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

 
FORM 8-K
Current Report
Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)—April 27, 2004

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

 
					
Cayman Islands	 	1-11778	 	98-0091805	
(State or other jurisdiction)	 	(Commission File Number)	 	(I.R.S. Employer of Incorporation
Identification No.)	

 
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM 08 Bermuda
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (441) 295-5200
 
Not applicable
(Former name or former address, if changed since last report)

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

Exhibit
Number
	  	Description

99.1	  	Press release, dated April 27, 2004, reporting first quarter results	
		
99.2	  	First quarter 2004 Financial Supplement	
 
Item 12.	Results of Operations and Financial Condition	
 
On April 27, 2004, ACE Limited issued a press release reporting its first quarter 2004 results and the availability of its first quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.
 
In accordance with general instruction B.6 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 12 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

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

A CE L IMITED	
		
By:	 	/ S /    P HILLIP V. B ANCROFT	
 	 		
 	 	Phillip V. Bancroft
Chief Financial Officer	
 
DATE: April 27, 2004

EXHIBIT INDEX

Number
	  	Description
	  	Method of Filing

99.1	  	Press release, dated April 27, 2004, reporting first quarter results	  	Furnished herewith	
			
99.2	  	First quarter 2004 Financial Supplement	  	Furnished herewith	

EXHIBIT 99.1

[LOGO OF ACE]
ace limited	  	ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue Bermuda
Hamilton HM 08
Bermuda	  	PO Box 1015
Hamilton HM DX
 
441 295-5200 main
441 292-8675 fax
 
www.acelimited.com	  	News
Release	
 
FOR IMMEDIATE RELEASE

 	  	Investor Contact:	  	Helen M. Wilson                            
(441) 299-9283	
			
 	  	Media Contact:	  	Anna Lowry
(441) 278-6683	
 
ACE Limited Reports first QUARTER RESULTS
 
HAMILTON, Bermuda, April 27, 2004 —ACE Limited (NYSE: ACE) today reported net income for the first quarter ended March 31, 2004 of $447 million or $1.53 per share, compared with net income of $247 million or $0.90 per share for the prior year. Income excluding net realized gains (losses) for the first quarter increased 47% to $411 million, or $1.40 per share, compared with $279 million or $1.02 per share for the same period a year ago. (1)
 
Brian Duperreault, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE continues to make progress on every front. We grew rapidly in our key businesses, improved our margins and strengthened our balance sheet. Tomorrow, the successful initial public offering of our Financial Guaranty business will be closed, putting ACE in the strongest position it has ever been in to face the new business opportunities that lie ahead.”
 
Other first quarter operating highlights were as follows:
 
 	•	Net premiums written increased 11% to $3.2 billion, reflecting P&C net premium growth of 26%	
 
 	•	The P&C combined ratio improved to 88.4% for the quarter compared with 90.6% a year ago	
 
 	•	Operating cash flow amounted to $1.2 billion for the quarter	
 
 	•	Cash and invested assets increased by $2.2 billion	
 
 	•	Net investment income increased 16% to $238 million, reflecting P&C net investment income growth of 19%	
 
 	•	Shareholders’ equity increased 6% from year-end to $9.4 billion and 40% over the prior year	
 
 	•	Tangible equity rose to $6.7 billion, a gain of 9% from year-end and 68% over the prior year	
 
 	•	Debt to total capital ratio fell to 16.1% from 16.9% at year-end 2003	
 
 	•	Annualized return on equity for the quarter ended March 31, 2004 was 18.7%; excluding FAS 115, it was 20.4%	
 
 	•	Diluted book value per share as of March 31, 2004 increased 6% to $31.36 (2)	
 
Financial results improved over the prior year’s results for virtually every business segment. Further details are available in the financial supplement. Key items include:
 
 	•	Insurance-North American: Net premiums written increased 30% and the combined ratio improved to 89.4%.	
 
 	•	Insurance-Overseas General: Net premiums written increased 22%. The segment’s combined ratio improved to 89.3%.	

 	•	Global Reinsurance: Net premiums written were up 28%. This segment had a combined ratio of 73.5%.	
 
 	•	Financial Services: Net income increased 48% for the quarter reflecting a combined ratio of 67.6%.	
 
On April 23, 2004 ACE offered approximately 65% of Assured Guaranty Ltd. to the public. The transaction will net approximately $1 billion to ACE in cash. ACE expects to use the net proceeds to support its property and casualty insurance operations and for general corporate purposes.
 
Please refer to the ACE Financial Supplement March 31, 2004, which is posted on the Company’s website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, financial guaranty portfolio, investment portfolio and capital structure. ACE’s website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports/fin_supp_March_31,_2004.xls . (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser’s URL address field.)
 
ACE Limited (NYSE: ACE) will host its first quarter 2004 earnings conference call and webcast on Wednesday, April 28, 2004 beginning at 8:30 a.m. EDT. The call is available via live and archived webcast at www.acelimited.com or by dialing 1-973-582-2745. Please refer to our website in the “Investor Information, Calendar of Events” for details. A replay of the call will be available until Wednesday, May 12, 2004. To listen to the replay, dial: 1-877-519-4471 (in the United States) or 1-973-341-3080 (international); passcode 4664925.
 
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. A component of the Standard & Poor’s 500 stock index, The ACE Group conducts its business on a worldwide basis with operating subsidiaries in approximately 50 countries. Additional information can be found at: www.acelimited.com .

1 Income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments is a common performance measurement. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. This measure should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).
 
2 Diluted book value per ordinary share is ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
 
Cautionary Statement Regarding Forward-Looking Statements:
 
Any forward-looking statements made in this press release reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those, set forth in these statements. For example, the Company’s forward-looking statements could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial and legislative developments, litigation tactics, the amount and timing of reinsurance recoverable, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
(tables to follow)
 
Page 2/5

ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)

							
 	  	March 31
2004
	  	December 31
2003
	
 	  	(Unaudited)	  	 	
Assets	  	 	 	  	 	 	
Total investments and cash	  	$	26,189	  	$	24,008	
Insurance and reinsurance balances receivable	  	 	3,493	  	 	2,837	
Reinsurance recoverable	  	 	14,062	  	 	14,081	
Other assets	  	 	8,734	  	 	8,627	
 	  			  			
Total assets	  	$	52,478	  	$	49,553	

Liabilities	  	 	 	  	 	 	
Unpaid losses and loss expenses	  	$	27,697	  	$	27,155	
Unearned premiums	  	 	6,930	  	 	6,051	
Other liabilities	  	 	8,454	  	 	7,512	
 	  			  			
Total liabilities	  	$	43,081	  	$	40,718	

Shareholders’ equity	  	 	 	  	 	 	
Total shareholders’ equity	  	$	9,397	  	$	8,835	
 	  			  			
Total liabilities, mezzanine equity and shareholders’ equity	  	$	52,478	  	$	49,553	
 	  			  			
Diluted book value per ordinary share (2) 	  	$	31.36	  	$	29.46	

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

 
									
 	  	Three Months Ended
March 31
	 	
 	  	2004
	 	 	2003
	 	
Gross premiums written	  	$	4,416	 	 	$	4,113	 	
Net premiums written	  	 	3,238	 	 	 	2,930	 	
Net premiums earned	  	 	2,600	 	 	 	2,072	 	
			
Losses and loss expenses	  	 	1,542	 	 	 	1,283	 	
Life and annuity benefits	  	 	42	 	 	 	48	 	
Policy acquisition costs	  	 	365	 	 	 	296	 	
Administrative expenses’	  	 	315	 	 	 	260	 	
 	  				 				
Underwriting income (loss)	  	 	336	 	 	 	185	 	
Net investment income	  	 	238	 	 	 	206	 	
Other income (expense)	  	 	(17	)	 	 	(6	)	
Interest expense	  	 	44	 	 	 	45	 	
Income tax expense (benefit)	  	 	102	 	 	 	61	 	
 	  				 				
Income (loss) excluding net realized gains (losses) (1)	  	 	411	 	 	 	279	 	
Net realized gains (losses)	  	 	57	 	 	 	(40	)	
Tax effect of net realized gains (losses)	  	 	(21	)	 	 	8	 	
 	  				 				
Net income (loss)	  	 	447	 	 	 	247	 	
Preference shares dividend	  	 	(11	)	 	 	—  	 	
FELINE PRIDE dividend	  	 	—  	 	 	 	(7	)	
 	  				 				
Net income (loss) available to holders of ordinary shares	  	$	436	 	 	$	240	 	

Diluted earnings per share:	  	 	 	 	 	 	 	 	
Income (loss) excluding net realized gains (losses) (1)	  	 	$1.40	 	 	 	$1.02	 	
Net income (loss)	  	 	$1.53	 	 	 	$0.90	 	
			
Weighted average diluted shares outstanding	  	 	284,289,568	 	 	 	268,040,665	 	
			
Loss and loss expense ratio	  	 	60.5	%	 	 	63.4	%	
Policy acquisition cost ratio	  	 	14.1	%	 	 	14.4	%	
Administrative expense ratio	  	 	12.3	%	 	 	12.8	%	
Combined ratio	  	 	86.9	%	 	 	90.6	%	

Ratios exclude life reinsurance business

 
 
Page 4/5

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

 
									
 	  	Three Months Ended
March 31
	 	
 	  	2004
	 	 	2003

Gross Premiums Written
 	  	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,905	 	 	$	1,664	 	
Insurance—Overseas General	  	 	1,674	 	 	 	1,406	 	
Global Reinsurance*	  	 	629	 	 	 	511	 	
Financial Services	  	 	208	 	 	 	532	 	
 	  				 				
Total	  	$	4,416	 	 	$	4,113	 	

Net Premiums Written
 	  	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,212	 	 	$	933	 	
Insurance—Overseas General	  	 	1,198	 	 	 	981	 	
Global Reinsurance*	  	 	620	 	 	 	490	 	
Financial Services	  	 	208	 	 	 	526	 	
 	  				 				
Total	  	$	3,238	 	 	$	2,930	 	

Net Premiums Earned
 	  	 	 	 	 	 	 	 	
Insurance—North American	  	$	1,007	 	 	$	753	 	
Insurance—Overseas General	  	 	1,034	 	 	 	814	 	
Global Reinsurance*	  	 	380	 	 	 	296	 	
Financial Services	  	 	179	 	 	 	209	 	
 	  				 				
Total	  	$	2,600	 	 	$	2,072	 	

Income (Loss) Excluding Net Realized Gains (Losses) (1) 
 	  	 	 	 	 	 	 	 	
Insurance—North American	  	$	148	 	 	$	120	 	
Insurance—Overseas General	  	 	112	 	 	 	65	 	
Global Reinsurance*	  	 	122	 	 	 	89	 	
Financial Services	  	 	85	 	 	 	59	 	
Corporate	  	 	(56	)	 	 	(54	)	
 	  				 				
Total	  	$	411	 	 	$	279	 	

 
*	Includes both property and casualty reinsurance and life reinsurance	
 
# # #

 
Page 5/5

Table of Contents
EXHIBIT 99.2
 
Financial Supplement
March 31, 2004

Investor Contact
Helen M. Wilson
Phone: (441) 299-9283
Fax: (441) 292-8675	  	This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.	
email: investorrelations@ace.bm	  	Cautionary Statement Regarding Forward-Looking Statements:	
 	  	Any forward-looking statements made in this financial supplement reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Company’s forward-looking statements concerning exposures, reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience which differs from the Company’s assumptions, uncertainties in the reserving or settlement process, new theories of liability, planned public offerings, judicial and legislative developments, litigation tactics, credit developments among reinsurers and the Company’s forward-looking statements concerning the maturity profile of CDO’s could change if a transaction is unwound early and settlement is reached. Other factors that could affect forward-looking statements are identified in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, the Company’s quarterly reports on Form 10-Q and in the Company’s earnings press release, which are available on the Company’s website.	
		
 	  	Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.	

