPD, and crop (2) (3)	  	 	88.5	% 	 	 	88.9	% 	 				 				 	 	91.9	% 	 	 	90.1	% 	 	 	92.3	% 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	(8	) 	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	(8	) 	 	$	(5	) 	
Catastrophe losses	  	$	338	  	 	$	38	  	 	$	49	  	 	$	16	  	 	$	42	  	 	$	441	  	 	$	347	  	
Unfavorable (favorable) prior period development (PPD)—net of A&E (3)	  	$	7	  	 	$	(80	) 	 	$	(59	) 	 	$	(60	) 	 	$	(31	) 	 	$	(192	) 	 	$	(195	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (2) (3)	  	 	71.8	% 	 	 	87.2	% 	 	 	71.1	% 	 	 	69.3	% 	 	 	72.2	% 	 	 	76.6	% 	 	 	74.1	% 	
% Change versus prior year period	  				 				 				 				 				 				 				
Net premiums written	  	 	-6.5	% 	 	 	14.9	% 	 	 	7.2	% 	 	 	0.6	% 	 	 	6.9	% 	 	 	5.2	% 	 	 	18.2	% 	
Net premiums earned	  	 	-3.2	% 	 	 	7.5	% 	 	 	3.0	% 	 	 	-4.4	% 	 	 	10.0	% 	 	 	1.6	% 	 	 	22.3	% 	
Net premiums written excluding crop	  	 	6.9	% 	 	 	27.4	% 	 	 	17.2	% 	 	 	1.9	% 	 	 	1.0	% 	 	 	13.1	% 	 	 	-8.8	% 	
Net premiums earned excluding crop	  	 	11.3	% 	 	 	15.2	% 	 	 	6.1	% 	 	 	-2.0	% 	 	 	-12.6	% 	 	 	7.6	% 	 	 	-5.4	% 	
Other ratios	  				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	60	% 	 	 	76	% 	 	 	65	% 	 	 	64	% 	 	 	68	% 	 	 	67	% 	 	 	66	% 	
 
(1)	For Q4 2012, Income tax expense (benefit) includes a $56 million benefit from the favorable resolution of prior years’ tax matters.	
(2)	See Non-GAAP Financial Measures.	
(3)	For Q4 2012, favorable prior period development includes approximately $140 million of reserve charges for asbestos and environmental and other run-off business. For Q3 2012, favorable prior period development is net of $28 million of net earned premium adjustments on loss sensitive policies.	
 
Page 6

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

   	  	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Gross premiums written	  	$	1,925	  	 	$	1,841	  	 	$	1,952	  	 	$	1,984	  	 	$	1,818	  	 	$	7,702	  	 	$	7,467	  	
Net premiums written	  	 	1,476	  	 	 	1,384	  	 	 	1,475	  	 	 	1,528	  	 	 	1,378	  	 	 	5,863	  	 	 	5,629	  	
Net premiums earned	  	 	1,497	  	 	 	1,432	  	 	 	1,420	  	 	 	1,391	  	 	 	1,450	  	 	 	5,740	  	 	 	5,614	  	
Losses and loss expenses	  	 	832	  	 	 	622	  	 	 	703	  	 	 	705	  	 	 	785	  	 	 	2,862	  	 	 	3,029	  	
Policy acquisition costs	  	 	357	  	 	 	329	  	 	 	332	  	 	 	335	  	 	 	346	  	 	 	1,353	  	 	 	1,335	  	
Administrative expenses	  	 	239	  	 	 	234	  	 	 	233	  	 	 	229	  	 	 	241	  	 	 	935	  	 	 	939	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income	  	 	69	  	 	 	247	  	 	 	152	  	 	 	122	  	 	 	78	  	 	 	590	  	 	 	311	  	
Net investment income	  	 	135	  	 	 	127	  	 	 	128	  	 	 	131	  	 	 	140	  	 	 	521	  	 	 	546	  	
Net realized gains (losses)	  	 	44	  	 	 	13	  	 	 	26	  	 	 	20	  	 	 	51	  	 	 	103	  	 	 	33	  	
Interest expense	  	 	1	  	 	 	2	  	 	 	1	  	 	 	1	  	 	 	1	  	 	 	5	  	 	 	5	  	
Other income (expense)	  	 	—  	  	 	 	3	  	 	 	(6	) 	 	 	—  	  	 	 	3	  	 	 	(3	) 	 	 	—  	  	
Income tax expense (benefit) (1)	  	 	(33	) 	 	 	77	  	 	 	51	  	 	 	38	  	 	 	52	  	 	 	133	  	 	 	164	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	280	  	 	 	311	  	 	 	248	  	 	 	234	  	 	 	219	  	 	 	1,073	  	 	 	721	  	
Net realized gains (losses)	  	 	44	  	 	 	13	  	 	 	26	  	 	 	20	  	 	 	51	  	 	 	103	  	 	 	33	  	
Net realized gains (losses) in other income (expense)	  	 	1	  	 	 	2	  	 	 	(3	) 	 	 	3	  	 	 	2	  	 	 	3	  	 	 	(2	) 	
Tax expense on net realized gains (losses)	  	 	11	  	 	 	6	  	 	 	7	  	 	 	3	  	 	 	3	  	 	 	27	  	 	 	1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (2)	  	$	246	  	 	$	302	  	 	$	232	  	 	$	214	  	 	$	169	  	 	$	994	  	 	$	691	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	55.5	% 	 	 	43.4	% 	 	 	49.6	% 	 	 	50.7	% 	 	 	54.1	% 	 	 	49.8	% 	 	 	54.0	% 	
Policy acquisition cost ratio	  	 	23.8	% 	 	 	23.1	% 	 	 	23.4	% 	 	 	24.1	% 	 	 	23.8	% 	 	 	23.6	% 	 	 	23.8	% 	
Administrative expense ratio	  	 	16.1	% 	 	 	16.2	% 	 	 	16.3	% 	 	 	16.4	% 	 	 	16.6	% 	 	 	16.3	% 	 	 	16.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	95.4	% 	 	 	82.7	% 	 	 	89.3	% 	 	 	91.2	% 	 	 	94.5	% 	 	 	89.7	% 	 	 	94.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	(8	) 	 	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	1	  	 	$	(8	) 	 	$	(42	) 	
Catastrophe losses	  	$	65	  	 	$	4	  	 	$	5	  	 	$	2	  	 	$	98	  	 	$	76	  	 	$	329	  	
Favorable prior period development (PPD)	  	$	(30	) 	 	$	(135	) 	 	$	(39	) 	 	$	(22	) 	 	$	(80	) 	 	$	(226	) 	 	$	(290	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (2)	  	 	52.9	% 	 	 	52.6	% 	 	 	51.9	% 	 	 	52.1	% 	 	 	53.0	% 	 	 	52.4	% 	 	 	52.9	% 	
% Change versus prior year period	  				 				 				 				 				 				 				
Net premiums written as reported	  	 	7.1	% 	 	 	-1.0	% 	 	 	2.2	% 	 	 	8.4	% 	 	 	3.9	% 	 	 	4.2	% 	 	 	8.5	% 	
Net premiums earned as reported	  	 	3.2	% 	 	 	-2.6	% 	 	 	0.3	% 	 	 	8.8	% 	 	 	5.1	% 	 	 	2.2	% 	 	 	9.0	% 	
Net premiums written constant $	  	 	8.5	% 	 				 				 				 				 	 	7.7	% 	 				
Net premiums earned constant $	  	 	4.4	% 	 				 				 				 				 	 	6.0	% 	 				
Other ratios	  				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	77	% 	 	 	75	% 	 	 	76	% 	 	 	77	% 	 	 	76	% 	 	 	76	% 	 	 	75	% 	
 
(1)	For Q4 2012, Income tax expense (benefit) includes a $63 million benefit from the favorable resolution of prior years’ tax matters.	
(2)	See Non-GAAP Financial Measures.	
 
Page 7

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

   	  	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Gross premiums written	  	$	149	  	 	$	310	  	 	$	332	  	 	$	279	  	 	$	132	  	 	$	1,070	  	 	$	1,014	  	
Net premiums written	  	 	146	  	 	 	307	  	 	 	309	  	 	 	263	  	 	 	132	  	 	 	1,025	  	 	 	979	  	
Net premiums earned	  	 	254	  	 	 	281	  	 	 	237	  	 	 	230	  	 	 	249	  	 	 	1,002	  	 	 	1,003	  	
Losses and loss expenses	  	 	198	  	 	 	151	  	 	 	102	  	 	 	102	  	 	 	136	  	 	 	553	  	 	 	621	  	
Policy acquisition costs	  	 	47	  	 	 	40	  	 	 	42	  	 	 	43	  	 	 	42	  	 	 	172	  	 	 	185	  	
Administrative expenses	  	 	13	  	 	 	13	  	 	 	13	  	 	 	12	  	 	 	14	  	 	 	51	  	 	 	52	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (loss)	  	 	(4	) 	 	 	77	  	 	 	80	  	 	 	73	  	 	 	57	  	 	 	226	  	 	 	145	  	
Net investment income	  	 	77	  	 	 	72	  	 	 	70	  	 	 	71	  	 	 	74	  	 	 	290	  	 	 	287	  	
Net realized gains (losses)	  	 	12	  	 	 	(2	) 	 	 	(17	) 	 	 	13	  	 	 	6	  	 	 	6	  	 	 	(50	) 	
Interest expense	  	 	1	  	 	 	1	  	 	 	1	  	 	 	1	  	 	 	1	  	 	 	4	  	 	 	2	  	
Other income (expense)	  	 	8	  	 	 	5	  	 	 	(3	) 	 	 	5	  	 	 	3	  	 	 	15	  	 	 	1	  	
Income tax expense (benefit) (1)	  	 	(2	) 	 	 	11	  	 	 	—  	  	 	 	6	  	 	 	5	  	 	 	15	  	 	 	30	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	94	  	 	 	140	  	 	 	129	  	 	 	155	  	 	 	134	  	 	 	518	  	 	 	351	  	
Net realized gains (losses)	  	 	12	  	 	 	(2	) 	 	 	(17	) 	 	 	13	  	 	 	6	  	 	 	6	  	 	 	(50	) 	
Net realized gains (losses) in other income (expense)	  	 	8	  	 	 	4	  	 	 	(3	) 	 	 	5	  	 	 	3	  	 	 	14	  	 	 	(1	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	—  	  	 	 	1	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1	  	 	 	(1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (2)	  	$	74	  	 	$	139	  	 	$	149	  	 	$	137	  	 	$	125	  	 	$	499	  	 	$	401	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	78.2	% 	 	 	53.9	% 	 	 	42.5	% 	 	 	44.4	% 	 	 	54.8	% 	 	 	55.2	% 	 	 	62.0	% 	
Policy acquisition cost ratio	  	 	18.3	% 	 	 	14.1	% 	 	 	17.8	% 	 	 	18.7	% 	 	 	17.0	% 	 	 	17.1	% 	 	 	18.4	% 	
Administrative expense ratio	  	 	5.2	% 	 	 	4.7	% 	 	 	5.8	% 	 	 	5.2	% 	 	 	5.3	% 	 	 	5.2	% 	 	 	5.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	101.7	% 	 	 	72.7	% 	 	 	66.1	% 	 	 	68.3	% 	 	 	77.1	% 	 	 	77.5	% 	 	 	85.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	9	  	 	$	2	  	 	$	—  	  	 	$	—  	  	 	$	(1	) 	 	$	11	  	 	$	7	  	
Catastrophe losses	  	$	101	  	 	$	13	  	 	$	1	  	 	$	1	  	 	$	15	  	 	$	116	  	 	$	183	  	
Favorable prior period development (PPD) (3)	  	$	(14	) 	 	$	(21	) 	 	$	(15	) 	 	$	(11	) 	 	$	(12	) 	 	$	(61	) 	 	$	(71	) 	
Loss and loss expense ratio excluding catastrophe losses and
PPD (2) (3)	  	 	45.6	% 	 	 	57.7	% 	 	 	48.3	% 	 	 	48.7	% 	 	 	53.2	% 	 	 	50.4	% 	 	 	51.7	% 	
% Change versus prior year period	  				 				 				 				 				 				 				
Net premiums written as reported	  	 	12.0	% 	 	 	22.2	% 	 	 	9.4	% 	 	 	-16.5	% 	 	 	-7.7	% 	 	 	4.7	% 	 	 	-8.9	% 	
Net premiums earned as reported	  	 	2.3	% 	 	 	16.8	% 	 	 	-6.5	% 	 	 	-11.5	% 	 	 	-7.1	% 	 	 	0.0	% 	 	 	-6.3	% 	
Net premiums written constant $	  	 	12.0	% 	 				 				 				 				 	 	5.3	% 	 				
Net premiums earned constant $	  	 	2.4	% 	 				 				 				 				 	 	0.4	% 	 				
Other ratios	  				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	99	% 	 	 	99	% 	 	 	93	% 	 	 	94	% 	 	 	100	% 	 	 	96	% 	 	 	97	% 	
 
(1)	For Q4 2012, income tax expense (benefit) includes a $2 million benefit from the favorable resolution of prior years’ tax matters.	
(2)	See Non-GAAP Financial Measures.	
(3)	For Q3 2012, favorable prior period development is net of $4 million of net earned premium adjustments on loss sensitive policies.	
 
Page 8

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

 	  	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Gross premiums written	  	$	544	  	 	$	511	  	 	$	513	  	 	$	512	  	 	$	520	  	 	$	2,080	  	 	$	1,990	  	
Net premiums written	  	 	517	  	 	 	488	  	 	 	486	  	 	 	488	  	 	 	496	  	 	 	1,979	  	 	 	1,913	  	
Net premiums earned	  	 	489	  	 	 	480	  	 	 	474	  	 	 	473	  	 	 	470	  	 	 	1,916	  	 	 	1,859	  	
Losses and loss expenses	  	 	148	  	 	 	164	  	 	 	151	  	 	 	148	  	 	 	154	  	 	 	611	  	 	 	593	  	
Policy benefits (1)	  	 	142	  	 	 	130	  	 	 	102	  	 	 	147	  	 	 	119	  	 	 	521	  	 	 	401	  	
(Gains) losses from fair value changes in separate account assets (1)	  	 	(11	) 	 	 	(14	) 	 	 	14	  	 	 	(18	) 	 	 	(3	) 	 	 	(29	) 	 	 	36	  	
Policy acquisition costs	  	 	90	  	 	 	80	  	 	 	88	  	 	 	76	  	 	 	86	  	 	 	334	  	 	 	339	  	
Administrative expenses	  	 	91	  	 	 	81	  	 	 	78	  	 	 	78	  	 	 	84	  	 	 	328	  	 	 	317	  	
Net investment income	  	 	65	  	 	 	63	  	 	 	62	  	 	 	61	  	 	 	60	  	 	 	251	  	 	 	226	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Life underwriting income (2)	  	 	94	  	 	 	102	  	 	 	103	  	 	 	103	  	 	 	90	  	 	 	402	  	 	 	399	  	
Net realized gains (losses):	  				 				 				 				 				 				 				
Mark-to-market on guaranteed living benefits derivative (net of related hedges)	  	 	138	  	 	 	(64	) 	 	 	(397	) 	 	 	197	  	 	 	(10	) 	 	 	(126	) 	 	 	(783	) 	
Foreign exchange gains (losses) and all other	  	 	51	  	 	 	(7	) 	 	 	(24	) 	 	 	34	  	 	 	17	  	 	 	54	  	 	 	(23	) 	
Interest expense	  	 	3	  	 	 	3	  	 	 	3	  	 	 	3	  	 	 	2	  	 	 	12	  	 	 	11	  	
Other income (expense) (1)	  	 	(11	) 	 	 	—  	  	 	 	(5	) 	 	 	(9	) 	 	 	1	  	 	 	(25	) 	 	 	(26	) 	
Income tax expense	  	 	14	  	 	 	14	  	 	 	19	  	 	 	11	  	 	 	9	  	 	 	58	  	 	 	50	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	255	  	 	 	14	  	 	 	(345	) 	 	 	311	  	 	 	87	  	 	 	235	  	 	 	(494	) 	
Net realized gains (losses)	  	 	189	  	 	 	(71	) 	 	 	(421	) 	 	 	231	  	 	 	7	  	 	 	(72	) 	 	 	(806	) 	
Net realized gains (losses) in other income (expense)	  	 	(7	) 	 	 	(3	) 	 	 	2	  	 	 	(5	) 	 	 	1	  	 	 	(13	) 	 	 	(1	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	1	  	 	 	(1	) 	 	 	5	  	 	 	(1	) 	 	 	—  	  	 	 	4	  	 	 	2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (3)	  	$	74	  	 	$	87	  	 	$	79	  	 	$	84	  	 	$	79	  	 	$	324	  	 	$	315	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period	  				 				 				 				 				 				 				
Net premiums written as reported	  	 	3.9	% 	 	 	0.0	% 	 	 	-1.2	% 	 	 	11.9	% 	 	 	14.5	% 	 	 	3.4	% 	 	 	16.2	% 	
Net premiums earned as reported	  	 	4.2	% 	 	 	0.0	% 	 	 	-1.9	% 	 	 	11.3	% 	 	 	13.7	% 	 	 	3.1	% 	 	 	14.1	% 	
Net premiums written constant $ (4)	  	 	3.5	% 	 				 				 				 				 	 	4.5	% 	 				
Net premiums earned constant $	  	 	3.7	% 	 				 				 				 				 	 	4.2	% 	 				
 
(1)	(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP are reclassified from Other income (expense) for purposes of presenting Life underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits.	
(2)	We assess the performance of our Life business based on Life underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets.	
(3)	See Non-GAAP Financial Measures.	
(4)	Net premiums written and deposits breakdown:	

 	  	4Q-12	 	  	Constant $
4Q-11	 	  	Constant $
% Change	 	
Life excluding life reinsurance runoff products (1)	  	$	639	  	  	$	530	  	  	 	20.6	% 	
Life reinsurance runoff products including variable annuity	  	 	77	  	  	 	84	  	  	 	-8.3	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total Life	  	$	716	  	  	$	614	  	  	 	16.6	% 	

(1)	Includes deposits collected on universal life and investment contracts of $199 million for Q4 2012 and $114 million for Q4 2011 on a constant-dollar basis. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues.	
 