Table of Contents
ACE Limited
 Financial Supplement Table of Contents

 	  	 	  	Page
	
I.	  	Financial Highlights	  	 	
 	  	-  Consolidated Financial Highlights	  	1	
			
II.	  	Consolidated Results	  	 	
 	  	-  Consolidated Results - Consecutive Quarters	  	2-3	
 	  	-  Computation of Basic and Diluted Earnings Per Share	  	4	
 	  	-  Summary Consolidated Balance Sheets	  	5	
 	  	-  Consolidated Premiums by Line of Business	  	6	
 	  	-  Consolidating Statement of Operations	  	7	
			
III.	  	Segment Results	  	 	
 	  	-  Insurance-North American	  	8	
 	  	-  Insurance-Overseas General	  	9-10	
 	  	-  Global Reinsurance	  	11-12	
 	  	-  Financial Services	  	13-14	
 	  	-  Financial Guaranty Profile	  	15-16	
 	  	-  Financial Services Portfolio	  	17-20	
			
IV.	  	Balance Sheet Details	  	 	
 	  	-  Loss Reserve Rollforward	  	21	
 	  	-  Asbestos and Environmental Reserves	  	22	
 	  	-  Reinsurance Recoverable Analysis	  	23-26	
 	  	-  Investment Portfolio	  	27-28	
 	  	-  Realized and Unrealized Gains (Losses)	  	29	
 	  	-  Capital Structure	  	30	
			
V.	  	Other Disclosures	  	 	
 	  	-  Non-GAAP Financial Measures	  	31	
 	  	-  Diluted Book Value per Ordinary Share	  	32	
 	  	-  Comprehensive Income	  	33	
 	  	-  Glossary	  	34	

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

 	  	Three months
ended March 31
	 	 	% Change
1Q-04 vs.
1Q-03
	 	
 	  	2004
	 	 	2003
	 	 			
Gross premiums written	  	$	4,416	 	 	$	4,113	 	 	7	%	
Net premiums written	  	$	3,238	 	 	$	2,930	 	 	11	%	
Net premiums earned	  	$	2,600	 	 	$	2,072	 	 	25	%	
Net investment income	  	$	238	 	 	$	206	 	 	16	%	
Income excluding net realized gains (losses)	  	$	411	 	 	$	279	 	 	47	%	
Net income	  	$	447	 	 	$	247	 	 	81	%	
Comprehensive income	  	$	581	 	 	$	345	 	 	68	%	
Operating cash flow	  	$	1,172	 	 	$	600	 	 	96	%	
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	60.5	%	 	 	63.4	%	 	 	 	
Underwriting and administrative expense ratio	  	 	26.4	%	 	 	27.2	%	 	 	 	
 	  				 				 	 	 	
Combined ratio	  	 	86.9	%	 	 	90.6	%	 	 	 	
Annualized ROE*	  	 	18.7	%	 	 	16.7	%	 	 	 	
Annualized ROE, excluding FAS 115	  	 	20.4	%	 	 	18.1	%	 	 	 	
Diluted earnings per share	  	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	1.40	 	 	$	1.02	 	 	37	%	
Net income	  	$	1.53	 	 	$	0.90	 	 	70	%	
Diluted book value per ordinary share	  	$	31.36	 	 	$	25.14	 	 	25	%	
Diluted tangible book value per ordinary share	  	$	22.41	 	 	$	15.72	 	 	43	%	
Weighted average diluted ordinary shares outstanding	  	 	284.3	 	 	 	268.0	 	 	6	%	
Debt/ total capitalization	  	 	16.1	%	 	 	20.2	%	 	 	 	
 
*	Calculated using income excluding net realized gains (losses).	
 
Page 1

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

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Consolidated Property and Casualty Excluding Financial Services (1) 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	4,155	 	 	$	3,330	 	 	$	3,295	 	 	$	3,241	 	 	$	3,532	 	 	$	13,398	 	
Net premiums written	  	 	2,979	 	 	 	2,250	 	 	 	2,154	 	 	 	2,230	 	 	 	2,357	 	 	 	8,991	 	
Net premiums earned	  	 	2,370	 	 	 	2,307	 	 	 	2,146	 	 	 	2,049	 	 	 	1,815	 	 	 	8,317	 	
Losses and loss expenses	  	 	1,456	 	 	 	1,429	 	 	 	1,375	 	 	 	1,298	 	 	 	1,122	 	 	 	5,224	 	
Policy acquisition costs	  	 	349	 	 	 	363	 	 	 	321	 	 	 	315	 	 	 	281	 	 	 	1,280	 	
Administrative expenses	  	 	290	 	 	 	295	 	 	 	271	 	 	 	266	 	 	 	241	 	 	 	1,073	 	
 	  				 				 				 				 				 				
P& C underwriting income	  	$	275	 	 	$	220	 	 	$	179	 	 	$	170	 	 	$	171	 	 	$	740	 	
Financial Services underwriting income	  	 	58	 	 	 	4	 	 	 	22	 	 	 	17	 	 	 	19	 	 	 	62	 	
Life underwriting income (loss) excluding investment income	  	 	3	 	 	 	(2	)	 	 	(4	)	 	 	(5	)	 	 	(5	)	 	 	(16	)	
Net investment income	  	 	238	 	 	 	228	 	 	 	216	 	 	 	211	 	 	 	206	 	 	 	861	 	
Other income (expense)	  	 	(17	)	 	 	(19	)	 	 	(3	)	 	 	1	 	 	 	(6	)	 	 	(27	)	
Interest expense	  	 	44	 	 	 	44	 	 	 	45	 	 	 	43	 	 	 	45	 	 	 	177	 	
Income tax expense	  	 	102	 	 	 	59	 	 	 	61	 	 	 	65	 	 	 	61	 	 	 	246	 	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	$	411	 	 	$	328	 	 	$	304	 	 	$	286	 	 	$	279	 	 	$	1,197	 	
Net realized gains (losses)	  	 	57	 	 	 	128	 	 	 	57	 	 	 	107	 	 	 	(40	)	 	 	252	 	
Tax effect of net realized gains (losses)	  	 	(21	)	 	 	(12	)	 	 	(6	)	 	 	(22	)	 	 	8	 	 	 	(32	)	
 	  				 				 				 				 				 				
Net income	  	$	447	 	 	$	444	 	 	$	355	 	 	$	371	 	 	$	247	 	 	$	1,417	 	
 	  				 				 				 				 				 				
% Change versus prior year period (1) 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	18	%	 	 	13	%	 	 	11	%	 	 	25	%	 	 	36	%	 	 	21	%	
Net premiums written	  	 	26	%	 	 	32	%	 	 	27	%	 	 	46	%	 	 	59	%	 	 	40	%	
Net premiums earned	  	 	31	%	 	 	41	%	 	 	44	%	 	 	55	%	 	 	65	%	 	 	50	%	
Other ratios (1) 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	72	%	 	 	68	%	 	 	65	%	 	 	69	%	 	 	67	%	 	 	67	%	
Effective tax rate	  	 	20	%	 	 	15	%	 	 	17	%	 	 	19	%	 	 	18	%	 	 	17	%	
ROE	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Annualized ROE	  	 	18.7	%	 	 	15.8	%	 	 	15.2	%	 	 	15.6	%	 	 	16.7	%	 	 	15.8	%	
Annualized ROE, excluding FAS 115	  	 	20.40	%	 	 	17.3	%	 	 	16.8	%	 	 	17.2	%	 	 	18.1	%	 	 	17.2	%	
 
(1)	Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. 	
 
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Table of Contents
ACE Limited
Consolidated Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
ACE Limited Consolidated

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	60.5	%	 	 	66.8	%	 	 	64.6	%	 	 	64.5	%	 	 	63.4	%	 	 	65.0	%	
Policy acquisition cost ratio	  	 	14.1	%	 	 	13.6	%	 	 	14.4	%	 	 	14.6	%	 	 	14.4	%	 	 	14.2	%	
Administrative expense ratio	  	 	12.3	%	 	 	11.5	%	 	 	12.4	%	 	 	12.6	%	 	 	12.8	%	 	 	12.3	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	86.9	%	 	 	91.9	%	 	 	91.4	%	 	 	91.7	%	 	 	90.6	%	 	 	91.5	%	

Consolidated Property and Casualty Excluding Financial Services (1) 	 	
 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	61.5	%	 	 	61.9	%	 	 	64.0	%	 	 	63.4	%	 	 	61.8	%	 	 	62.8	%	
Policy acquisition cost ratio	  	 	14.7	%	 	 	15.8	%	 	 	15.0	%	 	 	15.3	%	 	 	15.5	%	 	 	15.4	%	
Administrative expense ratio	  	 	12.2	%	 	 	12.8	%	 	 	12.6	%	 	 	13.0	%	 	 	13.3	%	 	 	12.9	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	88.4	%	 	 	90.5	%	 	 	91.6	%	 	 	91.7	%	 	 	90.6	%	 	 	91.1	%	
 	  				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Catastrophe and other large losses	  	$	—  	 	 	$	35	 	 	$	42	 	 	$	30	 	 	$	5	 	 	$	112	 	
Prior period development (2)	  	$	(6	)	 	$	14	 	 	$	62	 	 	$	21	 	 	$	24	 	 	$	121	 	
 
(1)	Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.	
 
(2)	See Financial Services schedule for prior period development related to that segment.	
 
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Table of Contents
 ACE Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)

 	  	Three months ended March 31
	 	
 	  	2004
	 	 	2003
	 	
Numerator	  	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	411	 	 	$	279	 	
Perpetual preferred dividend	  	 	(11	)	 	 	—  	 	
Mezzanine equity dividend	  	 	—  	 	 	 	(7	)	
 	  				 				
Income to ordinary shares, excl. net realized gains (losses)	  	 	400	 	 	 	272	 	
Net realized gains (losses), net of income tax	  	 	36	 	 	 	(32	)	
 	  				 				
Net income available to the holders of ordinary shares	  	$	436	 	 	$	240	 	
 	  				 				
Rollforward of ordinary shares	  	 	 	 	 	 	 	 	
Ordinary shares - beginning of period	  	 	279,897,193	 	 	 	262,679,356	 	
Issued under employee stock purchase plan	  	 	125,631	 	 	 	135,803	 	
Stock (cancelled) granted	  	 	1,259,605	 	 	 	1,492,847	 	
Issued for option exercises	  	 	1,432,480	 	 	 	183,813	 	
 	  				 				
Ordinary shares - end of period	  	 	282,714,909	 	 	 	264,491,819	 	
 	  				 				
Denominator	  	 	 	 	 	 	 	 	
Weighted average shares outstanding	  	 	278,937,204	 	 	 	260,986,223	 	
Dilutive effect of mezzanine equity	  	 	—  	 	 	 	916,016	 	
Effect of other dilutive securities	  	 	5,352,364	 	 	 	6,138,426	 	
 	  				 				
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	284,289,568	 	 	 	268,040,665	 	
 	  				 				
Basic earnings per share	  	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	1.43	 	 	$	1.04	 	
Net realized gains (losses)	  	 	0.13	 	 	 	(0.12	)	
 	  				 				
Net income	  	$	1.56	 	 	$	0.92	 	
 	  				 				
Diluted earnings per share	  	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	1.40	 	 	$	1.02	 	
Net realized gains (losses)	  	 	0.13	 	 	 	(0.12	)	
 	  				 				
Net income	  	$	1.53	 	 	$	0.90	 	

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Table of Contents
 ACE Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars)

 	  	March 31
2004
	  	December 31
2003
	
 	  	(Unaudited)	  	(Audited)	
Assets	  	 	 	  	 	 	
Fixed maturities available for sale, at fair value	  	$	19,920	  	$	18,645	
Equity securities, at fair value	  	 	539	  	 	544	
Securities on loan, at fair value	  	 	1,183	  	 	684	
Short-term investments	  	 	3,290	  	 	2,928	
Other investments, at fair value	  	 	643	  	 	645	
Cash	  	 	614	  	 	562	
 	  			  			
Total investments and cash	  	 	26,189	  	 	24,008	
Insurance and reinsurance balances receivable	  	 	3,493	  	 	2,837	
Reinsurance recoverable	  	 	14,062	  	 	14,081	
Deferred policy acquisition costs	  	 	1,108	  	 	1,005	
Prepaid reinsurance premiums	  	 	1,578	  	 	1,372	
Goodwill	  	 	2,699	  	 	2,711	
Deferred tax assets	  	 	997	  	 	1,090	
Other assets	  	 	2,352	  	 	2,449	
 	  			  			
Total assets	  	$	52,478	  	$	49,553	

Liabilities	  	 	 	  	 	 	
Unpaid losses and loss expenses	  	$	27,697	  	$	27,155	
Unearned premiums	  	 	6,930	  	 	6,051	
Future policy benefits for life and annuity contracts	  	 	496	  	 	492	
Insurance and reinsurance balances payable	  	 	2,145	  	 	1,903	
Deposit liabilities	  	 	217	  	 	212	
Securities lending collateral	  	 	1,208	  	 	698	
Payable for investments purchased	  	 	570	  	 	369	
Accounts payable, accrued expenses and other liabilities	  	 	1,436	  	 	1,468	
Short-term debt	  	 	546	  	 	546	
Long-term debt	  	 	1,349	  	 	1,349	
Trust preferred securities	  	 	487	  	 	475	
 	  			  			
Total liabilities	  	 	43,081	  	 	40,718	
			
Shareholders’ equity	  	 	 	  	 	 	
Total shareholders’ equity, excl. AOCI	  	 	8,543	  	 	8,115	
Accumulated other comprehensive income (AOCI)	  	 	854	  	 	720	
 	  			  			
Total shareholders’ equity	  	 	9,397	  	 	8,835	
 	  			  			
Total liabilities and shareholders’ equity	  	$	52,478	  	$	49,553	
 	  			  			
Diluted book value per ordinary share	  	$	31.36	  	$	29.46	
Diluted tangible book value per ordinary share	  	$	22.41	  	$	20.25	
 
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Table of Contents
 ACE Limited
Consolidated Premiums by Line of Business
(in millions of U.S. dollars)
(Unaudited)
 
ACE Limited Consolidated

 	  	1Q-04
	 	 	% of
Total
Consolidated
	 	 	1Q-03
	  	% of
Total
Consolidated
	 	 	% Change
1Q-04 vs.
1Q-03
	 	