Page 9

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

 	  	Unpaid Losses	 	 	Net Paid  to
Incurred Ratio	 	
 	  	Gross	 	 	Ceded	 	 	Net	 	 			
Balance at December 31, 2010	  	$	37,391	  	 	$	12,149	  	 	$	25,242	  	 				
Losses and loss expenses incurred	  	 	3,820	  	 	 	1,557	  	 	 	2,263	  	 				
Losses and loss expenses paid	  	 	(2,847	) 	 	 	(884	) 	 	 	(1,963	) 	 	 	87	% 	
Other (incl. foreign exch. revaluation)	  	 	479	  	 	 	161	  	 	 	318	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at March 31, 2011	  	$	38,843	  	 	$	12,983	  	 	$	25,860	  	 				
Losses and loss expenses incurred	  	 	2,752	  	 	 	526	  	 	 	2,226	  	 				
Losses and loss expenses paid	  	 	(2,730	) 	 	 	(872	) 	 	 	(1,858	) 	 	 	83	% 	
Other (incl. foreign exch. revaluation)	  	 	86	  	 	 	30	  	 	 	56	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at June 30, 2011	  	$	38,951	  	 	$	12,667	  	 	$	26,284	  	 				
Losses and loss expenses incurred	  	 	3,207	  	 	 	462	  	 	 	2,745	  	 				
Losses and loss expenses paid	  	 	(3,366	) 	 	 	(992	) 	 	 	(2,374	) 	 	 	86	% 	
Other (incl. foreign exch. revaluation)	  	 	(316	) 	 	 	(95	) 	 	 	(221	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at September 30, 2011	  	$	38,476	  	 	$	12,042	  	 	$	26,434	  	 				
Losses and loss expenses incurred	  	 	3,066	  	 	 	780	  	 	 	2,286	  	 				
Losses and loss expenses paid	  	 	(3,837	) 	 	 	(1,166	) 	 	 	(2,671	) 	 	 	117	% 	
Other (incl. foreign exch. revaluation)	  	 	(228	) 	 	 	(54	) 	 	 	(174	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at December 31, 2011	  	$	37,477	  	 	$	11,602	  	 	$	25,875	  	 				
Losses and loss expenses incurred	  	 	2,361	  	 	 	557	  	 	 	1,804	  	 				
Losses and loss expenses paid	  	 	(2,876	) 	 	 	(931	) 	 	 	(1,945	) 	 	 	108	% 	
Other (incl. foreign exch. revaluation)	  	 	285	  	 	 	90	  	 	 	195	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at March 31, 2012	  	$	37,247	  	 	$	11,318	  	 	$	25,929	  	 				
Losses and loss expenses incurred	  	 	2,851	  	 	 	732	  	 	 	2,119	  	 				
Losses and loss expenses paid	  	 	(2,916	) 	 	 	(893	) 	 	 	(2,023	) 	 	 	95	% 	
Other (incl. foreign exch. revaluation)	  	 	(332	) 	 	 	(171	) 	 	 	(161	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at June 30, 2012	  	$	36,850	  	 	$	10,986	  	 	$	25,864	  	 				
Losses and loss expenses incurred	  	 	4,073	  	 	 	1,026	  	 	 	3,047	  	 				
Losses and loss expenses paid	  	 	(3,078	) 	 	 	(1,013	) 	 	 	(2,065	) 	 	 	68	% 	
Other (incl. foreign exch. revaluation)	  	 	355	  	 	 	163	  	 	 	192	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at September 30, 2012	  	$	38,200	  	 	$	11,162	  	 	$	27,038	  	 				
Losses and loss expenses incurred	  	 	4,642	  	 	 	1,959	  	 	 	2,683	  	 				
Losses and loss expenses paid	  	 	(4,913	) 	 	 	(1,727	) 	 	 	(3,186	) 	 	 	119	% 	
Other (incl. foreign exch. revaluation)	  	 	17	  	 	 	5	  	 	 	12	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance at December 31, 2012	  	$	37,946	  	 	$	11,399	  	 	$	26,547	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Add net recoverable on paid losses	  	 	—  	  	 	 	679	  	 	 	(679	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance including net recoverable on paid losses	  	$	37,946	  	 	$	12,078	  	 	$	25,868	  	 				

Page 10

			
	 	ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)	
Net Reinsurance Recoverable by Division (1) 

   	  	December 31
2012	 	 	September 30
2012	 	 	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	
Reinsurance recoverable on paid losses and loss expenses	  				 				 				 				 				
Active operations	  	$	464	  	 	$	496	  	 	$	586	  	 	$	575	  	 	$	632	  	
Brandywine and Other Runoff	  	 	303	  	 	 	291	  	 	 	284	  	 	 	274	  	 	 	270	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	767	  	 	$	787	  	 	$	870	  	 	$	849	  	 	$	902	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reinsurance recoverable on unpaid losses and loss expenses	  				 				 				 				 				
Active operations	  	$	10,199	  	 	$	9,931	  	 	$	9,623	  	 	$	9,729	  	 	$	9,931	  	
Brandywine and Other Runoff	  	 	1,551	  	 	 	1,592	  	 	 	1,730	  	 	 	1,959	  	 	 	2,035	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	11,750	  	 	$	11,523	  	 	$	11,353	  	 	$	11,688	  	 	$	11,966	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross reinsurance recoverable	  				 				 				 				 				
Active operations	  	$	10,663	  	 	$	10,427	  	 	$	10,209	  	 	$	10,304	  	 	$	10,563	  	
Brandywine and Other Runoff	  	 	1,854	  	 	 	1,883	  	 	 	2,014	  	 	 	2,233	  	 	 	2,305	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	12,517	  	 	$	12,310	  	 	$	12,223	  	 	$	12,537	  	 	$	12,868	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Provision for uncollectible reinsurance (2) 	  				 				 				 				 				
Active operations	  	$	(277	) 	 	$	(281	) 	 	$	(297	) 	 	$	(303	) 	 	$	(302	) 	
Brandywine and Other Runoff	  	 	(162	) 	 	 	(172	) 	 	 	(174	) 	 	 	(177	) 	 	 	(177	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	(439	) 	 	$	(453	) 	 	$	(471	) 	 	$	(480	) 	 	$	(479	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net reinsurance recoverable	  				 				 				 				 				
Active operations	  	$	10,386	  	 	$	10,146	  	 	$	9,912	  	 	$	10,001	  	 	$	10,261	  	
Brandywine and Other Runoff	  	 	1,692	  	 	 	1,711	  	 	 	1,840	  	 	 	2,056	  	 	 	2,128	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	12,078	  	 	$	11,857	  	 	$	11,752	  	 	$	12,057	  	 	$	12,389	  	

(1)	Prior period amounts have been revised to reflect reclassification of certain businesses between active and run-off operations.	
(2)	The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance recoverables, net of approximately $2.5 billion of collateral.	
 
Page 11

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

 	 	December 31
2012	 	 	September 30
2012	 	 	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	
Market Value	 				 				 				 				 				 				 				 				 				 				
Fixed maturities available for sale	 	$	47,306	  	 				 	$	46,504	  	 				 	$	44,386	  	 				 	$	43,468	  	 				 	$	41,967	  	 				
Fixed maturities held to maturity	 	 	7,633	  	 				 	 	7,879	  	 				 	 	8,062	  	 				 	 	8,348	  	 				 	 	8,605	  	 				
Short-term investments	 	 	2,228	  	 				 	 	2,429	  	 				 	 	2,260	  	 				 	 	2,099	  	 				 	 	2,301	  	 				
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Total	 	$	57,167	  	 				 	$	56,812	  	 				 	$	54,708	  	 				 	$	53,915	  	 				 	$	52,873	  	 				
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Asset Allocation by Market Value	 				 				 				 				 				 				 				 				 				 				
Treasury	 	$	2,794	  	 	 	5	% 	 	$	2,731	  	 	 	5	% 	 	$	2,614	  	 	 	5	% 	 	$	2,451	  	 	 	5	% 	 	$	2,361	  	 	 	5	% 	
Agency	 	 	2,024	  	 	 	4	% 	 	 	1,952	  	 	 	3	% 	 	 	1,816	  	 	 	3	% 	 	 	1,811	  	 	 	3	% 	 	 	1,725	  	 	 	3	% 	
Corporate and asset-backed	 	 	18,983	  	 	 	33	% 	 	 	18,155	  	 	 	32	% 	 	 	17,581	  	 	 	32	% 	 	 	17,618	  	 	 	33	% 	 	 	17,030	  	 	 	32	% 	
Mortgage-backed	 	 	12,589	  	 	 	22	% 	 	 	13,066	  	 	 	23	% 	 	 	12,725	  	 	 	23	% 	 	 	12,800	  	 	 	24	% 	 	 	13,237	  	 	 	25	% 	
Municipal (1)	 	 	3,872	  	 	 	7	% 	 	 	3,542	  	 	 	7	% 	 	 	3,495	  	 	 	7	% 	 	 	3,295	  	 	 	6	% 	 	 	2,888	  	 	 	6	% 	
Non-U.S.	 	 	14,677	  	 	 	25	% 	 	 	14,937	  	 	 	26	% 	 	 	14,217	  	 	 	26	% 	 	 	13,841	  	 	 	26	% 	 	 	13,331	  	 	 	25	% 	
Short-term investments	 	 	2,228	  	 	 	4	% 	 	 	2,429	  	 	 	4	% 	 	 	2,260	  	 	 	4	% 	 	 	2,099	  	 	 	3	% 	 	 	2,301	  	 	 	4	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	57,167	  	 	 	100	% 	 	$	56,812	  	 	 	100	% 	 	$	54,708	  	 	 	100	% 	 	$	53,915	  	 	 	100	% 	 	$	52,873	  	 	 	100	% 	

Note: Insured municipal bonds represent $729 million, or 19% of our municipal bond holdings.	  	
											
Credit Quality by Market Value	 				 				 				 				 				 				 				 				 				 				
AAA	 	$	9,285	  	 	 	16	% 	 	$	9,270	  	 	 	17	% 	 	$	9,132	  	 	 	17	% 	 	$	9,115	  	 	 	17	% 	 	$	9,284	  	 	 	18	% 	
AA	 	 	22,014	  	 	 	39	% 	 	 	22,423	  	 	 	39	% 	 	 	20,931	  	 	 	38	% 	 	 	20,665	  	 	 	38	% 	 	 	20,562	  	 	 	39	% 	
A	 	 	10,760	  	 	 	19	% 	 	 	10,391	  	 	 	18	% 	 	 	10,400	  	 	 	19	% 	 	 	10,523	  	 	 	20	% 	 	 	10,106	  	 	 	19	% 	
BBB	 	 	6,591	  	 	 	12	% 	 	 	6,424	  	 	 	11	% 	 	 	6,243	  	 	 	11	% 	 	 	6,244	  	 	 	12	% 	 	 	6,152	  	 	 	12	% 	
BB	 	 	4,146	  	 	 	7	% 	 	 	4,264	  	 	 	8	% 	 	 	4,298	  	 	 	8	% 	 	 	4,009	  	 	 	7	% 	 	 	3,755	  	 	 	7	% 	
B	 	 	3,846	  	 	 	6	% 	 	 	3,506	  	 	 	6	% 	 	 	3,217	  	 	 	6	% 	 	 	2,828	  	 	 	5	% 	 	 	2,428	  	 	 	4	% 	
Other	 	 	525	  	 	 	1	% 	 	 	534	  	 	 	1	% 	 	 	487	  	 	 	1	% 	 	 	531	  	 	 	1	% 	 	 	586	  	 	 	1	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	57,167	  	 	 	100	% 	 	$	56,812	  	 	 	100	% 	 	$	54,708	  	 	 	100	% 	 	$	53,915	  	 	 	100	% 	 	$	52,873	  	 	 	100	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost/Amortized Cost	 				 				 				 				 				 				 				 				 				 				
Fixed maturities available for sale	 	$	44,666	  	 				 	$	43,758	  	 				 	$	42,316	  	 				 	$	41,661	  	 				 	$	40,450	  	 				
Fixed maturities held to maturity	 	 	7,270	  	 				 	 	7,493	  	 				 	 	7,782	  	 				 	 	8,117	  	 				 	 	8,447	  	 				
Short-term investments	 	 	2,228	  	 				 	 	2,429	  	 				 	 	2,260	  	 				 	 	2,099	  	 				 	 	2,301	  	 				
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Subtotal	 	 	54,164	  	 				 	 	53,680	  	 				 	 	52,358	  	 				 	 	51,877	  	 				 	 	51,198	  	 				
Equity securities	 	 	707	  	 				 	 	741	  	 				 	 	724	  	 				 	 	662	  	 				 	 	671	  	 				
Other investments	 	 	2,465	  	 				 	 	2,385	  	 				 	 	2,297	  	 				 	 	2,221	  	 				 	 	2,112	  	 				
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Total	 	$	57,336	  	 				 	$	56,806	  	 				 	$	55,379	  	 				 	$	54,760	  	 				 	$	53,981	  	 				
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Avg. duration of fixed maturities	 	 	3.9 years	  	 				 	 	3.7 years	  	 				 	 	3.8 years	  	 				 	 	3.9 years	  	 				 	 	3.7 years	  	 				
Avg. market yield of fixed maturities (2)	 	 	2.3	% 	 				 	 	2.2	% 	 				 	 	2.8	% 	 				 	 	3.0	% 	 				 	 	3.1	% 	 				
Avg. credit quality (3)	 	 	A/Aa	  	 				 	 	A/Aa	  	 				 	 	A/Aa	  	 				 	 	A/Aa	  	 				 	 	A/Aa	  	 				
Avg. yield on invested assets (4)	 	 	3.7	% 	 				 	 	3.8	% 	 				 	 	3.9	% 	 				 	 	4.0	% 	 				 	 	4.2	% 	 				
 
(1)	The rating of the municipal portfolio is AA with 8% of our holdings pre-funded with AA/Aaa Federal securities. The portfolio is highly diversified predominantly in State general obligation bonds and essential service revenue bonds, including education and utilities (water, power, and sewers).	
(2)	Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.	
(3)	We use a split rating due to S&P’s downgrade of U.S. Treasury and Agency securities.	
(4)	Net investment income, excluding non-recurring items, divided by average cost of fixed maturities and other investments, and average market value of equity securities.	
 
Page 12

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

 	  	S&P Credit Rating	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	
Market Value at December 31, 2012	  				  				  				  				  				  				
Agency residential mortgage-backed (RMBS)	  	$	—	  	  	$	10,637	  	  	$	—  	  	  	$	—  	  	  	$	—	  	  	$	10,637	  	
Non-agency RMBS	  	 	108	  	  	 	16	  	  	 	36	  	  	 	26	  	  	 	395	  	  	 	581	  	
Commercial mortgage-backed	  	 	1,338	  	  	 	14	  	  	 	12	  	  	 	7	  	  	 	—	  	  	 	1,371	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at market value	  	$	1,446	  	  	$	10,667	  	  	$	48	  	  	$	33	  	  	$	395	  	  	$	12,589	  	

 	  	S&P Credit Rating	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	
Amortized Cost at December 31, 2012	  				  				  				  				  				  				
Agency RMBS	  	$	—	  	  	$	10,188	  	  	$	—  	  	  	$	—	  	  	$	—	  	  	$	10,188	  	
Non-agency RMBS	  	 	107	  	  	 	16	  	  	 	35	  	  	 	26	  	  	 	425	  	  	 	609	  	
Commercial mortgage-backed	  	 	1,255	  	  	 	12	  	  	 	9	  	  	 	6	  	  	 	—	  	  	 	1,282	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at amortized cost	  	$	1,362	  	  	$	10,216	  	  	$	44	  	  	$	32	  	  	$	425	  	  	$	12,079	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mortgage-backed securities total $12.6 billion, are rated predominantly AA and comprise 22% of the fixed income portfolio. This compares to a 32% mortgage-backed weighting in representative indices of the U.S. fixed income market. The minimum rating for initial purchases of mortgage-backed securities is AA for agency mortgages and AAA for non-agency mortgages. 
Securities issued by Federal agencies with implied or explicit government guarantees total $10.6 billion and represent 95% of the residential mortgage-backed portfolio. 
Non-agency residential mortgage-backed securities are backed by prime collateral, and broadly diversified in over 42,000 loans. The portfolio’s original loan-to-value ratio is approximately 67% with an average FICO score of 732. With this conservative loan-to-value ratio and subordinated collateral of 6%, the cumulative 5-year foreclosure rate would have to rise to 17% before principal is significantly impaired. The foreclosure rate of ACE’s non-agency RMBS portfolio at December 31, 2012 was 7%. 
Commercial mortgage-backed securities of $1.4 billion are rated predominantly AAA, broadly diversified with over 13,000 loans and seasoned with 30% of the portfolio issued before 2006 and 50% of the portfolio issued after 2009. The average loan-to-value ratio is approximately 64% with a debt service coverage ratio in excess of 1.9 and weighted average subordinated collateral of 30%. The cumulative foreclosure rate would have to rise to 43% before principal is impaired. The foreclosure rate of ACE’s commercial mortgage-backed securities portfolio at December 31, 2012 was 1.8%. 
 