Net premiums written	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	
Property and all other	  	 	988	 	 	30	%	 	$	904	  	31	%	 	20	%	
Casualty	  	 	1,698	 	 	52	%	 	 	1,203	  	41	%	 	34	%	
Personal accident	  	 	283	 	 	9	%	 	 	250	  	9	%	 	13	%	
 	  				 			 			  			 			
Total P&C	  	 	2,979	 	 	91	%	 	 	2,357	  	81	%	 	26	%	
 	  				 			 			  			 			
Global Re - life	  	 	51	 	 	2	%	 	 	47	  	1	%	 	9	%	
Financial guaranty	  	 	(7	)	 	0	%	 	 	120	  	4	%	 	-106	%	
Financial solutions	  	 	215	 	 	7	%	 	 	406	  	14	%	 	-47	%	
 	  				 			 			  			 			
Total Consolidated	  	$	3,238	 	 	100	%	 	$	2,930	  	100	%	 	11	%	

 	  	1Q-04
	 	 	% of
Total
Consolidated
	 	 	1Q-03
	  	% of
Total
Consolidated
	 	 	% Change
1Q-04 vs.
1Q-03
	 	
Net premiums earned	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	
Property and all other	  	$	752	 	 	29	%	 	$	728	  	35	%	 	19	%	
Casualty	  	 	1,363	 	 	52	%	 	 	870	  	42	%	 	44	%	
Personal accident	  	 	255	 	 	10	%	 	 	217	  	10	%	 	18	%	
 	  				 			 			  			 			
Total P&C	  	 	2,370	 	 	91	%	 	 	1,815	  	87	%	 	31	%	
 	  				 			 			  			 			
Global Re - life	  	 	51	 	 	2	%	 	 	48	  	2	%	 	6	%	
Financial guaranty	  	 	87	 	 	3	%	 	 	78	  	4	%	 	12	%	
Financial solutions	  	 	92	 	 	4	%	 	 	131	  	7	%	 	-30	%	
 	  				 			 			  			 			
Total Consolidated	  	$	2,600	 	 	100	%	 	$	2,072	  	100	%	 	25	%	

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Table of Contents
 ACE Limited
Consolidating Statement of Operations
Three months ended March 31, 2004 and 2003
(in millions of U.S. dollars)
(Unaudited)

 	  	Insurance -
North
American
	 	 	Insurance -
Overseas
General
	 	 	Global
Reinsurance
	 	 	Corporate
& Other
	 	 	Consolidated
P&C
	 	 	Financial
Services
	 	 	ACE
Consolidated
	 	
March 31, 2004	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	1,905	 	 	$	1,674	 	 	$	576	 	 	$	—  	 	 	$	4,155	 	 	$	208	 	 	$	4,363	 	
Net premiums written	  	 	1,212	 	 	 	1,198	 	 	 	569	 	 	 	—  	 	 	 	2,979	 	 	 	208	 	 	 	3,187	 	
Net premiums earned	  	 	1,007	 	 	 	1,034	 	 	 	329	 	 	 	—  	 	 	 	2,370	 	 	 	179	 	 	 	2,549	 	
Losses and loss expenses	  	 	696	 	 	 	601	 	 	 	159	 	 	 	—  	 	 	 	1,456	 	 	 	86	 	 	 	1,542	 	
Policy acquisition costs	  	 	101	 	 	 	184	 	 	 	64	 	 	 	—  	 	 	 	349	 	 	 	11	 	 	 	360	 	
Administrative expenses	  	 	103	 	 	 	138	 	 	 	19	 	 	 	30	 	 	 	290	 	 	 	24	 	 	 	314	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	 	107	 	 	 	111	 	 	 	87	 	 	 	(30	)	 	 	275	 	 	 	58	 	 	 	333	 	
Life underwriting income	  	 	—  	 	 	 	—  	 	 	 	11	 	 	 	—  	 	 	 	11	 	 	 	—  	 	 	 	11	 	
Net investment income - property and casualty	  	 	104	 	 	 	48	 	 	 	27	 	 	 	(2	)	 	 	177	 	 	 	53	 	 	 	230	 	
Other income (expense)	  	 	(3	)	 	 	(3	)	 	 	—  	 	 	 	—  	 	 	 	(6	)	 	 	(11	)	 	 	(17	)	
Interest expense	  	 	5	 	 	 	—  	 	 	 	—  	 	 	 	37	 	 	 	42	 	 	 	2	 	 	 	44	 	
Income tax expense (benefit)	  	 	55	 	 	 	44	 	 	 	3	 	 	 	(13	)	 	 	89	 	 	 	13	 	 	 	102	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	 	148	 	 	 	112	 	 	 	122	 	 	 	(56	)	 	 	326	 	 	 	85	 	 	 	411	 	
Net realized gains (losses)	  	 	52	 	 	 	24	 	 	 	(10	)	 	 	(14	)	 	 	52	 	 	 	5	 	 	 	57	 	
Tax effect of net realized gains (losses)	  	 	(7	)	 	 	(7	)	 	 	—  	 	 	 	—  	 	 	 	(14	)	 	 	(7	)	 	 	(21	)	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	193	 	 	$	129	 	 	$	112	 	 	$	(70	)	 	$	364	 	 	$	83	 	 	$	447	 	
 	  				 				 				 				 				 				 				
March 31, 2003	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	1,664	 	 	$	1,406	 	 	$	462	 	 	$	—  	 	 	$	3,532	 	 	$	532	 	 	$	4,064	 	
Net premiums written	  	 	933	 	 	 	981	 	 	 	443	 	 	 	—  	 	 	 	2,357	 	 	 	526	 	 	 	2,883	 	
Net premiums earned	  	 	753	 	 	 	814	 	 	 	248	 	 	 	—  	 	 	 	1,815	 	 	 	209	 	 	 	2,024	 	
Losses and loss expenses	  	 	512	 	 	 	494	 	 	 	116	 	 	 	—  	 	 	 	1,122	 	 	 	161	 	 	 	1,283	 	
Policy acquisition costs	  	 	83	 	 	 	152	 	 	 	46	 	 	 	—  	 	 	 	281	 	 	 	11	 	 	 	292	 	
Administrative expenses	  	 	88	 	 	 	114	 	 	 	15	 	 	 	24	 	 	 	241	 	 	 	18	 	 	 	259	 	
 	  				 				 				 				 				 				 				
Underwriting income (loss)	  	 	70	 	 	 	54	 	 	 	71	 	 	 	(24	)	 	 	171	 	 	 	19	 	 	 	190	 	
Life underwriting income	  	 	—  	 	 	 	—  	 	 	 	2	 	 	 	—  	 	 	 	2	 	 	 	—  	 	 	 	2	 	
Net investment income - property and casualty	  	 	101	 	 	 	35	 	 	 	19	 	 	 	(7	)	 	 	148	 	 	 	51	 	 	 	199	 	
Other income (expense)	  	 	(6	)	 	 	(1	)	 	 	1	 	 	 	—  	 	 	 	(6	)	 	 	—  	 	 	 	(6	)	
Interest expense	  	 	6	 	 	 	—  	 	 	 	—  	 	 	 	37	 	 	 	43	 	 	 	2	 	 	 	45	 	
Income tax expense (benefit)	  	 	39	 	 	 	23	 	 	 	4	 	 	 	(14	)	 	 	52	 	 	 	9	 	 	 	61	 	
 	  				 				 				 				 				 				 				
Income (loss) excluding net realized gains (losses)	  	 	120	 	 	 	65	 	 	 	89	 	 	 	(54	)	 	 	220	 	 	 	59	 	 	 	279	 	
Net realized gains (losses)	  	 	(18	)	 	 	(13	)	 	 	3	 	 	 	(9	)	 	 	(37	)	 	 	(3	)	 	 	(40	)	
Tax effect of net realized gains (losses)	  	 	3	 	 	 	5	 	 	 	—  	 	 	 	—  	 	 	 	8	 	 	 	—  	 	 	 	8	 	
 	  				 				 				 				 				 				 				
Net income (loss)	  	$	105	 	 	$	57	 	 	$	92	 	 	$	(63	)	 	$	191	 	 	$	56	 	 	$	247	 	

Page 7

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
 Insurance - North American

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Gross premiums written	  	$	1,905	 	 	$	1,764	 	 	$	1,819	 	 	$	1,648	 	 	$	1,664	 	 	$	6,895	 	
Net premiums written	  	 	1,212	 	 	 	1,048	 	 	 	1,065	 	 	 	969	 	 	 	933	 	 	 	4,015	 	
Net premiums earned	  	 	1,007	 	 	 	991	 	 	 	990	 	 	 	920	 	 	 	753	 	 	 	3,654	 	
Losses and loss expenses	  	 	696	 	 	 	660	 	 	 	712	 	 	 	637	 	 	 	512	 	 	 	2,521	 	
Policy acquisition costs	  	 	101	 	 	 	108	 	 	 	95	 	 	 	101	 	 	 	83	 	 	 	387	 	
Administrative expenses	  	 	103	 	 	 	109	 	 	 	103	 	 	 	102	 	 	 	88	 	 	 	402	 	
 	  				 				 				 				 				 				
Underwriting income	  	 	107	 	 	 	114	 	 	 	80	 	 	 	80	 	 	 	70	 	 	 	344	 	
Net investment income - property and casualty	  	 	104	 	 	 	103	 	 	 	98	 	 	 	101	 	 	 	101	 	 	 	403	 	
Other income (expense)	  	 	(3	)	 	 	(8	)	 	 	—  	 	 	 	—  	 	 	 	(6	)	 	 	(14	)	
Interest expense	  	 	5	 	 	 	6	 	 	 	5	 	 	 	5	 	 	 	6	 	 	 	22	 	
Income tax expense (benefit)	  	 	55	 	 	 	50	 	 	 	48	 	 	 	42	 	 	 	39	 	 	 	179	 	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	 	148	 	 	 	153	 	 	 	125	 	 	 	134	 	 	 	120	 	 	 	532	 	
Net realized gains (losses)	  	 	52	 	 	 	24	 	 	 	8	 	 	 	25	 	 	 	(18	)	 	 	39	 	
Tax effect of net realized gains (losses)	  	 	(7	)	 	 	—  	 	 	 	—  	 	 	 	(3	)	 	 	3	 	 	 	—  	 	
 	  				 				 				 				 				 				
Net income	  	$	193	 	 	$	177	 	 	$	133	 	 	$	156	 	 	$	105	 	 	$	571	 	

Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	69.1	%	 	 	66.6	%	 	 	71.9	%	 	 	69.2	%	 	 	68.0	%	 	 	69.0	%	
Policy acquisition cost ratio	  	 	10.0	%	 	 	10.9	%	 	 	9.6	%	 	 	10.9	%	 	 	11.0	%	 	 	10.6	%	
Administrative expense ratio	  	 	10.3	%	 	 	11.1	%	 	 	10.4	%	 	 	11.1	%	 	 	11.6	%	 	 	11.0	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	89.4	%	 	 	88.6	%	 	 	91.9	%	 	 	91.2	%	 	 	90.6	%	 	 	90.6	%	

Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses (before tax)	  	$	—  	 	 	$	—  	 	 	$	20	 	 	$	—  	 	 	$	—  	 	 	$	20	 	
Prior period development	  	$	15	 	 	$	14	 	 	$	30	 	 	$	22	 	 	$	25	 	 	$	91	 	
							
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	14	%	 	 	8	%	 	 	2	%	 	 	15	%	 	 	32	%	 	 	13	%	
Net premiums written	  	 	30	%	 	 	28	%	 	 	23	%	 	 	35	%	 	 	82	%	 	 	38	%	
Net premiums earned	  	 	34	%	 	 	34	%	 	 	51	%	 	 	52	%	 	 	59	%	 	 	48	%	
							
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	64	%	 	 	59	%	 	 	59	%	 	 	59	%	 	 	56	%	 	 	58	%	
 
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Table of Contents
ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Insurance - Overseas General

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Gross premiums written	  	$	1,674	 	 	$	1,341	 	 	$	1,200	 	 	$	1,244	 	 	$	1,406	 	 	$	5,191	 	
Net premiums written	  	 	1,198	 	 	 	982	 	 	 	872	 	 	 	916	 	 	 	981	 	 	 	3,751	 	
Net premiums earned	  	 	1,034	 	 	 	1,007	 	 	 	882	 	 	 	860	 	 	 	814	 	 	 	3,563	 	
Losses and loss expenses	  	 	601	 	 	 	603	 	 	 	529	 	 	 	518	 	 	 	494	 	 	 	2,144	 	
Policy acquisition costs	  	 	184	 	 	 	197	 	 	 	170	 	 	 	163	 	 	 	152	 	 	 	682	 	
Administrative expenses	  	 	138	 	 	 	130	 	 	 	121	 	 	 	121	 	 	 	114	 	 	 	486	 	
 	  				 				 				 				 				 				