Page 13

			
	 	ACE Limited
Investment Portfolio—3
(in millions of U.S. dollars)
(Unaudited)	
U.S. Corporate and Asset-backed Fixed Income Portfolios
Market Value at December 31, 2012

   	  	S&P Credit Rating	 	
 	  	Investment Grade	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	Total	 	
Asset-backed	  	$	716	  	  	$	73	  	  	$	1	  	  	$	—  	  	  	$	790	  	
Banks	  	 	—  	  	  	 	—  	  	  	 	2,311	  	  	 	357	  	  	 	2,668	  	
Basic Materials	  	 	—  	  	  	 	—  	  	  	 	78	  	  	 	242	  	  	 	320	  	
Communications	  	 	—  	  	  	 	—  	  	  	 	608	  	  	 	746	  	  	 	1,354	  	
Consumer, Cyclical	  	 	—  	  	  	 	89	  	  	 	282	  	  	 	252	  	  	 	623	  	
Consumer, Non-Cyclical	  	 	60	  	  	 	513	  	  	 	931	  	  	 	577	  	  	 	2,081	  	
Diversified Financial Services	  	 	—  	  	  	 	54	  	  	 	216	  	  	 	109	  	  	 	379	  	
Energy	  	 	35	  	  	 	27	  	  	 	215	  	  	 	648	  	  	 	925	  	
Industrial	  	 	—  	  	  	 	371	  	  	 	364	  	  	 	171	  	  	 	906	  	
Utilities	  	 	—  	  	  	 	12	  	  	 	495	  	  	 	526	  	  	 	1,033	  	
All Others	  	 	49	  	  	 	148	  	  	 	455	  	  	 	522	  	  	 	1,174	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	860	  	  	$	1,287	  	  	$	5,956	  	  	$	4,150	  	  	$	12,253	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
U.S. Investment Grade Corporate Fixed Income Portfolio
The average credit quality of ACE’s U.S. investment grade bond portfolio is high at A.
ACE prohibits investments in complex structured securities (e.g., CDOs, CLOs) and over-the-counter derivatives and does not permit the use of portfolio leverage.
Corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA 2%, A 1%, BBB 0.5% of total portfolio) and are monitored on a daily basis by ACE via an internal compliance system.
Market Value at December 31, 2012

   	  	S&P Credit Rating	 	
 	  	Below Investment Grade	 	
 	  	BB	 	  	B	 	  	CCC	 	  	Total	 	
Asset-backed	  	$	4	  	  	$	—  	  	  	$	13	  	  	$	17	  	
Banks	  	 	—  	  	  	 	3	  	  	 	—  	  	  	 	3	  	
Basic Materials	  	 	185	  	  	 	130	  	  	 	6	  	  	 	321	  	
Communications	  	 	461	  	  	 	527	  	  	 	25	  	  	 	1,013	  	
Consumer, Cyclical	  	 	503	  	  	 	532	  	  	 	31	  	  	 	1,066	  	
Consumer, Non-Cyclical	  	 	583	  	  	 	881	  	  	 	21	  	  	 	1,485	  	
Diversified Financial Services	  	 	71	  	  	 	90	  	  	 	9	  	  	 	170	  	
Energy	  	 	649	  	  	 	422	  	  	 	15	  	  	 	1,086	  	
Industrial	  	 	381	  	  	 	350	  	  	 	9	  	  	 	740	  	
Utilities	  	 	294	  	  	 	17	  	  	 	1	  	  	 	312	  	
All Others	  	 	221	  	  	 	290	  	  	 	6	  	  	 	517	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	3,352	  	  	$	3,242	  	  	$	136	  	  	$	6,730	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
U.S. Below Investment Grade Corporate Fixed Income Portfolio
ACE manages high yield bonds as a distinct and separate asset class from investment grade bonds. ACE’s allocation to high yield bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B). Our minimum rating for initial purchase is BB/B.
Six external investment managers are responsible for high yield security selection and portfolio construction.
ACE’s high yield managers have a conservative approach to credit selection and very low historical default experience.
Securities holdings are highly diversified across industries and are subject to a 1.5% issuer limit as a percentage of high yield allocation. The portfolio comprises over 750 issuers with our largest current issuer exposure at $97 million. ACE monitors position limits on a daily basis through an internal compliance system.
Derivative and structured securities (e.g., credit default swaps, CLOs) are not permitted in high yield portfolios.
 
Page 14

			
	 	ACE Limited
Investment Portfolio—4
(in millions of U.S. dollars)
(Unaudited)	
Non-U.S. Fixed Income Portfolio
December 31, 2012

   	  	Market Value by S&P Credit Rating	 	  	Amortized
Cost	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	  			
United Kingdom	  	$	1,068	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	1,068	  	  	$	1,041	  	
Canada	  	 	948	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	948	  	  	 	921	  	
Republic of Korea	  	 	—  	  	  	 	513	  	  	 	74	  	  	 	—  	  	  	 	—  	  	  	 	587	  	  	 	535	  	
Germany	  	 	397	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	397	  	  	 	389	  	
Japan	  	 	—  	  	  	 	367	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	367	  	  	 	366	  	
France	  	 	—  	  	  	 	307	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	307	  	  	 	295	  	
Province of Ontario	  	 	—  	  	  	 	231	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	231	  	  	 	220	  	
Federative Republic of Brazil	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	229	  	  	 	—  	  	  	 	229	  	  	 	222	  	
Kingdom of Thailand	  	 	—  	  	  	 	—  	  	  	 	186	  	  	 	34	  	  	 	—  	  	  	 	220	  	  	 	217	  	
Province of Quebec	  	 	—  	  	  	 	—  	  	  	 	171	  	  	 	—  	  	  	 	—  	  	  	 	171	  	  	 	161	  	
Commonwealth of Australia	  	 	160	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	161	  	  	 	148	  	
State of Queensland	  	 	68	  	  	 	81	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	149	  	  	 	139	  	
Federation of Malaysia	  	 	—  	  	  	 	—  	  	  	 	132	  	  	 	—  	  	  	 	—  	  	  	 	132	  	  	 	132	  	
Swiss Confederation	  	 	120	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	120	  	  	 	113	  	
People’s Republic of China	  	 	68	  	  	 	50	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	119	  	  	 	116	  	
United Mexican States	  	 	1	  	  	 	—  	  	  	 	44	  	  	 	65	  	  	 	—  	  	  	 	110	  	  	 	102	  	
State of New South Wales	  	 	87	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	87	  	  	 	82	  	
Taiwan	  	 	—  	  	  	 	78	  	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	80	  	  	 	78	  	
Socialist Republic of Vietnam	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	63	  	  	 	63	  	  	 	61	  	
Russian Federation	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	55	  	  	 	—  	  	  	 	55	  	  	 	53	  	
State of Victoria	  	 	54	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	54	  	  	 	50	  	
Republic of Indonesia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	53	  	  	 	53	  	  	 	50	  	
Republic of Colombia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	47	  	  	 	—  	  	  	 	47	  	  	 	45	  	
Arab Republic of Egypt	  	 	—  	  	  	 	22	  	  	 	—  	  	  	 	—  	  	  	 	21	  	  	 	43	  	  	 	41	  	
Dominion of New Zealand	  	 	1	  	  	 	40	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	42	  	  	 	41	  	
Other Non-U.S. Government	  	 	241	  	  	 	209	  	  	 	102	  	  	 	49	  	  	 	125	  	  	 	726	  	  	 	688	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Non-U.S. Government Securities	  	$	3,213	  	  	$	1,899	  	  	$	713	  	  	$	479	  	  	$	262	  	  	$	6,566	  	  	$	6,306	  	
Eurozone Non-U.S. Corporate (1) 	  	 	584	  	  	 	341	  	  	 	528	  	  	 	459	  	  	 	444	  	  	 	2,356	  	  	 	2,219	  	
Other Non-U.S. Corporate	  	 	726	  	  	 	576	  	  	 	2,433	  	  	 	1,392	  	  	 	628	  	  	 	5,755	  	  	 	5,403	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	4,523	  	  	$	2,816	  	  	$	3,674	  	  	$	2,330	  	  	$	1,334	  	  	$	14,677	  	  	$	13,928	  	

(1)	Excludes United Kingdom	
Non-U.S. Fixed Income Portfolio
ACE’s non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of ACE’s non-U.S. operations.
76% of ACE’s non-U.S. fixed income portfolios are denominated in G7 currencies.
Average credit quality of non-U.S. fixed income securities is high at A and 54% of holdings are rated AAA or guaranteed by governments or quasi-government agencies.
Corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA 2%, A 1%, BBB 0.5% of total portfolio) and are monitored on a daily basis by ACE via an internal compliance system.
 
Page 15

			
	 	ACE Limited
Investment Portfolio—5
(in millions of U.S. dollars)
(Unaudited)	
Eurozone Non-U.S. Fixed Income Portfolio (Excluding United Kingdom)
December 31, 2012

   	  	Market Value by Industry	 	  	Amortized
Cost	 	
 	  	Bank	 	  	Financial	 	  	Industrial	 	  	Utility	 	  	Total	 	  			
Netherlands	  	$	183	  	  	$	156	  	  	$	343	  	  	$	145	  	  	$	828	  	  	$	772	  	
France	  	 	115	  	  	 	36	  	  	 	150	  	  	 	159	  	  	 	460	  	  	 	437	  	
Luxembourg	  	 	10	  	  	 	5	  	  	 	225	  	  	 	100	  	  	 	340	  	  	 	320	  	
Germany	  	 	227	  	  	 	1	  	  	 	65	  	  	 	8	  	  	 	301	  	  	 	287	  	
Euro Supranational	  	 	200	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	200	  	  	 	191	  	
Ireland	  	 	12	  	  	 	2	  	  	 	96	  	  	 	15	  	  	 	125	  	  	 	115	  	
Finland	  	 	26	  	  	 	—  	  	  	 	10	  	  	 	3	  	  	 	39	  	  	 	37	  	
Belgium	  	 	3	  	  	 	—  	  	  	 	31	  	  	 	—  	  	  	 	33	  	  	 	31	  	
Austria	  	 	19	  	  	 	—  	  	  	 	3	  	  	 	1	  	  	 	23	  	  	 	22	  	
Spain	  	 	6	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	6	  	  	 	6	  	
Portugal	  	 	—  	  	  	 	—  	  	  	 	1	  	  	 	—  	  	  	 	1	  	  	 	1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Eurozone Non-U.S. Corporate Securities	  	$	801	  	  	$	200	  	  	$	924	  	  	$	431	  	  	$	2,356	  	  	$	2,219	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Note: ACE has no investments in Greece and Italy
Top 10 Exposures—Eurozone Banks (Excluding United Kingdom)

December 31, 2012	  	Market Value	 	  	Amortized Cost	 	  	Rating	
European Investment Bank	  	$	167	  	  	$	160	  	  	AAA	
KFW	  	 	146	  	  	 	139	  	  	AAA	
Rabobank Nederland NV	  	 	112	  	  	 	102	  	  	AA-	
Bank Nederlandse Gemeenten	  	 	35	  	  	 	34	  	  	AAA	
Credit Agricole Groupe	  	 	33	  	  	 	32	  	  	A	
BNP Paribas SA	  	 	31	  	  	 	29	  	  	A+	
Erste Abwicklungsanstalt	  	 	24	  	  	 	23	  	  	AA-	
Groupe BPCE	  	 	23	  	  	 	22	  	  	A	
Nordea Bank AB	  	 	23	  	  	 	22	  	  	AA-	
Societe Generale SA	  	 	20	  	  	 	19	  	  	A	
Top 10 Exposures—Eurozone Corporate (Excluding United Kingdom)

December 31, 2012	  	Market Value	 	  	Amortized Cost	 	  	Rating	
ING Groep NV	  	$	94	  	  	$	89	  	  	A	
Electricite de France SA	  	 	92	  	  	 	87	  	  	A+	
Intelsat SA	  	 	82	  	  	 	78	  	  	B	
Royal Dutch Shell PLC	  	 	75	  	  	 	71	  	  	AA	
Deutsche Telekom AG	  	 	72	  	  	 	64	  	  	BBB+	
LyondellBasell Industries NV	  	 	57	  	  	 	49	  	  	BB+	
France Telecom SA	  	 	43	  	  	 	40	  	  	A-	
Gazprom OAO	  	 	40	  	  	 	36	  	  	BBB	
General Electric Co	  	 	35	  	  	 	32	  	  	AA+	
NIBC Holding NV	  	 	33	  	  	 	32	  	  	BBB-	
 
Page 16

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

 	 	December 31, 2012	  	Market Value	 	  	Rating	
1	 	JP Morgan Chase & Co	  	$	455	  	  	A	
2	 	General Electric Co	  	 	438	  	  	AA+	
3	 	Goldman Sachs Group Inc	  	 	366	  	  	A-	
4	 	Citigroup Inc	  	 	348	  	  	A-	
5	 	Bank of America Corp	  	 	310	  	  	A-	
6	 	Morgan Stanley	  	 	289	  	  	A-	
7	 	Verizon Communications Inc	  	 	267	  	  	A-	
8	 	Wells Fargo & Co	  	 	266	  	  	A+	
9	 	AT&T INC	  	 	217	  	  	A-	
10	 	HSBC Holdings Plc	  	 	215	  	  	A+	
11	 	Comcast Corp	  	 	166	  	  	BBB+	
12	 	Mondelez International Inc	  	 	165	  	  	BBB	
13	 	Anheuser-Busch InBev NV	  	 	147	  	  	A	
14	 	BP Plc	  	 	130	  	  	A	
15	 	Time Warner Cable Inc	  	 	128	  	  	BBB	
16	 	Duke Energy Corp	  	 	126	  	  	BBB+	
17	 	Royal Bank of Scotland Group Plc	  	 	125	  	  	A-	
18	 	Barclays Plc	  	 	124	  	  	A	
19	 	Pfizer Inc	  	 	122	  	  	AA	
20	 	Philip Morris International Inc	  	 	116	  	  	A	
21	 	Credit Suisse Group	  	 	115	  	  	A	
22	 	Rabobank Nederland NV	  	 	112	  	  	AA-	
23	 	American Express Co	  	 	111	  	  	BBB+	
24	 	UBS AG	  	 	109	  	  	A	
25	 	Enterprise Products Partners LP	  	 	106	  	  	BBB	
 
Page 17

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

 	  	Three months ended December 31, 2012	 	 	Year ended December 31, 2012	 	
 	  	Net Realized
Gains
(Losses) (1)	 	 	Net Unrealized
Gains
(Losses)	 	 	Net
Impact	 	 	Net Realized
Gains
(Losses) (1)	 	 	Net Unrealized
Gains
(Losses)	 	 	Net
Impact	 	
Fixed maturities	  	$	81	  	 	$	(131	) 	 	$	(50	) 	 	$	230	  	 	$	1,005	  	 	$	1,235	  	
Fixed income derivatives	  	 	(3	) 	 	 	—  	  	 	 	(3	) 	 	 	(6	) 	 	 	—  	  	 	 	(6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total fixed maturities	  	 	78	  	 	 	(131	) 	 	 	(53	) 	 	 	224	  	 	 	1,005	  	 	 	1,229	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Public equity	  	 	6	  	 	 	9	  	 	 	15	  	 	 	4	  	 	 	61	  	 	 	65	  	
Private equity	  	 	36	  	 	 	16	  	 	 	52	  	 	 	79	  	 	 	49	  	 	 	128	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	  	 	42	  	 	 	25	  	 	 	67	  	 	 	83	  	 	 	110	  	 	 	193	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market gains (losses) from derivative transactions (2)	  	 	138	  	 	 	—  	  	 	 	138	  	 	 	(130	) 	 	 	—  	  	 	 	(130	) 	
Foreign exchange gains (losses) (2)	  	 	48	  	 	 	—  	  	 	 	48	  	 	 	(16	) 	 	 	—  	  	 	 	(16	) 	
Other	  	 	2	  	 	 	—  	  	 	 	2	  	 	 	3	  	 	 	5	  	 	 	8	  	
Partially-owned entities (3)	  	 	(13	) 	 	 	—  	  	 	 	(13	) 	 	 	(24	) 	 	 	(4	) 	 	 	(28	) 	
Income tax expense (benefit)	  	 	22	  	 	 	(36	) 	 	 	(14	) 	 	 	58	  	 	 	198	  	 	 	256	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net gains (losses)	  	$	273	  	 	$	(70	) 	 	$	203	  	 	$	82	  	 	$	918	  	 	$	1,000	  	

(1)	Other-than-temporary impairments for the quarter includes $7 million for fixed maturities. Year to date other-than-temporary impairments includes $25 million for fixed maturities, $7 million for private equity, and $5 million for public equity.	
(2)	Includes $138 million of realized gains from variable annuity reinsurance for the quarter which comprises $127 million in mark-to-market gains from derivative transactions and $11 million of gains on applicable hedges. The variable annuity reinsurance foreign exchange gains for the quarter were $35 million. For the year, the $126 million of realized losses from variable annuity reinsurance includes $171 million in mark-to-market gains from derivative transactions and $297 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange gains for the year were $33 million.	
(3)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	