Underwriting income	  	$	111	 	 	$	77	 	 	$	62	 	 	$	58	 	 	$	54	 	 	$	251	 	
Net investment income - property and casualty	  	 	48	 	 	 	44	 	 	 	39	 	 	 	37	 	 	 	35	 	 	 	155	 	
Other income (expense)	  	 	(3	)	 	 	(3	)	 	 	(3	)	 	 	—  	 	 	 	(1	)	 	 	(7	)	
Interest expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Income tax expense	  	 	44	 	 	 	24	 	 	 	12	 	 	 	25	 	 	 	23	 	 	 	84	 	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	$	112	 	 	$	94	 	 	$	86	 	 	$	70	 	 	$	65	 	 	$	315	 	
Net realized gains (losses)	  	 	24	 	 	 	1	 	 	 	4	 	 	 	2	 	 	 	(13	)	 	 	(6	)	
Tax effect of net realized gains (losses)	  	 	(7	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	5	 	 	 	5	 	
 	  				 				 				 				 				 				
Net income	  	$	129	 	 	$	95	 	 	$	90	 	 	$	72	 	 	$	57	 	 	$	314	 	
 	  				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	58.1	%	 	 	59.8	%	 	 	59.9	%	 	 	60.3	%	 	 	60.7	%	 	 	60.2	%	
Policy acquisition cost ratio	  	 	17.9	%	 	 	19.6	%	 	 	19.3	%	 	 	18.9	%	 	 	18.7	%	 	 	19.2	%	
Administrative expense ratio	  	 	13.3	%	 	 	12.9	%	 	 	13.7	%	 	 	14.0	%	 	 	14.0	%	 	 	13.6	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	89.3	%	 	 	92.3	%	 	 	92.9	%	 	 	93.2	%	 	 	93.4	%	 	 	93.0	%	
 	  				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses (before tax)	  	$	—  	 	 	$	—  	 	 	$	10	 	 	$	—  	 	 	$	—  	 	 	$	10	 	
Prior period development	  	$	(8	)	 	$	11	 	 	$	35	 	 	$	12	 	 	$	(1	)	 	$	57	 	
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	19	%	 	 	11	%	 	 	19	%	 	 	32	%	 	 	46	%	 	 	26	%	
Net premiums written	  	 	22	%	 	 	23	%	 	 	26	%	 	 	49	%	 	 	60	%	 	 	38	%	
Net premiums earned	  	 	27	%	 	 	50	%	 	 	36	%	 	 	52	%	 	 	60	%	 	 	49	%	
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	72	%	 	 	73	%	 	 	73	%	 	 	74	%	 	 	70	%	 	 	72	%	
 
Page 9

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)
 
Insurance - Overseas General

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	$	391	 	 	$	458	 	 	$	351	 	 	$	422	 	 	$	346	 	 	$	1,577	 	
ACE International	  	 	1,283	 	 	 	883	 	 	 	849	 	 	 	822	 	 	 	1,060	 	 	$	3,614	 	
 	  				 				 				 				 				 				
Total	  	$	1,674	 	 	$	1,341	 	 	$	1,200	 	 	$	1,244	 	 	$	1,406	 	 	$	5,191	 	
 	  				 				 				 				 				 				
Net premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	$	272	 	 	$	294	 	 	$	253	 	 	$	295	 	 	$	256	 	 	$	1,098	 	
ACE International	  	 	926	 	 	 	688	 	 	 	619	 	 	 	621	 	 	 	725	 	 	$	2,653	 	
 	  				 				 				 				 				 				
Total	  	$	1,198	 	 	$	982	 	 	$	872	 	 	$	916	 	 	$	981	 	 	$	3,751	 	
 	  				 				 				 				 				 				
Net premiums earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	$	280	 	 	$	295	 	 	$	244	 	 	$	256	 	 	$	248	 	 	$	1,043	 	
ACE International	  	 	754	 	 	 	712	 	 	 	638	 	 	 	604	 	 	 	566	 	 	$	2,520	 	
 	  				 				 				 				 				 				
Total	  	$	1,034	 	 	$	1,007	 	 	$	882	 	 	$	860	 	 	$	814	 	 	$	3,563	 	
 	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	 	69.6	%	 	 	64.2	%	 	 	72.1	%	 	 	69.9	%	 	 	74.0	%	 	 	69.6	%	
ACE International	  	 	72.2	%	 	 	77.9	%	 	 	72.9	%	 	 	75.5	%	 	 	68.4	%	 	 	73.4	%	
 	  				 				 				 				 				 				
Total NPW/GPW	  	 	71.6	%	 	 	73.2	%	 	 	72.7	%	 	 	73.6	%	 	 	69.8	%	 	 	72.3	%	
 	  				 				 				 				 				 				
Loss ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	 	60.6	%	 	 	63.2	%	 	 	61.2	%	 	 	61.4	%	 	 	61.2	%	 	 	61.8	%	
ACE International	  	 	57.2	%	 	 	58.4	%	 	 	59.4	%	 	 	59.8	%	 	 	60.4	%	 	 	59.5	%	
 	  				 				 				 				 				 				
Total loss ratio	  	 	58.1	%	 	 	59.8	%	 	 	59.9	%	 	 	60.3	%	 	 	60.7	%	 	 	60.2	%	
 	  				 				 				 				 				 				
Expense ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	 	33.0	%	 	 	33.1	%	 	 	35.7	%	 	 	35.7	%	 	 	36.7	%	 	 	35.3	%	
ACE International	  	 	30.4	%	 	 	32.3	%	 	 	32.0	%	 	 	31.7	%	 	 	30.9	%	 	 	31.8	%	
 	  				 				 				 				 				 				
Total expense ratio	  	 	31.2	%	 	 	32.5	%	 	 	33.0	%	 	 	32.9	%	 	 	32.7	%	 	 	32.8	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ACE Global Markets	  	 	93.6	%	 	 	96.3	%	 	 	96.9	%	 	 	97.1	%	 	 	97.9	%	 	 	97.1	%	
ACE International	  	 	87.6	%	 	 	90.7	%	 	 	91.4	%	 	 	91.5	%	 	 	91.3	%	 	 	91.3	%	
 	  				 				 				 				 				 				
Total combined ratio	  	 	89.3	%	 	 	92.3	%	 	 	92.9	%	 	 	93.2	%	 	 	93.4	%	 	 	93.0	%	

Page 10

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
Global Reinsurance

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Property and casualty	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	$	576	 	 	$	225	 	 	$	276	 	 	$	349	 	 	$	462	 	 	$	1,312	 	
Net premiums written	  	 	569	 	 	 	220	 	 	 	217	 	 	 	345	 	 	 	443	 	 	 	1,225	 	
Net premiums earned	  	 	329	 	 	 	309	 	 	 	274	 	 	 	269	 	 	 	248	 	 	 	1,100	 	
Losses and loss expenses	  	 	159	 	 	 	166	 	 	 	134	 	 	 	143	 	 	 	116	 	 	 	559	 	
Policy acquisition costs	  	 	64	 	 	 	58	 	 	 	56	 	 	 	51	 	 	 	46	 	 	 	211	 	
Administrative expenses	  	 	19	 	 	 	17	 	 	 	16	 	 	 	14	 	 	 	15	 	 	 	62	 	
 	  				 				 				 				 				 				
P&C underwriting income	  	 	87	 	 	 	68	 	 	 	68	 	 	 	61	 	 	 	71	 	 	 	268	 	
Life	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	53	 	 	 	49	 	 	 	49	 	 	 	46	 	 	 	49	 	 	 	193	 	
Net premiums written	  	 	51	 	 	 	47	 	 	 	47	 	 	 	44	 	 	 	47	 	 	 	185	 	
Net premiums earned	  	 	51	 	 	 	48	 	 	 	46	 	 	 	42	 	 	 	48	 	 	 	184	 	
Losses and loss expenses	  	 	42	 	 	 	44	 	 	 	45	 	 	 	44	 	 	 	48	 	 	 	181	 	
Policy acquisition costs	  	 	5	 	 	 	5	 	 	 	5	 	 	 	2	 	 	 	4	 	 	 	16	 	
Administrative expenses	  	 	1	 	 	 	1	 	 	 	—  	 	 	 	1	 	 	 	1	 	 	 	3	 	
Net investment income	  	 	8	 	 	 	8	 	 	 	10	 	 	 	8	 	 	 	7	 	 	 	33	 	
 	  				 				 				 				 				 				
Life underwriting income	  	 	11	 	 	 	6	 	 	 	6	 	 	 	3	 	 	 	2	 	 	 	17	 	
Total underwriting income	  	 	98	 	 	 	74	 	 	 	74	 	 	 	64	 	 	 	73	 	 	 	285	 	
Net investment income - property and casualty	  	 	27	 	 	 	24	 	 	 	23	 	 	 	21	 	 	 	19	 	 	 	87	 	
Other income (expense)	  	 	—  	 	 	 	1	 	 	 	1	 	 	 	—  	 	 	 	1	 	 	 	3	 	
Interest expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Income tax expense	  	 	3	 	 	 	4	 	 	 	3	 	 	 	3	 	 	 	4	 	 	 	14	 	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	 	122	 	 	 	95	 	 	 	95	 	 	 	82	 	 	 	89	 	 	 	361	 	
Net realized gains (losses)	  	 	(10	)	 	 	8	 	 	 	10	 	 	 	13	 	 	 	3	 	 	 	34	 	
Tax effect of net realized gains (losses)	  	 	—  	 	 	 	(1	)	 	 	—  	 	 	 	1	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				
Net income	  	$	112	 	 	$	102	 	 	$	105	 	 	$	96	 	 	$	92	 	 	$	395	 	
 	  				 				 				 				 				 				
P&C combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	48.5	%	 	 	53.9	%	 	 	48.9	%	 	 	53.1	%	 	 	46.7	%	 	 	50.9	%	
Policy acquisition cost ratio	  	 	19.4	%	 	 	18.9	%	 	 	20.4	%	 	 	18.8	%	 	 	18.6	%	 	 	19.2	%	
Administrative expense ratio	  	 	5.6	%	 	 	5.5	%	 	 	5.7	%	 	 	5.3	%	 	 	6.0	%	 	 	5.6	%	
 	  				 				 				 				 				 				
P&C combined ratio	  	 	73.5	%	 	 	78.3	%	 	 	75.0	%	 	 	77.2	%	 	 	71.3	%	 	 	75.7	%	
 	  				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses (before tax)	  	$	—  	 	 	$	35	 	 	$	12	 	 	$	30	 	 	$	5	 	 	$	82	 	
Prior period development	  	$	(13	)	 	$	(11	)	 	$	(3	)	 	$	(13	)	 	$	—  	 	 	$	(27	)	
 
Page 11

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)
 
Global Reinsurance - Property & Casualty

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	25	%	 	 	99	%	 	 	48	%	 	 	63	%	 	 	24	%	 	 	48	%	
Net premiums written	  	 	28	%	 	 	134	%	 	 	66	%	 	 	75	%	 	 	25	%	 	 	58	%	
Net premiums earned	  	 	33	%	 	 	42	%	 	 	41	%	 	 	79	%	 	 	116	%	 	 	62	%	
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	99	%	 	 	98	%	 	 	79	%	 	 	99	%	 	 	96	%	 	 	93	%	
							
Global Reinsurance - By Division	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
							
Gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	126	 	 	$	63	 	 	$	60	 	 	$	97	 	 	$	123	 	 	$	343	 	
Tempest USA	  	 	253	 	 	 	148	 	 	 	147	 	 	 	133	 	 	 	100	 	 	 	528	 	
Tempest Bermuda	  	 	197	 	 	 	14	 	 	 	69	 	 	 	119	 	 	 	239	 	 	 	441	 	
 	  				 				 				 				 				 				
Total GPW	  	$	576	 	 	$	225	 	 	$	276	 	 	$	349	 	 	$	462	 	 	$	1,312	 	
 	  				 				 				 				 				 				
Net premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	122	 	 	$	53	 	 	$	52	 	 	$	94	 	 	$	115	 	 	$	314	 	
Tempest USA	  	 	252	 	 	 	148	 	 	 	144	 	 	 	132	 	 	 	99	 	 	 	523	 	
Tempest Bermuda	  	 	195	 	 	 	19	 	 	 	21	 	 	 	119	 	 	 	229	 	 	 	388	 	
 	  				 				 				 				 				 				
Total NPW	  	$	569	 	 	$	220	 	 	$	217	 	 	$	345	 	 	$	443	 	 	$	1,225	 	
 	  				 				 				 				 				 				
Net premiums earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	$	75	 	 	$	72	 	 	$	55	 	 	$	63	 	 	$	69	 	 	$	259	 	
Tempest USA	  	 	169	 	 	 	138	 	 	 	127	 	 	 	112	 	 	 	86	 	 	 	463	 	
Tempest Bermuda	  	 	85	 	 	 	99	 	 	 	92	 	 	 	94	 	 	 	93	 	 	 	378	 	
 	  				 				 				 				 				 				
Total NPE	  	$	329	 	 	$	309	 	 	$	274	 	 	$	269	 	 	$	248	 	 	$	1,100	 	
 	  				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tempest Europe	  	 	88	%	 	 	84	%	 	 	87	%	 	 	97	%	 	 	93	%	 	 	92	%	
Tempest USA	  	 	106	%	 	 	100	%	 	 	98	%	 	 	99	%	 	 	99	%	 	 	99	%	
Tempest Bermuda	  	 	98	%	 	 	136	%	 	 	30	%	 	 	100	%	 	 	96	%	 	 	88	%	
 	  				 				 				 				 				 				
Total NPW/GPW	  	 	99	%	 	 	98	%	 	 	79	%	 	 	99	%	 	 	96	%	 	 	93	%	

Page 12

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
 
 Financial Services

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Gross premiums written	  	$	208	 	 	$	289	 	 	$	107	 	 	$	118	 	 	$	532	 	 	$	1,046	 	
Net premiums written	  	 	208	 	 	 	276	 	 	 	105	 	 	 	132	 	 	 	526	 	 	 	1,039	 	
Net premiums earned	  	 	179	 	 	 	472	 	 	 	205	 	 	 	215	 	 	 	209	 	 	 	1,101	 	
Losses and loss expenses	  	 	86	 	 	 	428	 	 	 	144	 	 	 	161	 	 	 	161	 	 	 	894	 	
Policy acquisition costs	  	 	11	 	 	 	16	 	 	 	17	 	 	 	17	 	 	 	11	 	 	 	61	 	
Administrative expenses	  	 	24	 	 	 	24	 	 	 	22	 	 	 	20	 	 	 	18	 	 	 	84	 	
 	  				 				 				 				 				 				
Underwriting income	  	 	58	 	 	 	4	 	 	 	22	 	 	 	17	 	 	 	19	 	 	 	62	 	
Net investment income	  	 	53	 	 	 	53	 	 	 	49	 	 	 	49	 	 	 	51	 	 	 	202	 	
Other income	  	 	(11	)	 	 	—  	 	 	 	(1	)	 	 	1	 	 	 	—  	 	 	 	—  	 	
Interest expense	  	 	2	 	 	 	1	 	 	 	2	 	 	 	1	 	 	 	2	 	 	 	6	 	
Income tax expense	  	 	13	 	 	 	(1	)	 	 	11	 	 	 	8	 	 	 	9	 	 	 	27	 	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	 	85	 	 	 	57	 	 	 	57	 	 	 	58	 	 	 	59	 	 	 	231	 	
Net realized gains (losses)	  	 	5	 	 	 	92	 	 	 	29	 	 	 	72	 	 	 	(3	)	 	 	190	 	
Tax effect of net realized gains (losses)	  	 	(7	)	 	 	(11	)	 	 	(6	)	 	 	(20	)	 	 	—  	 	 	 	(37	)	
 	  				 				 				 				 				 				
Net income	  	$	83	 	 	$	138	 	 	$	80	 	 	$	110	 	 	$	56	 	 	$	384	 	
 	  				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss and loss expense ratio	  	 	48.0	%	 	 	90.6	%	 	 	70.2	%	 	 	74.9	%	 	 	77.0	%	 	 	81.2	%	
Policy acquisition cost ratio	  	 	5.9	%	 	 	3.2	%	 	 	8.7	%	 	 	7.8	%	 	 	5.2	%	 	 	5.5	%	
Administrative expense ratio	  	 	13.7	%	 	 	5.1	%	 	 	10.6	%	 	 	9.5	%	 	 	8.6	%	 	 	7.7	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	67.6	%	 	 	98.9	%	 	 	89.5	%	 	 	92.2	%	 	 	90.8	%	 	 	94.4	%	
 	  				 				 				 				 				 				
Large losses and other items	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss portfolio transfers (1)	  	$	—  	 	 	$	270	 	 	$	4	 	 	$	—  	 	 	$	—  	 	 	$	274	 	
Prior period development	  	$	(2	)	 	$	44	 	 	$	(2	)	 	$	(9	)	 	$	10	 	 	$	43	 	
							
% Change versus prior year period	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross premiums written	  	 	-61	%	 	 	21	%	 	 	-78	%	 	 	-63	%	 	 	9	%	 	 	-32	%	
Net premiums written	  	 	-60	%	 	 	21	%	 	 	-78	%	 	 	-58	%	 	 	11	%	 	 	-31	%	
Net premiums earned	  	 	-14	%	 	 	62	%	 	 	-45	%	 	 	-6	%	 	 	-11	%	 	 	-2	%	
Other ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net premiums written/gross premiums written	  	 	100	%	 	 	96	%	 	 	98	%	 	 	112	%	 	 	99	%	 	 	99	%	
 
(1)	Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued at 100% loss ratio.	
 
Page 13

Table of Contents
ACE Limited
Segment Results - Consecutive Quarters - 2
(in millions of U.S. dollars)
(Unaudited)
 
Financial Services

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Gross premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	$	(7	)	 	$	158	 	 	$	112	 	 	$	119	 	 	$	121	 	 	$	510	 	
Financial solutions	  	 	215	 	 	 	131	 	 	 	(5	)	 	 	(1	)	 	 	411	 	 	 	536	 	
 	  				 				 				 				 				 				
Total GPW	  	$	208	 	 	$	289	 	 	$	107	 	 	$	118	 	 	$	532	 	 	$	1,046	 	
 	  				 				 				 				 				 				
Net premiums written	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	$	(7	)	 	$	159	 	 	$	111	 	 	$	119	 	 	$	120	 	 	$	509	 	
Financial solutions	  	 	215	 	 	 	117	 	 	 	(6	)	 	 	13	 	 	 	406	 	 	 	530	 	
 	  				 				 				 				 				 				
Total NPW	  	$	208	 	 	$	276	 	 	$	105	 	 	$	132	 	 	$	526	 	 	$	1,039	 	
 	  				 				 				 				 				 				
Net premiums earned	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	$	87	 	 	$	88	 	 	$	80	 	 	$	82	 	 	$	78	 	 	$	328	 	
Financial solutions	  	 	92	 	 	 	384	 	 	 	125	 	 	 	133	 	 	 	131	 	 	 	773	 	
 	  				 				 				 				 				 				
Total NPE	  	$	179	 	 	$	472	 	 	$	205	 	 	$	215	 	 	$	209	 	 	$	1,101	 	
 	  				 				 				 				 				 				
Loss ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	 	18.8	%	 	 	71.3	%	 	 	46.4	%	 	 	49.7	%	 	 	50.1	%	 	 	54.8	%	
Financial solutions	  	 	75.6	%	 	 	95.0	%	 	 	85.4	%	 	 	90.5	%	 	 	92.9	%	 	 	92.3	%	
 	  				 				 				 				 				 				
Total loss ratio	  	 	48.0	%	 	 	90.6	%	 	 	70.2	%	 	 	74.9	%	 	 	77.0	%	 	 	81.2	%	
 	  				 				 				 				 				 				
Expense ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	 	30.9	%	 	 	38.0	%	 	 	33.7	%	 	 	35.3	%	 	 	27.6	%	 	 	33.9	%	
Financial solutions	  	 	9.0	%	 	 	1.5	%	 	 	10.1	%	 	 	6.1	%	 	 	5.7	%	 	 	4.4	%	
 	  				 				 				 				 				 				
Total expense ratio	  	 	19.6	%	 	 	8.3	%	 	 	19.3	%	 	 	17.3	%	 	 	13.8	%	 	 	13.2	%	
 	  				 				 				 				 				 				
Combined ratio	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial guaranty	  	 	49.7	%	 	 	109.3	%	 	 	80.1	%	 	 	85.0	%	 	 	77.7	%	 	 	88.7	%	
Financial solutions	  	 	84.6	%	 	 	96.5	%	 	 	95.5	%	 	 	96.6	%	 	 	98.6	%	 	 	96.7	%	
 	  				 				 				 				 				 				
Total combined ratio	  	 	67.6	%	 	 	98.9	%	 	 	89.5	%	 	 	92.2	%	 	 	90.8	%	 	 	94.4	%	

Page 14

Table of Contents
 ACE Limited
Financial Guaranty Profile
(in millions of U.S. dollars)
(Unaudited)

 	  	Gross Par Written (7)
	 	 	Net Par Outstanding/Average Ratings
	
 	  	Three months ended
March 31, 2004
	 	 	March 31, 2004
	  	December 31, 2003
	
Sector
	  	Par
Outstanding
	  	% of total
	 	 	Par
Outstanding
	  	% of total
	 	 	Average
Rating
	  	Par
Outstanding
	  	% of total
	 	 	Average
Rating
	
Municipal Exposure	  	 	 	  	 	 	 	 	 	  	 	 	 	 	  	 	 	  	 	 	 	 	
Tax Backed	  	$	822	  	18	%	 	$	21,611	  	24	%	 	A+	  	$	21,090	  	24	%	 	A+	
Municipal Utilities	  	 	161	  	3	%	 	 	11,157	  	12	%	 	A+	  	 	11,114	  	13	%	 	A+	
Special Revenue	  	 	207	  	4	%	 	 	9,078	  	10	%	 	A	  	 	9,060	  	10	%	 	A	
Healthcare	  	 	507	  	11	%	 	 	6,028	  	7	%	 	A+	  	 	5,828	  	7	%	 	A	
Structured Municipal (1)	  	 	—  	  	0	%	 	 	3,266	  	4	%	 	AAA	  	 	3,378	  	4	%	 	AAA	
Other Municipal (2)	  	 	236	  	5	%	 	 	2,777	  	3	%	 	A-	  	 	2,378	  	3	%	 	A-	
 	  			  			 			  			 		  			  			 		
Total Municipal	  	$	1,933	  	41	%	 	$	53,917	  	60	%	 	A+	  	$	52,848	  	61	%	 	A	
Non-Municipal Exposure	  	 	 	  	 	 	 	 	 	  	 	 	 	 	  	 	 	  	 	 	 	 	
Senior Layer CDO’s (3)	  	$	67	  	1	%	 	$	16,317	  	18	%	 	AA+	  	$	16,601	  	16	%	 	AA+	
Consumer Receivables (4)	  	 	2,036	  	44	%	 	 	10,696	  	12	%	 	A+	  	 	9,461	  	10	%	 	A	
Single Name Corporate CDS	  	 	—  	  	0	%	 	 	2,081	  	2	%	 	A+	  	 	2,305	  	5	%	 	A+	
Commercial Receivables (5)	  	 	292	  	6	%	 	 	5,478	  	6	%	 	AA-	  	 	5,322	  	4	%	 	A+	
Other Structured Finance (6)	  	 	346	  	7	%	 	 	1,882	  	2	%	 	A+	  	 	1,920	  	3	%	 	A	
Funded Equity CDO’s (3)	  	 	—  	  	0	%	 	 	221	  	0	%	 	NM	  	 	407	  	1	%	 	NM	
 	  			  			 			  			 		  			  			 		
Total Non-Municipal	  	$	2,741	  	59	%	 	$	36,675	  	40	%	 	AA	  	$	36,016	  	39	%	 	AA-	
 	  			  			 			  			 	 	  			  			 	 	
Total Exposure	  	$	4,674	  	100	%	 	$	90,592	  	100	%	 	 	  	$	88,864	  	100	%	 	 	

(1)	Structured Municipal: includes excess of loss reinsurance on portfolios of municipal credits where the company attached in excess of the AAA rating level.	
 
(2)	Other Municipal: primarily includes first mortgage bonds on investor-owned utilities and government-sponsored project finance.	
 
(3)	For ACE, collateralized debt obligations (CDO’s) are structured financings backed by a pool of investment grade assets. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches. Market supply and demand factors influence pricing and the amount and position in the structure where ACE chooses to participate.	
 
(4)	Consumer Receivables: principally includes auto loan receivables, residential mortgage-backed securities and credit card receivables.	
 
(5)	Commercial Receivables: principally includes equipment leases and commercial mortgage-backed securities.	
 
(6)	Other Structured Finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.	
 
(7)	Gross par approximates net par as the company is a net line writer.	
 