 	  	Three months ended December 31, 2011	 	 	Year ended December 31, 2011	 	
 	  	Net Realized
Gains
(Losses) (4)	 	 	Net Unrealized
Gains
(Losses)	 	 	Net
Impact	 	 	Net Realized
Gains
(Losses) (4)	 	 	Net Unrealized
Gains
(Losses)	 	 	Net
Impact	 	
Fixed maturities	  	$	21	  	 	$	236	  	 	$	257	  	 	$	164	  	 	$	480	  	 	$	644	  	
Fixed income derivatives	  	 	14	  	 	 	—  	  	 	 	14	  	 	 	(143	) 	 	 	—  	  	 	 	(143	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total fixed maturities	  	 	35	  	 	 	236	  	 	 	271	  	 	 	21	  	 	 	480	  	 	 	501	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Public equity	  	 	—  	  	 	 	4	  	 	 	4	  	 	 	9	  	 	 	(47	) 	 	 	(38	) 	
Private equity	  	 	18	  	 	 	(20	) 	 	 	(2	) 	 	 	24	  	 	 	22	  	 	 	46	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	  	 	18	  	 	 	(16	) 	 	 	2	  	 	 	33	  	 	 	(25	) 	 	 	8	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market losses from derivative transactions (5)	  	 	(13	) 	 	 	—  	  	 	 	(13	) 	 	 	(787	) 	 	 	—  	  	 	 	(787	) 	
Foreign exchange gains (losses) (5)	  	 	76	  	 	 	—  	  	 	 	76	  	 	 	(13	) 	 	 	—  	  	 	 	(13	) 	
Other	  	 	(14	) 	 	 	13	  	 	 	(1	) 	 	 	(21	) 	 	 	15	  	 	 	(6	) 	
Partially-owned entities (6)	  	 	(3	) 	 	 	1	  	 	 	(2	) 	 	 	(4	) 	 	 	3	  	 	 	(1	) 	
Income tax expense	  	 	12	  	 	 	45	  	 	 	57	  	 	 	20	  	 	 	157	  	 	 	177	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net gains (losses)	  	$	87	  	 	$	189	  	 	$	276	  	 	$	(791	) 	 	$	316	  	 	$	(475	) 	

(4)	Other-than-temporary impairments for the quarter includes $18 million for fixed maturities. Year to date other-than-temporary impairments includes $46 million for fixed maturities, $3 million for private equity, and $1 million for public equity.	
(5)	Includes $10 million of realized losses from variable annuity reinsurance for the quarter which comprises $146 million in mark-to-market gains from derivatives transactions, net of $156 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange gains for the quarter were $11 million. For the year $783 million of realized losses from variable annuity reinsurance includes $779 million in mark-to-market losses from derivative transactions and $4 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange losses for the year were $33 million.	
(6)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	
 
Page 18

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

 	  	December 31
2012	 	 	September 30
2012	 	 	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	 	December 31
2010	 	
Total short-term debt (1)	  	$	1,401	  	 	$	1,402	  	 	$	1,401	  	 	$	1,531	  	 	$	1,251	  	 	$	1,300	  	
Total long-term debt	  	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,358	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total debt	  	$	4,761	  	 	$	4,762	  	 	$	4,761	  	 	$	4,891	  	 	$	4,611	  	 	$	4,658	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total trust preferred securities	  	$	309	  	 	$	309	  	 	$	309	  	 	$	309	  	 	$	309	  	 	$	309	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	  	$	27,531	  	 	$	26,963	  	 	$	25,762	  	 	$	25,431	  	 	$	24,332	  	 	$	22,835	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total capitalization	  	$	32,601	  	 	$	32,034	  	 	$	30,832	  	 	$	30,631	  	 	$	29,252	  	 	$	27,802	  	
Tangible capital (2)	  	$	27,626	  	 	$	27,044	  	 	$	26,006	  	 	$	25,771	  	 	$	24,453	  	 	$	23,138	  	
Leverage ratios	  				 				 				 				 				 				
Debt/ total capitalization	  	 	14.6	% 	 	 	14.9	% 	 	 	15.4	% 	 	 	16.0	% 	 	 	15.8	% 	 	 	16.8	% 	
Debt plus trust preferred securities/ total capitalization	  	 	15.6	% 	 	 	15.8	% 	 	 	16.4	% 	 	 	17.0	% 	 	 	16.8	% 	 	 	17.9	% 	
Debt/ tangible capital	  	 	17.2	% 	 	 	17.6	% 	 	 	18.3	% 	 	 	19.0	% 	 	 	18.9	% 	 	 	20.1	% 	
Debt plus trust preferred securities/ tangible capital	  	 	18.4	% 	 	 	18.8	% 	 	 	19.5	% 	 	 	20.2	% 	 	 	20.1	% 	 	 	21.5	% 	
Note: As of December 31, 2012, there was $1.5 billion usage of credit facilities on a total commitment of $1.9 billion.
 
(1)	Repurchase agreements in the amount of $850 million matured during the quarter, and there were new repurchase agreements in the amount of $849 million.	
(2)	Tangible capital is equal to total capitalization less goodwill and other intangible assets.	
 
Page 19

			
	 	ACE Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)	

 	  	Three months ended December 31	 	 	Year ended December 31	 	
 	  	2012	 	  	2011	 	 	2012	 	 	2011	 	
Numerator	  				  				 				 				
Income to common shares, excl. net realized gains (losses) (1)	  	$	492	  	  	$	648	  	 	$	2,624	  	 	$	2,331	  	
Net realized gains (losses), net of income tax	  	 	273	  	  	 	87	  	 	 	82	  	 	 	(791	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	765	  	  	$	735	  	 	$	2,706	  	 	$	1,540	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Rollforward of Common Shares Outstanding	  				  				 				 				
Shares—beginning of period	  	 	339,735,109	  	  	 	336,390,293	  	 	 	336,927,276	  	 	 	334,942,852	  	
Repurchase of shares	  	 	—  	  	  	 	(461,428	) 	 	 	(100,000	) 	 	 	(2,058,860	) 	
Shares issued, excluding option exercises	  	 	55,188	  	  	 	(41,115	) 	 	 	1,092,389	  	 	 	1,302,046	  	
Issued for option exercises	  	 	531,237	  	  	 	1,039,526	  	 	 	2,401,869	  	 	 	2,741,238	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Shares—end of period	  	 	340,321,534	  	  	 	336,927,276	  	 	 	340,321,534	  	 	 	336,927,276	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Denominator	  				  				 				 				
Weighted average shares outstanding	  	 	340,821,273	  	  	 	338,260,786	  	 	 	339,843,438	  	 	 	338,159,409	  	
Effect of other dilutive securities	  	 	2,920,626	  	  	 	2,740,500	  	 	 	2,903,512	  	 	 	2,620,815	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	343,741,899	  	  	 	341,001,286	  	 	 	342,746,950	  	 	 	340,780,224	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per share	  				  				 				 				
Income excluding net realized gains (losses) (1)	  	$	1.44	  	  	$	1.91	  	 	$	7.72	  	 	$	6.89	  	
Net realized gains (losses), net of income tax	  	 	0.80	  	  	 	0.26	  	 	 	0.24	  	 	 	(2.34	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	2.24	  	  	$	2.17	  	 	$	7.96	  	 	$	4.55	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	  				  				 				 				
Income excluding net realized gains (losses) (1)	  	$	1.43	  	  	$	1.90	  	 	$	7.65	  	 	$	6.84	  	
Net realized gains (losses), net of income tax	  	 	0.79	  	  	 	0.25	  	 	 	0.24	  	 	 	(2.32	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	2.22	  	  	$	2.15	  	 	$	7.89	  	 	$	4.52	  	

(1)	See Non-GAAP Financial Measures.	
 
Page 20

			
	 	ACE Limited
Non-GAAP Financial Measures
(in millions of U.S. dollars)
(Unaudited)	
Regulation G—Non-GAAP Financial Measures
In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations. However, they should not be viewed as a substitute for measures determined in accordance with generally accepted accounting principles (GAAP). A reconciliation of book value per common share is provided on page 23.
In presenting our segment operating results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs, and administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and net realized gains (losses). Life underwriting income includes net investment income and gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.
Loss and loss expense ratio excluding the impact of catastrophe losses and prior period development (PPD) is a non-GAAP financial measure. The loss ratio numerator includes Losses and loss expenses adjusted to exclude catastrophe losses and PPD. The loss ratio denominator includes Net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating this ratio. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
Combined ratio excluding catastrophe losses, PPD, and crop is a non-GAAP financial measure. The ratio numerator includes losses and loss expenses, policy acquisition costs, and administrative expenses adjusted to exclude catastrophe losses, PPD, and crop insurance. The ratio denominator includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected, net earned premium adjustments on loss sensitive policies and net premiums earned on crop insurance business. We believe that excluding the impact of catastrophe losses, PPD, and crop insurance provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses) is an annualized non-GAAP financial measure. The ROE numerator includes income adjusted to exclude net realized gains (losses), net of tax. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate, multiply by four. Operating ROE is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.
Income excluding net realized gains (losses), net of tax, is a common performance measurement for insurance companies and non-GAAP financial measure. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially owned entities because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with GAAP.
Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on net realized gains (losses). The denominator excludes net realized gains (losses), before tax. We exclude net realized gains (losses) and the related tax impact because these amounts are heavily influenced by, and fluctuate in part according to, the availability of market opportunities. Operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.
The following table presents the reconciliation of Net income to Income excluding net realized gains (losses):

 	  	4Q-12	 	  	3Q-12	 	 	2Q-12	 	 	1Q-12	 	  	4Q-11	 	  	Full Year
2012	 	  	Full Year
2011	 	
Net income, as reported	  	$	765	  	  	$	640	  	 	$	328	  	 	$	973	  	  	$	735	  	  	$	2,706	  	  	$	1,540	  	
Net realized gains (losses)	  	 	272	  	  	 	(60	) 	 	 	(394	) 	 	 	260	  	  	 	83	  	  	 	78	  	  	 	(795	) 	
Net realized gains (losses) in other income (expense) (1)	  	 	23	  	  	 	20	  	 	 	1	  	 	 	18	  	  	 	16	  	  	 	62	  	  	 	24	  	
Income tax expense on net realized gains (losses)	  	 	22	  	  	 	8	  	 	 	22	  	 	 	6	  	  	 	12	  	  	 	58	  	  	 	20	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income excluding net realized gains (losses)	  	$	492	  	  	$	688	  	 	$	743	  	 	$	701	  	  	$	648	  	  	$	2,624	  	  	$	2,331	  	

(1)	Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).	
 