Note - Ratings are internally determined based on rating agency guidelines
 
Page 15

Table of Contents
ACE Limited
Financial Guaranty Profile - 2
(in millions of U.S. dollars)
(Unaudited)
 
Distribution by Ratings of Financial Guaranty Portfolio

 	  	At March 31, 2004
	 	
 	  	Net Par
Outstanding
	  	% of total
	 	
AAA	  	$	26,920	  	30	%	
AA	  	 	18,486	  	20	%	
A	  	 	30,202	  	33	%	
BBB	  	 	13,215	  	15	%	
Below investment grade	  	 	1,552	  	2	%	
Funded equity	  	 	217	  	0	%	
 	  			  			
Total	  	$	90,592	  	100	%	

Geographic Distribution of Financial Guaranty Portfolio as of March 31, 2004

 	  	Net Par
Outstanding
	  	% of total
	 	
Domestic	  	 	 	  	 	 	
California	  	$	7,269	  	8.0	%	
New York	  	 	5,580	  	6.2	%	
Texas	  	 	3,273	  	3.6	%	
Illinois	  	 	2,824	  	3.1	%	
Florida	  	 	2,810	  	3.1	%	
New Jersey	  	 	2,216	  	2.4	%	
Pennsylvania	  	 	2,039	  	2.3	%	
Massachusetts	  	 	1,698	  	1.9	%	
Puerto Rico	  	 	1,503	  	1.7	%	
Washington	  	 	1,333	  	1.5	%	
Other - Muni	  	 	19,128	  	21.1	%	
Other - Non Muni	  	 	33,573	  	37.1	%	
 	  			  			
Total Domestic	  	$	83,246	  	91.9	%	
 	  			  			
International	  	 	 	  	 	 	
United Kingdom	  	$	3,749	  	4.1	%	
Australia	  	 	532	  	0.6	%	
Brazil	  	 	352	  	0.4	%	
France	  	 	324	  	0.4	%	
Netherlands	  	 	295	  	0.3	%	
Other	  	 	2,094	  	2.3	%	
 	  			  			
Total International	  	$	7,346	  	8.1	%	
 	  			  			
Net Par Outstanding	  	$	90,592	  	100	%	

Page 16

Table of Contents
 ACE Limited
Financial Services Portfolio
25 Largest Municipal Exposures
(in millions of U.S. dollars)
(Unaudited)

Obligor Name
	  	Net Par
In Force  (1)
	  	Rating
	
California State General Obligation & Leases	  	$	900	  	BBB	
New Jersey State General Obligation & Leases	  	 	724	  	AA	
Long Island Power Authority	  	 	720	  	A-	
New York City General Obligation	  	 	695	  	A	
Denver Colorado Airport System	  	 	632	  	A	
Jefferson County Alabama Sewer	  	 	607	  	A	
Chicago Illinois General Obligation	  	 	589	  	A+	
Puerto Rico Electric Power Authority	  	 	555	  	A-	
New York City Municipal Water Finance Authority	  	 	548	  	AA	
New York State Metro Trans Auth - Trans Revenue	  	 	539	  	A	
Massachusetts State GO & Bay Transportation & Leases	  	 	516	  	AA-	
San Francisco California Airport	  	 	505	  	A+	
Energy Northwest (FKA WPPSS)	  	 	469	  	AA-	
New York State General Obligation	  	 	448	  	AA	
Puerto Rico General Obligation & Leases	  	 	430	  	A-	
Houston Texas Water & Sewer System	  	 	393	  	A+	
Los Angeles County Metro Trans - Sales Tax - 1st	  	 	365	  	AA	
Dade County Florida Water & Sewer System	  	 	327	  	A	
Mental Health Services Facilities - New York	  	 	320	  	AA-	
Intermountain Power Agency	  	 	320	  	A+	
Illinois State General Obligation & Leases	  	 	307	  	AA	
Puerto Rico Government Development Bank	  	 	300	  	AAA	
Chicago Illinois Public Building - Board of Education	  	 	300	  	A+	
New Jersey State Turnpike	  	 	298	  	A	
District of Columbia General Obligation	  	 	297	  	A-	
 
(1)	Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company	
 
Page 17

Table of Contents
ACE Limited
Financial Services Portfolio - 2
25 Largest Asset-Backed Exposures (Non - Municipal)
(in millions of U.S. dollars)
(Unaudited)

Obligor Name
	  	Net Par
In Force
	  	Rating
	
SALS 2002-6 - Synthetic CDO	  	$	740	  	AAA	
Argent Securities Inc. 2003-W6	  	 	736	  	AAA	
Absolute CDO OF ABS	  	 	594	  	AAA	
Triplas CDO OF ABS	  	 	584	  	AAA	
Taurus 2001-06 - Synthetic CDO	  	 	571	  	A+	
Sears Credit Card Master Trust 2002-3 Class A - Credit Cards	  	 	550	  	AAA	
Dresdner 2001 - 1 - Synthetic CDO	  	 	500	  	AAA	
Houston CDO Portfolio 2000-1	  	 	470	  	AA	
Stars 2001-3 - Synthetic CDO	  	 	440	  	AAA	
Merrill Lynch Synthetic CDO Taurus 8	  	 	440	  	AAA	
Merrill Lynch Dots 4 - Synthetic CDO	  	 	430	  	AAA	
SALS 2003-9 - Synthetic CDO	  	 	410	  	AAA	
Providian Gateway Master Trust	  	 	392	  	BB-	
Magrathea V - Synthetic CDO	  	 	360	  	AAA	
Lehman Sprint 2001-1 Super Senior - Synthetic CDO	  	 	360	  	AAA	
Taurus 2001-01 - Synthetic CDO	  	 	347	  	AAA	
Option One Mortgage Loan Trust 2003-1 Cl A-1	  	 	344	  	AAA	
ING Equity Trust (Pilgrim Principal Protection)	  	 	322	  	AAA	
Europa II Limited Class A1 - Synthetic CDO	  	 	301	  	AAA	
Bistro 2000-07 Class A-1 - Synthetic CDO	  	 	300	  	AAA	
Hights 2001-1 - Synthetic CDO	  	 	295	  	BBB+	
Metris Master Credit Card Trust	  	 	281	  	BB	
CDO ^2 - CDO of CDOs	  	 	281	  	AAA	
Halcyon Synthetic CDO	  	 	278	  	AAA	
Morgan Stanley Dean Witter 2003-NC9 Class A1	  	 	276	  	AAA	
 
Page 18

Table of Contents
ACE Limited
Financial Services Portfolio - 3
(in millions of U.S. dollars)
(Unaudited)
 
Largest Single Name Corporate CDS

Obligor Name
	  	Net Par
In Force  (1)
	  	Rating
	  	Rating
	  	Gross Par Written  (2)
Three
months
ended
March 31, 2004
	  	Net Par
Outstanding
	
General Electric Company	  	$	60	  	AAA	  	AAA	  	$	 —  	  	$	420	
ABN AMRO Bank NV	  	 	53	  	AA-	  	AA	  	 	—  	  	 	377	
Fortis NV	  	 	52	  	A+	  	A	  	 	—  	  	 	1,019	
Japan Republic Sovereign Obligation	  	 	50	  	AA-	  	BBB	  	 	—  	  	 	265	
American International Group, Inc. (AIG)	  	 	50	  	AAA	  	Below investment grade	  	 	—  	  	 	—  	
 	  	 	 	  	 	  	 	  			  			
FNMA - Fannie Mae	  	 	45	  	AAA	  	Total	  	$	 —  	  	$	2,081	
 	  	 	 	  	 	  	 	  			  			
Allianz AG	  	 	41	  	AA-	  	 	  	 	 	  	 	 	
France Telecom	  	 	40	  	BBB+	  	 	  	 	 	  	 	 	
Deutsche Telekom AG	  	 	40	  	BBB+	  	 	  	 	 	  	 	 	
Citigroup, Inc.	  	 	39	  	AA-	  	 	  	 	 	  	 	 	
 
(1)	Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company	
 
(2)	Gross par approximates net par as the company is a net line writer	
 
Page 19

Table of Contents
ACE Limited
Financial Services Portfolio - 4
(in millions of U.S. dollars)
(Unaudited)
 
Maturity Profile of Select Par Insured Categories
 
(Outstanding Net Par)

 	  	2004 (1)
	  	2005
	  	2006
	  	2007
	  	2008
	
Senior Layer CDO’s	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	16,317	  	$	16,217	  	$	14,211	  	$	11,545	  	$	8,513	
Scheduled runoff amount	  	 	228	  	 	2,312	  	 	3,402	  	 	4,061	  	 	2,228	
 	  			  			  			  			  			
Ending outstanding par	  	$	16,089	  	$	13,777	  	$	10,376	  	$	6,314	  	$	4,086	

Single Name Corporate CDS	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	2,081	  	$	1,681	  	$	692	  	$	506	  	$	279	
Scheduled runoff amount	  	 	400	  	 	989	  	 	186	  	 	227	  	 	100	
 	  			  			  			  			  			
Ending outstanding par	  	$	1,681	  	$	692	  	$	506	  	$	279	  	$	179	

Funded Equity CDO’s	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Beginning outstanding par	  	$	221	  	$	221	  	$	221	  	$	221	  	$	163	
Scheduled runoff amount	  	 	—  	  	 	—  	  	 	—  	  	 	58	  	 	50	
 	  			  			  			  			  			
Ending outstanding par	  	$	221	  	$	221	  	$	221	  	$	163	  	$	113	

(1)	Beginning balance as of January 1, 2004 	

CDO’s
Rating
	  	Gross Par Written  (2)
Three months
ended
March 31, 2004
	  	Net Par
Outstanding
	
AAA	  	$	7	  	$	12,522	
AA	  	 	60	  	 	1,933	
A	  	 	—  	  	 	1,021	
BBB	  	 	—  	  	 	735	
Below investment grade	  	 	—  	  	 	106	
Funded Equity	  	 	—  	  	 	221	
 	  			  			
Total	  	$	67	  	$	16,538	

(2)	Gross par approximates net par as the company is a net line writer	
 
Page 20

Table of Contents
ACE Limited
 Loss Reserve Rollforward
(in millions of U.S. dollars)
(Unaudited)

 	  	Total
	 	 	Ongoing
	 	 	Run-off (1)
	 	
 	  	Unpaid Losses
	 	 	Unpaid Losses
	 	 	Unpaid Losses
	 	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross
	 	 	Ceded
	 	 	Net
	 	
Balance at December 31, 2002	  	$	24,315	 	 	$	12,997	 	 	$	11,318	 	 	$	15,832	 	 	$	6,798	 	 	$	9,034	 	 	$	8,483	 	 	$	6,199	 	 	$	2,284	 	
Losses and loss expenses incurred	  	 	2,390	 	 	 	1,107	 	 	 	1,283	 	 	 	2,365	 	 	 	1,104	 	 	 	1,261	 	 	 	25	 	 	 	3	 	 	 	22	 	
Losses and loss expenses paid	  	 	(2,155	)	 	 	(984	)	 	 	(1,171	)	 	 	(1,910	)	 	 	(893	)	 	 	(1,017	)	 	 	(245	)	 	 	(91	)	 	 	(154	)	
Other (incl. foreign exch. revaluation)	  	 	86	 	 	 	16	 	 	 	70	 	 	 	79	 	 	 	16	 	 	 	63	 	 	 	7	 	 	 	—  	 	 	 	7	 	
 	  				 				 				 				 				 				 				 				 				
Balance at March 31, 2003	  	 	24,636	 	 	 	13,136	 	 	 	11,500	 	 	 	16,366	 	 	 	7,025	 	 	 	9,341	 	 	 	8,270	 	 	 	6,111	 	 	 	2,159	 	
 	  				 				 				 				 				 				 				 				 				
Losses and loss expenses incurred	  	 	2,511	 	 	 	1,052	 	 	 	1,459	 	 	 	2,463	 	 	 	1,020	 	 	 	1,443	 	 	 	48	 	 	 	32	 	 	 	16	 	
Losses and loss expenses paid	  	 	(2,415	)	 	 	(1,357	)	 	 	(1,058	)	 	 	(1,964	)	 	 	(1,134	)	 	 	(830	)	 	 	(451	)	 	 	(223	)	 	 	(228	)	
Other (incl. foreign exch. revaluation)	  	 	208	 	 	 	123	 	 	 	85	 	 	 	208	 	 	 	123	 	 	 	85	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				 				
Balance at June 30, 2003	  	 	24,940	 	 	 	12,954	 	 	 	11,986	 	 	 	17,073	 	 	 	7,034	 	 	 	10,039	 	 	 	7,867	 	 	 	5,920	 	 	 	1,947	 	
 	  				 				 				 				 				 				 				 				 				
Losses and loss expenses incurred	  	 	2,552	 	 	 	1,033	 	 	 	1,519	 	 	 	2,472	 	 	 	977	 	 	 	1,495	 	 	 	80	 	 	 	56	 	 	 	24	 	
Losses and loss expenses paid	  	 	(1,833	)	 	 	(863	)	 	 	(970	)	 	 	(1,557	)	 	 	(663	)	 	 	(894	)	 	 	(276	)	 	 	(200	)	 	 	(76	)	
Other (incl. foreign exch. revaluation)	  	 	(22	)	 	 	(19	)	 	 	(3	)	 	 	(12	)	 	 	(19	)	 	 	7	 	 	 	(10	)	 	 	—  	 	 	 	(10	)	
 	  				 				 				 				 				 				 				 				 				
Balance at September 30, 2003	  	 	25,637	 	 	 	13,105	 	 	 	12,532	 	 	 	17,976	 	 	 	7,329	 	 	 	10,647	 	 	 	7,661	 	 	 	5,776	 	 	 	1,885	 	
 	  				 				 				 				 				 				 				 				 				
Losses and loss expenses incurred	  	 	2,812	 	 	 	956	 	 	 	1,856	 	 	 	2,779	 	 	 	932	 	 	 	1,847	 	 	 	33	 	 	 	24	 	 	 	9	 	
Losses and loss expenses paid	  	 	(1,810	)	 	 	(1,104	)	 	 	(706	)	 	 	(1,433	)	 	 	(797	)	 	 	(636	)	 	 	(377	)	 	 	(307	)	 	 	(70	)	
Other (incl. foreign exch. revaluation) (2)	  	 	516	 	 	 	235	 	 	 	281	 	 	 	513	 	 	 	235	 	 	 	278	 	 	 	3	 	 	 	—  	 	 	 	3	 	
 	  				 				 				 				 				 				 				 				 				
Balance at December 31, 2003	  	 	27,155	 	 	 	13,192	 	 	 	13,963	 	 	 	19,835	 	 	 	7,699	 	 	 	12,136	 	 	 	7,320	 	 	 	5,493	 	 	 	1,827	 	
 	  				 				 				 				 				 				 				 				 				
Losses and loss expenses incurred	  	 	2,298	 	 	 	756	 	 	 	1,542	 	 	 	2,256	 	 	 	724	 	 	 	1,532	 	 	 	42	 	 	 	32	 	 	 	10	 	
Losses and loss expenses paid	  	 	(1,873	)	 	 	(781	)	 	 	(1,092	)	 	 	(1,652	)	 	 	(682	)	 	 	(970	)	 	 	(221	)	 	 	(99	)	 	 	(122	)	
Other (incl. foreign exch. revaluation)	  	 	117	 	 	 	110	 	 	 	7	 	 	 	117	 	 	 	110	 	 	 	7	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				 				
Balance at March 31, 2004	  	$	27,697	 	 	$	13,277	 	 	$	14,420	 	 	$	20,556	 	 	$	7,851	 	 	$	12,705	 	 	$	7,141	 	 	$	5,426	 	 	$	1,715	 	

(1)	The run-off reserves primarily include Brandywine group, the Commercial Insurance Service - Middle Market Worker’s Comp. reserves and the pre-1997 Westchester Specialty reserves.	
 
(2)	Other includes approximately $220 million of gross losses and $140 million of reinsurance recoverable related to ACE increasing its participation in the Lloyds syndicate to 100%.	
 
Page 21

Table of Contents
 ACE Limited
Asbestos and Environmental Reserves
(in millions of U.S. dollars)
(Unaudited)

 	  	Asbestos
	 	 	Asbestos -
December 31, 2003*
	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	Gross 3 year
survival ratio
	  	Gross 1 year
survival ratio
	
Balance at December 31, 2003	  	$	2,899	 	 	$	2,622	 	 	$	277	 	 	10.3x	  	9.9x	
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	  	 	
Losses and loss expenses paid	  	 	(96	)	 	 	(48	)	 	 	(48	)	 	 	  	 	
Foreign exchange revaluation	  	 	21	 	 	 	11	 	 	 	10	 	 	 	  	 	
 	  				 				 				 	 	  	 	
Balance at March 31, 2004	  	$	2,824	 	 	$	2,585	 	 	$	239	 	 	 	  	 	

 	  	Environmental & Other
Latent Exposures
	 	 	 	  	 	
 	  	Gross
	 	 	Ceded
	 	 	Net
	 	 	 	  	 	
Balance at December 31, 2003	  	$	1,148	 	 	$	898	 	 	$	250	 	 	 	  	 	
Prior period development	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	  	 	
Losses and loss expenses paid	  	 	(47	)	 	 	(13	)	 	 	(34	)	 	 	  	 	
Foreign exchange revaluation	  	 	3	 	 	 	1	 	 	 	2	 	 	 	  	 	
 	  				 				 				 	 	  	 	
Balance at March 31, 2004	  	$	1,104	 	 	$	886	 	 	$	218	 	 	 	  	 	

*	The survival ratios are adversely affected by the timing of certain previously agreed upon settlements. These payments were anticipated in our 2002 asbestos study.	
 
Page 22

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

 	  	March 31
2004
	 	 	December 31
2003
	 	 	December 31
2002
	 	
Reinsurance recoverable on paid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations (1)	  	$	761	 	 	$	835	 	 	$	951	 	
Brandywine (2)	  	 	405	 	 	 	419	 	 	 	385	 	
Westchester (3)	  	 	26	 	 	 	23	 	 	 	27	 	
 	  				 				 				
Total	  	$	1,192	 	 	$	1,277	 	 	$	1,363	 	
 	  				 				 				
Reinsurance recoverable on unpaid losses & loss expenses	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations (1)	  	$	8,954	 	 	$	8,494	 	 	$	7,839	 	
Brandywine (2)	  	 	4,340	 	 	 	4,729	 	 	 	5,237	 	
Westchester (3)	  	 	539	 	 	 	541	 	 	 	491	 	
 	  				 				 				
Total	  	$	13,833	 	 	$	13,764	 	 	$	13,567	 	
 	  				 				 				
Gross reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations (1)	  	$	9,715	 	 	$	9,329	 	 	$	8,790	 	
Brandywine (2)	  	 	4,745	 	 	 	5,148	 	 	 	5,622	 	
Westchester (3)	  	 	565	 	 	 	564	 	 	 	518	 	
 	  				 				 				
Total	  	$	15,025	 	 	$	15,041	 	 	$	14,930	 	
 	  				 				 				
Bad debt reserve	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations (1)	  	$	(510	)	 	$	(482	)	 	$	(431	)	
Brandywine (2)	  	 	(424	)	 	 	(449	)	 	 	(478	)	
Westchester (3)	  	 	(29	)	 	 	(29	)	 	 	(30	)	
 	  				 				 				
Total	  	$	(963	)	 	$	(960	)	 	$	(939	)	
 	  				 				 				
Net reinsurance recoverable	  	 	 	 	 	 	 	 	 	 	 	 	
Active operations (1)	  	$	9,205	 	 	$	8,847	 	 	$	8,359	 	
Brandywine (2)	  	 	4,321	 	 	 	4,699	 	 	 	5,144	 	
Westchester (3)	  	 	536	 	 	 	535	 	 	 	488	 	
 	  				 				 				
Total	  	$	14,062	 	 	$	14,081	 	 	$	13,991	 	

(1)	Active operations include the run-off operations of CIS and certain other divisions.	
 
(2)	The Active operations’ obligations with respect to further funding of the run-off of Century Indemnity Company, a Brandywine subsidiary, are limited under the Brandywine Restructuring Order (the “Order”). Under the Order, the Company provided $800 million aggregate excess of loss reinsurance agreement, with respect to the Brandywine Runoff. (Refer to the “Asbestos and Environmental Claims” section of the “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” incorporated into our filed Form 10-K for the year ended December 31, 2003 for additional information about the Order and other Company obligations.) At March 31, 2004, approximately $466 million in losses and recoverable bad debt reserves were ceded by Century to the aggregate excess of loss reinsurance agreement.	
 
(3)	As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At December 31, 2003, the remaining unimpaired limit in the reinsurance cover was approximately $600 million.	
 
Page 23

Table of Contents
ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
 
Reinsurance Recoverable for Active Operations

 	  	December 31, 2003
	 	
Categories
	  	Recoverable
	  	Bad Debt
	  	% of Gross
	 	
Top 10 reinsurers	  	$	4,306	  	$	59	  	1.4	%	
Other reinsurers balances >$20 million	  	 	2,442	  	 	87	  	3.6	%	
Other reinsurers balances <$20 million	  	 	748	  	 	106	  	14.2	%	
Mandatory pools and government agencies	  	 	753	  	 	4	  	0.5	%	
Captives	  	 	782	  	 	1	  	0.1	%	
Other (1)	  	 	298	  	 	225	  	75.5	%	
 	  			  			  			
Total	  	$	9,329	  	$	482	  	5.2	%	

At December 31, 2003, $6.9 billion of the active operations’ recoverables were from rated reinsurers, of which 85% were rated the equivalent of A- or better by nationally recognized rating agencies. The Company held collateral of $1.7 billion, of which $1.2 billion was matched and usable against existing recoverables.

Top 10 Reinsurers (net of collateral) (2)
	  	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
	
AXA	  	ABB Group	  	Independence Blue Cross (Amerihealth)	
Berkshire Hathaway Insurance Group	  	AIOI Insurance	  	ING - Internationale Nederlanden Group	
CIGNA	  	Allianz Group	  	Korean Reinsurance Company (KRIC)	
Electric Insurance Company	  	American International Group	  	Liberty Mutual Insurance Companies	
GE Global Insurance Group (Employers Re)	  	Arch Capital	  	Overseas Partners Ltd.	
Hannover	  	AVIVA	  	PMA Capital Insurance Company	
Lloyd’s of London	  	Chubb Insurance Group	  	QBE Insurance	
Munich Re	  	CNA Insurance Companies	  	RenaissanceRe Holdings Ltd	
Swiss Re Group	  	Converium Group	  	Royal & Sun Alliance Insurance Group plc	
XL Capital Group	  	DaimlerChrysler Group	  	SCOR Group	
 	  	EQUITAS	  	Sompo Japan	
 	  	Everest Re Group	  	St. Paul Companies	
 	  	Fairfax Financial	  	Trenwick Group	
 	  	FM Global Group	  	White Mountains Insurance Group	
 	  	Gerling Group	  	WR Berkley Corp	
 	  	Hartford Insurance Group	  	Zurich Financial Services Group	
 
(1) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.
(2) Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.
 
Page 24

Table of Contents
ACE Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
 
Consolidated Reinsurance Recoverable

 	  	December 31, 2003
	 	
Categories
	  	Recoverable
	  	Bad Debt
	  	% of Gross
	 	
Top 10 reinsurers	  	$	7,798	  	$	84	  	1.1	%	
Other reinsurers balances >$20 million	  	 	3,373	  	 	147	  	4.4	%	
Other reinsurers balances <$20 million	  	 	979	  	 	150	  	15.3	%	
Mandatory pools and government agencies	  	 	779	  	 	4	  	0.5	%	
Structured settlements	  	 	429	  	 	2	  	0.5	%	
Captives	  	 	801	  	 	1	  	0.1	%	
Other (1)	  	 	882	  	 	572	  	64.9	%	
 	  			  			  			
Total	  	$	15,041	  	$	960	  	6.4	%	

At December 31, 2003, $11.3 billion of consolidated recoverables were from rated reinsurers, of which 89% were rated the equivalent of A- or better by nationally recognized rating agencies.

Top 10 Reinsurers (net of collateral) (2)
	  	Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)
	
AXA	  	ABB Group	  	IRB - Brasil Resseguros S.A.	
Berkshire Hathaway Insurance Group	  	AIOI Insurance	  	Korean Reinsurance Company (KRIC)	
CIGNA	  	Allianz Group	  	Liberty Mutual Insurance Companies	
EQUITAS	  	American International Group	  	Mitsui Sumitomo Insurance Company Ltd.	
GE Global Insurance Group	  	Arch Capital	  	Overseas Partners Ltd.	
Hannover	  	AVIVA	  	Partner Reinsurance Company of the U.S.	
Lloyd’s of London	  	Chubb Insurance Group	  	PMA Capital Insurance Company	
Munich Re	  	CNA Insurance Companies	  	QBE Insurance	
St. Paul Companies	  	Constellation Reinsurance Company	  	RenaissanceRe Holdings Ltd	
Swiss Re Group	  	Converium Group	  	Royal & Sun Alliance Insurance Group plc	
 	  	DaimlerChrysler Group	  	SCOR Group	
 	  	Dominion Ins. Co. Ltd.	  	Sompo Japan	
 	  	Electric Insurance Company	  	Toa Reinsurance Company	
 	  	Everest Re Group	  	Tokio Marine & Fire Insurance Company Ltd.	
 	  	Fairfax Financial	  	Travelers Property Casualty Group	
 	  	FM Global Group	  	Trenwick Group	
 	  	Gerling Group	  	White Mountains Insurance Group	
 	  	Great American P&C Insurance Companies	  	WR Berkley Corp	
 	  	Hartford Insurance Group	  	XL Capital Group	
 	  	Independence Blue Cross (Amerihealth)	  	Zurich Financial Services Group	
 	  	ING - Internationale Nederlanden Group	  	 	
 
(1) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.
(2) Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory pools or voluntary pools.
 
Page 25

Table of Contents
ACE Limited
Reinsurance Recoverable Analysis - 4
(in millions of U.S. dollars)
(Unaudited)
 
Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

 	  	General
Collections (1)
	 	 	Other (2)
	 	 	Total
	 	
Gross balance at December 31, 2003	  	$	730	 	 	$	547	 	 	$	1,277	 	
Bad debt reserve at 12/31/03	  	 	45	 	 	 	358	 	 	 	403	 	
% of gross	  	 	6.2	%	 	 	65.4	%	 	 	31.6	%	
 	  				 				 				
Net balance at December 31, 2003	  	$	685	 	 	$	189	 	 	$	874	 	
 	  				 				 				
Gross balance at March 31, 2004	  	$	639	 	 	$	553	 	 	$	1,192	 	
Bad debt reserve at 3/31/04	  	 	44	 	 	 	378	 	 	 	422	 	
% of gross	  	 	6.9	%	 	 	68.4	%	 	 	35.4	%	
 	  				 				 				
Net balance at March 31, 2004	  	$	595	 	 	$	175	 	 	$	770	 	

(1)	General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or credit issues.	
 
(2)	Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.	
 