Page 21

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

   	  	4Q-12	 	 	3Q-12	 	 	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Tax expense (benefit), as reported	  	$	(135	) 	 	$	147	  	 	$	148	  	 	$	110	  	 	$	120	  	 	$	270	  	 	$	502	  	
Tax expense on net realized gains (losses)	  	 	22	  	 	 	8	  	 	 	22	  	 	 	6	  	 	 	12	  	 	 	58	  	 	 	20	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax expense (benefit), adjusted	  	$	(157	) 	 	$	139	  	 	$	126	  	 	$	104	  	 	$	108	  	 	$	212	  	 	$	482	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before tax, as reported	  	$	630	  	 	$	787	  	 	$	476	  	 	$	1,083	  	 	$	855	  	 	$	2,976	  	 	$	2,042	  	
Less: realized gains (losses)	  	 	272	  	 	 	(60	) 	 	 	(394	) 	 	 	260	  	 	 	83	  	 	 	78	  	 	 	(795	) 	
Less: realized gains (losses) in other income (expense)	  	 	23	  	 	 	20	  	 	 	1	  	 	 	18	  	 	 	16	  	 	 	62	  	 	 	24	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) before tax	  	$	335	  	 	$	827	  	 	$	869	  	 	$	805	  	 	$	756	  	 	$	2,836	  	 	$	2,813	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	-21.4	% 	 	 	18.7	% 	 	 	31.0	% 	 	 	10.2	% 	 	 	14.1	% 	 	 	9.1	% 	 	 	24.6	% 	
Adjustment for tax impact of net realized gains (losses)	  	 	-25.4	% 	 	 	-2.0	% 	 	 	-16.4	% 	 	 	2.8	% 	 	 	0.3	% 	 	 	-1.6	% 	 	 	-7.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating effective tax rate	  	 	-46.8	% 	 	 	16.7	% 	 	 	14.6	% 	 	 	13.0	% 	 	 	14.4	% 	 	 	7.5	% 	 	 	17.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The following table presents the reconciliation of ROE to Operating ROE:

 	  	4Q-12	 	 	4Q-11	 	 	Full Year
2012	 	 	Full Year
2011	 	
Net income	  	$	765	  	 	$	735	  	 	$	2,706	  	 	$	1,540	  	
Income excluding net realized gains (losses)	  	$	492	  	 	$	648	  	 	$	2,624	  	 	$	2,331	  	
Equity—beginning of period, as reported	  	$	26,963	  	 	$	23,581	  	 	$	24,332	  	 	$	22,835	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	2,703	  	 	 	1,526	  	 	 	1,715	  	 	 	1,399	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity—beginning of period, as adjusted	  	$	24,260	  	 	$	22,055	  	 	$	22,617	  	 	$	21,436	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity—end of period, as reported	  	$	27,531	  	 	$	24,332	  	 	$	27,531	  	 	$	24,332	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	2,633	  	 	 	1,715	  	 	 	2,633	  	 	 	1,715	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity—end of period, as adjusted	  	$	24,898	  	 	$	22,617	  	 	$	24,898	  	 	$	22,617	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average equity, as reported	  	$	27,247	  	 	$	23,957	  	 	$	25,932	  	 	$	23,584	  	
Average equity, as adjusted	  	$	24,579	  	 	$	22,336	  	 	$	23,758	  	 	$	22,027	  	
Operating ROE calculated using income excluding net realized gains (losses)	  	 	8.0	% 	 	 	11.6	% 	 	 	11.0	% 	 	 	10.6	% 	
ROE calculated using net income	  	 	11.2	% 	 	 	12.3	% 	 	 	10.4	% 	 	 	6.5	% 	
 
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	 	ACE Limited
Book Value and Book Value per Common Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)	

   	  	December 31
2012	 	 	September 30
2012	 	 	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	
Reconciliation of Book Value per Common Share	  				 				 				 				 				
Shareholders’ equity	  	$	27,531	  	 	$	26,963	  	 	$	25,762	  	 	$	25,431	  	 	$	24,332	  	
Less: goodwill and other intangible assets	  	 	4,975	  	 	 	4,990	  	 	 	4,826	  	 	 	4,860	  	 	 	4,799	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Numerator for tangible book value per share	  	$	22,556	  	 	$	21,973	  	 	$	20,936	  	 	$	20,571	  	 	$	19,533	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Book value—% change over prior quarter  (1)	  	 	2.1	% 	 	 	4.7	% 	 	 	1.3	% 	 	 	4.5	% 	 	 	3.2	% 	
Tangible book value—% change over prior quarter  (1)	  	 	2.7	% 	 	 	5.0	% 	 	 	1.8	% 	 	 	5.3	% 	 	 	3.9	% 	
Denominator	  	 	340,321,534	  	 	 	339,735,109	  	 	 	339,060,885	  	 	 	338,653,382	  	 	 	336,927,276	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Book value per common share	  	$	80.90	  	 	$	79.36	  	 	$	75.98	  	 	$	75.09	  	 	$	72.22	  	
Tangible book value per common share	  	$	66.28	  	 	$	64.67	  	 	$	61.75	  	 	$	60.74	  	 	$	57.97	  	
Reconciliation of Book Value	  				 				 				 				 				
Shareholders’ equity, beginning of quarter	  	$	26,963	  	 	$	25,762	  	 	$	25,431	  	 	$	24,332	  	 	$	23,581	  	
Income excluding net realized gains (losses)	  	 	492	  	 	 	688	  	 	 	743	  	 	 	701	  	 	 	648	  	
Net realized gains (losses), net of tax	  	 	273	  	 	 	(48	) 	 	 	(415	) 	 	 	272	  	 	 	87	  	
Net unrealized gains (losses), net of tax	  	 	(70	) 	 	 	537	  	 	 	208	  	 	 	243	  	 	 	189	  	
Repurchase of shares	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(7	) 	 	 	(32	) 	
Dividend declared on common shares	  	 	(168	) 	 	 	(168	) 	 	 	(168	) 	 	 	(200	) 	 	 	(118	) 	
Cumulative translation, net of tax	  	 	(37	) 	 	 	141	  	 	 	(79	) 	 	 	56	  	 	 	(123	) 	
Pension liability	  	 	(20	) 	 	 	(2	) 	 	 	—  	  	 	 	(1	) 	 	 	6	  	
Other (2)	  	 	98	  	 	 	53	  	 	 	42	  	 	 	35	  	 	 	94	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	27,531	  	 	$	26,963	  	 	$	25,762	  	 	$	25,431	  	 	$	24,332	  	

(1)	At December 31, 2012, book value increased 13.1% and tangible book value increased 15.5% from December 31, 2011.	
(2)	Other primarily includes proceeds from exercise of stock options and stock compensation.	
 
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	 	ACE Limited
Glossary	
ACE Limited Consolidated comprises all segments including Corporate and Other.
Operating return on equity (ROE) or ROE calculated using income excluding net realized gains (losses): Income excluding net realized gains (losses), net of tax, divided by average shareholders’ equity for the period excluding unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate multiply by four.
Book value per common share: Shareholders’ equity divided by the shares outstanding.
Combined Insurance: Combined Insurance Company of America, acquired April 1, 2008.
Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding life business. Calculated on a GAAP basis.
Operating effective tax rate: Income tax expense excluding tax expense (benefit) on net realized gains (losses) divided by income excluding net realized gains (losses) before tax.
G7: A group of seven industrialized nations including Canada, France, Germany, Italy, Japan, United Kingdom, and the United States.
Life underwriting income: Net premiums earned and net investment income less policy benefits, acquisition costs, and administrative expenses. In addition, Life underwriting income includes gains/losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.
NM: Not meaningful.
Tangible book value per common share: Shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.
Tangible capital: Total capitalization less goodwill and other intangible assets.
Total capitalization: Short-term debt, long-term debt, trust preferreds, and shareholders’ equity.
 
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