Page 26

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

 	  	March 31
2004
	 	 	December 31
2003
	 	
Market Value	  	 	 	 	 	 	 	 	
Fixed maturities	  	$	19,920	 	 	$	18,645	 	
Securities on loan	  	 	1,183	 	 	 	684	 	
Short-term investments	  	 	3,290	 	 	 	2,928	 	
Cash	  	 	614	 	 	 	562	 	
 	  				 				
Total	  	$	25,007	 	 	$	22,819	 	
 	  				 				
Asset Allocation by Market Value	  	 	 	 	 	 	 	 	
Treasury	  	$	1,491	 	 	$	1,715	 	
Agency	  	 	1,723	 	 	 	1,512	 	
Corporate	  	 	7,201	 	 	 	6,304	 	
Mortgage-backed securities	  	 	4,536	 	 	 	3,894	 	
Asset-backed securities	  	 	800	 	 	 	737	 	
Municipal	  	 	1,498	 	 	 	1,445	 	
Non-US	  	 	3,854	 	 	 	3,723	 	
Cash & cash equivalent	  	 	3,904	 	 	 	3,489	 	
 	  				 				
Total	  	$	25,007	 	 	$	22,819	 	
 	  				 				
Credit Quality by Market Value	  	 	 	 	 	 	 	 	
AAA	  	$	13,211	 	 	$	12,315	 	
AA	  	 	4,200	 	 	 	3,389	 	
A	  	 	3,847	 	 	 	3,534	 	
BBB	  	 	2,002	 	 	 	1,783	 	
BB	  	 	653	 	 	 	709	 	
B	  	 	1,045	 	 	 	1,029	 	
Other	  	 	49	 	 	 	60	 	
 	  				 				
Total	  	$	25,007	 	 	$	22,819	 	
 	  				 				
Cost/Amortized Cost	  	 	 	 	 	 	 	 	
Fixed maturities	  	$	19,129	 	 	$	18,006	 	
Securities on loan	  	 	1,113	 	 	 	650	 	
Short term investments	  	 	3,290	 	 	 	2,928	 	
Cash	  	 	614	 	 	 	562	 	
 	  				 				
Subtotal	  	 	24,146	 	 	 	22,146	 	
Equity securities	  	 	414	 	 	 	401	 	
Other investments	  	 	595	 	 	 	602	 	
 	  				 				
Total	  	$	25,155	 	 	$	23,149	 	
 	  				 				
Avg. duration of fixed maturities, adj. for int. rate swaps	  	 	3.4 years	 	 	 	3.4 years	 	
Avg. market yield of fixed maturities	  	 	4.0	%	 	 	4.0	%	
Avg. credit quality	  	 	AA	 	 	 	AA	 	
 
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Table of Contents
ACE Limited
Investment Portfolio - 2
(in millions of U.S. dollars)
(Unaudited)
 
Investment portfolio
 
Top 10 Exposures - Fixed Maturity Investments and Single Name Credit Default Swaps

March 31, 2004
	  	December 31, 2003
	
General Electric	  	$	257	  	General Electric	  	$	303	
Citigroup Inc	  	 	214	  	Citigroup Inc	  	 	186	
HSBC Holdings Plc	  	 	189	  	General Motors	  	 	167	
Morgan Stanley	  	 	145	  	HSBC Holdings Plc	  	 	144	
General Motors	  	 	129	  	Verizon Communications	  	 	119	
Verizon Communications	  	 	124	  	AIG	  	 	108	
Goldman Sachs Group Inc	  	 	120	  	DaimlerChrysler	  	 	101	
Bank of America Corp	  	 	116	  	Morgan Stanley	  	 	95	
American International Group	  	 	115	  	Ford Motor Co	  	 	94	
Ford Motor Co	  	 	97	  	Deutsche Telekom	  	 	84	
 
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Table of Contents
 ACE Limited
Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)

 	  	Three months ended March 31, 2004
	 	
 	  	Net Realized
Gains
(Losses) (1)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	55	 	 	$	175	 	 	$	230	 	
Interest rate swaps	  	 	(14	)	 	 	—  	 	 	 	(14	)	
Equity securities	  	 	28	 	 	 	(4	)	 	 	24	 	
Equity and fixed income derivatives	  	 	13	 	 	 	—  	 	 	 	13	 	
Foreign exchange gains (losses)	  	 	5	 	 	 	—  	 	 	 	5	 	
Other	  	 	(7	)	 	 	4	 	 	 	(3	)	
 	  				 				 				
Total inv. portfolio gains (losses)	  	 	80	 	 	 	175	 	 	 	255	 	
Other FAS 133 adjustments	  	 	(23	)	 	 	—  	 	 	 	(23	)	
 	  				 				 				
Total gains (losses)	  	 	57	 	 	 	175	 	 	 	232	 	
Income tax (expense) benefit	  	 	(21	)	 	 	(48	)	 	 	(69	)	
 	  				 				 				
Net gains (losses)	  	$	36	 	 	$	127	 	 	$	163	 	

(1)	Includes impairments of $1M for fixed maturities and $1M for equities.	

 	  	Three months ended March 31, 2003
	 	
 	  	Net Realized
Gains
(Losses)  (2)
	 	 	Net Unrealized
Gains
(Losses)
	 	 	Net
Impact
	 	
Investment Portfolio Gains (Losses)	  	 	 	 	 	 	 	 	 	 	 	 	
Fixed maturities	  	$	12	 	 	$	56	 	 	$	68	 	
Interest rate swaps	  	 	(9	)	 	 	—  	 	 	 	(9	)	
Equity securities	  	 	(50	)	 	 	34	 	 	 	(16	)	
Equity and fixed income derivatives	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Foreign exchange gains (losses)	  	 	9	 	 	 	—  	 	 	 	9	 	
Other	  	 	—  	 	 	 	(2	)	 	 	(2	)	
 	  				 				 				
Total inv. portfolio gains (losses)	  	 	(38	)	 	 	88	 	 	 	50	 	
Other FAS 133 adjustments	  	 	(2	)	 	 	—  	 	 	 	(2	)	
 	  				 				 				
Total gains (losses)	  	 	(40	)	 	 	88	 	 	 	48	 	
Income tax (expense) benefit	  	 	8	 	 	 	(9	)	 	 	(1	)	
 	  				 				 				
Net gains (losses)	  	$	(32	)	 	$	79	 	 	$	47	 	

(2)	Includes impairments of $18M for fixed maturities and $46M for equities.	
 
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Table of Contents
 ACE Limited
Capital Structure
(in millions of U.S. dollars)
(Unaudited)

 	  	March 31
2004
	 	 	December 31
2003
	 	 	December 31
2002
	 	
Total short-term debt	  	$	546	 	 	$	546	 	 	$	146	 	
Total long-term debt	  	 	1,349	 	 	 	1,349	 	 	 	1,749	 	
 	  				 				 				
Total debt	  	 	1,895	 	 	 	1,895	 	 	 	1,895	 	
Total trust preferreds	  	 	487	 	 	 	475	 	 	 	475	 	
Mezzanine equity (1)	  	 	—  	 	 	 	—  	 	 	 	311	 	
Perpetual preferred (2)	  	 	557	 	 	 	557	 	 	 	—  	 	
Ordinary shareholders’ equity	  	 	8,840	 	 	 	8,278	 	 	 	6,389	 	
 	  				 				 				
Total shareholders’ equity	  	$	9,397	 	 	$	8,835	 	 	$	6,389	 	
 	  				 				 				
Total capitalization	  	$	11,779	 	 	$	11,205	 	 	$	9,070	 	
Tangible shareholders’ equity (3)	  	$	6,698	 	 	$	6,124	 	 	$	3,672	 	
				
Leverage ratios	  	 	 	 	 	 	 	 	 	 	 	 	
Debt/ total capitalization	  	 	16.1	%	 	 	16.9	%	 	 	20.9	%	
Debt plus trust preferreds/ total capitalization	  	 	20.2	%	 	 	21.2	%	 	 	26.1	%	
Debt/ tangible equity	  	 	28.3	%	 	 	30.9	%	 	 	51.6	%	
Debt plus trust preferreds and mezzanine equity/ tangible equity	  	 	35.6	%	 	 	38.7	%	 	 	73.0	%	
Debt plus total preferred stock/ total capitalization	  	 	25.0	%	 	 	26.1	%	 	 	26.1	%	
 
(1)	The FELINE PRIDES converted in the second quarter of 2003.	
 
(2)	Preferred shares $575 million, net of issuance costs $18 million.	
 
(3)	Tangible equity is equal to shareholders’ equity less goodwill.	
 
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Table of Contents
ACE Limited
 Non-GAAP Financial Measures
(in millions of U.S. dollars)
(Unaudited)
 
Regulation G - Non-GAAP Financial Measures
 
In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. A reconciliation of book value per share to diluted book value per ordinary share is provided on page 33. The following non-GAAP measure is a common performance measurement and is defined as income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.
 
We exclude net realized gains (losses) on investments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

 	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Net income, as reported	  	$	447	 	 	$	444	 	 	$	355	 	 	$	371	 	 	$	247	 	 	$	1,417	 	
Net realized gains (losses)	  	 	57	 	 	 	128	 	 	 	57	 	 	 	107	 	 	 	(40	)	 	 	252	 	
Tax effect of net realized gains (losses)	  	 	(21	)	 	 	(12	)	 	 	(6	)	 	 	(22	)	 	 	8	 	 	 	(32	)	
 	  				 				 				 				 				 				
Income excluding net realized gains (losses)	  	$	411	 	 	$	328	 	 	$	304	 	 	$	286	 	 	$	279	 	 	$	1,197	 	

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Table of Contents
 ACE Limited
Diluted Book Value per Ordinary Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
 
Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share

 	  	March 31
2004
	 	 	December 31
2003
	 	
Shareholders’ equity	  	$	9,397	 	 	$	8,835	 	
Net proceeds from assumed conversions of options	  	 	622	 	 	 	390	 	
Proceeds from issuance of preferred shares	  	 	(557	)	 	 	(557	)	
 	  				 				
Numerator for diluted book value per share calculation	  	 	9,462	 	 	 	8,668	 	
Less: goodwill	  	 	2,699	 	 	 	2,711	 	
 	  				 				
Numerator for diluted tangible book value per share	  	$	6,763	 	 	$	5,957	 	
 	  				 				
Ordinary shares outstanding - end of period	  	 	282,714,909	 	 	 	279,897,193	 	
Shares issued from assumed conversions of options	  	 	18,951,480	 	 	 	14,305,419	 	
 	  				 				
Denominator for diluted and diluted tangible book value	  	 	301,666,389	 	 	 	294,202,612	 	
 	  				 				
Book value per ordinary share	  	$	33.24	 	 	$	29.57	 	
Diluted book value per ordinary share	  	$	31.36	 	 	$	29.46	 	
Diluted tangible book value per ordinary share	  	$	22.41	 	 	$	20.25	 	
 
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Table of Contents
 ACE Limited
Comprehensive Income
(in millions of U.S. dollars)
(Unaudited)

Consolidated Statement of Comprehensive Income
	  	1Q-04
	 	 	4Q-03
	 	 	3Q-03
	 	 	2Q-03
	 	 	1Q-03
	 	 	Full Year
2003
	 	
Net income	  	$	447	 	 	$	444	 	 	$	355	 	 	$	371	 	 	$	247	 	 	$	1,417	 	
Net unrealized appreciation (depreciation) on investments	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized appreciation (depreciation) on investments	  	 	236	 	 	 	3	 	 	 	(165	)	 	 	354	 	 	 	112	 	 	 	304	 	
Reclassification adjustment for net realized gains (losses) included in net income	  	 	(61	)	 	 	(19	)	 	 	(24	)	 	 	(14	)	 	 	(24	)	 	 	(81	)	
Cumulative translation adjustment	  	 	2	 	 	 	62	 	 	 	(1	)	 	 	57	 	 	 	26	 	 	 	144	 	
Minimum pension liability adjustment	  	 	(2	)	 	 	8	 	 	 	(3	)	 	 	(59	)	 	 	—  	 	 	 	(54	)	
Income tax (expense) benefit related to other comprehensive income items	  	 	(41	)	 	 	(2	)	 	 	48	 	 	 	(63	)	 	 	(16	)	 	 	(33	)	
 	  				 				 				 				 				 				
Other comprehensive income (loss)	  	 	134	 	 	 	52	 	 	 	(145	)	 	 	275	 	 	 	98	 	 	 	280	 	
 	  				 				 				 				 				 				
Comprehensive income	  	$	581	 	 	$	496	 	 	$	210	 	 	$	646	 	 	$	345	 	 	$	1,697	 	

Page 33

Table of Contents
ACE Limited
 Glossary
 
Annualized return on ordinary shareholders’ equity (ROE): Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shareholders’ equity for the period. To annualize a quarterly rate multiply by four. 
 
Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial services operations. 
 
Diluted book value per ordinary share: Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
 
Diluted tangible book value per ordinary share: Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued.
 
Effective tax rate: Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).
 
FAS 115: Unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity.
 
Life underwriting income: Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses. 
 
NM: Not meaningful.
 
Ordinary shareholders’ equity: Shareholders’ equity less perpetual preferred shares.
 
Property and casualty combined ratios: Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios excluding life reinsurance business and financial services segment.
 
Return on ordinary shareholders’ equity (ROE): Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shareholders’ equity.
 
Tangible equity: Shareholders’ equity less goodwill.
 
Total capitalization: Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders’ equity.
 
Page 34