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) – July 24, 2012

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 July 24, 2012, ACE Limited issued a press release reporting its second quarter 2012 results and the availability of its second 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
 
(c)	Exhibits	

Exhibit
Number	  	Description	
99.1	  	Press Release, Dated July 24, 2012, Reporting Second Quarter 2012 Results	
		
99.2	  	Second 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: July 24, 2012

EXHIBIT INDEX

Number	  	Description	  	Method of Filing	
99.1	  	Press Release, Dated July 24, 2012,	  	Furnished herewith	
	  	Reporting Second Quarter 2012 Results	  		
			
99.2	  	Second 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 SECOND QUARTER OPERATING INCOME OF $743 MILLION AND
COMBINED RATIO OF 88.7% DRIVEN BY STRONG
CURRENT ACCIDENT YEAR UNDERWRITING RESULTS AND LOW
CATASTROPHE LOSSES
 
 	•	 	Operating return on equity of 12.6%	
 
 	•	 	Total net premiums written up 4.5%; up 6.5% in constant dollars	
 
 	•	 	Year-to-date net income and operating income both up over 50%	
 
 	•	 	Book value up 1.3% for the quarter, 5.9% for the year	
 
 	•	 	Full-year guidance, updated for year-to-date results and crop insurance impact, is now $7.20 - $7.60 per share in after-tax operating income	
ZURICH – July 24, 2012 – ACE Limited (NYSE: ACE) today reported net income for the quarter ended June 30, 2012, of $0.96 per share, compared with $1.74 per share for the same quarter last year. (1) Income excluding net realized gains (losses) was $2.17 per share, compared with $1.97 per share for the same quarter last year. (2) Book value and tangible book value increased 1.3% and 1.8%, respectively, from March 31, 2012. Book value and tangible book value per share now stand at $75.98 and $61.75, respectively. Annualized operating return on equity for the quarter was 12.6%. (2) The property and casualty (P&C) combined ratio for the quarter was 88.7%.
Second Quarter Summary
(in millions, except per share amounts)
(Unaudited)

 	  	 	 	 	 	 	 	 	 	 	(Per Share - Diluted)	 	
 	  	2012	 	 	2011	 	 	Change	 	 	2012	 	 	2011	 	 	Change	 	
Net income	  	$	328	 	 	$	594	 	 	 	(45	)% 	 	$	0.96	 	 	$	1.74	 	 	 	(45	)% 	
Net realized gains (losses), net of tax	  	 	(415	) 	 	 	(79	) 	 	 	NM	  	 	 	(1.21	) 	 	 	(0.23	) 	 	 	NM	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses), net of tax (2)	  	$	743	  	 	$	673	  	 	 	10	%	 	$	2.17	 	 	$	1.97	  	 	 	10	% 	

For the six months ended June 30, 2012, net income was $3.80 per share, compared with $2.48 per share for 2011; income excluding net realized gains (losses) was $4.22 per share, compared with $2.74 per share for 2011. Book value increased $1.4 billion, up 5.9% from December 31, 2011, and tangible book value increased $1.4 billion, up 7.2%. The P&C combined ratio for the six months ended June 30, 2012, was 88.9%.
Six Months Ended Summary
(in millions, except per share amounts)
(Unaudited)

 	  	 	 	 	 	 	 	 	 	 	(Per Share - Diluted)	 	
 	  	2012	 	 	2011	 	 	Change	 	 	2012	 	 	2011	 	 	Change	 	
Net income	  	$	1,301	 	 	$	844	 	 	 	54	% 	 	$	3.80	 	 	$	2.48	 	 	 	53	% 	
							
Net realized gains (losses), net of tax	  	 	(143	) 	 	 	(88	) 	 	 	63	% 	 	 	(0.42	) 	 	 	(0.26	) 	 	 	62	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses), net of tax (2)	  	$	1,444	 	 	$	932	 	 	 	55	% 	 	$	4.22	 	 	$	2.74	 	 	 	54	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had a very strong second quarter, with excellent operating results that were ahead of plan despite a challenging and slowing global economy. After-tax operating income was $743 million, up 10% from last year, and our operating ROE was 12.6%. Our underwriting results this quarter were again distinguishing, with a P&C combined ratio of 88.7%. ACE’s operating performance has been strong all year with earnings for the first six months exceeding $1.4 billion or $4.22 per share. Book value, which grew 1.3% in the quarter and is up almost 6% for the year, was impacted by the eurozone debt crisis and the consequent flight to safety, which affected foreign exchange, interest rates and equity markets.
“Total company net premiums written grew 4.5% in the quarter, or 6.5% adjusting for the impact of foreign exchange. As we said last quarter, our premium growth rate has been accelerating as the year progresses. We are benefiting from strong, broad-based growth, both geographic and product, along with an improving P&C price environment globally. For the first time, pricing in our international P&C operations in aggregate turned positive, whereas for our U.S. business, rates continued to rise, up 4.7% on average for the quarter.
“Drought conditions in the U.S. are impacting our crop insurance business and will affect our earnings in the second half of the year as described in our updated guidance. Crop insurance aside, we are optimistic about our revenue and earnings prospects for the balance of the year and we are well positioned to take advantage of the positive trend in P&C prices globally. At the same time, we are mindful of the economic and political headwinds – beginning with the eurozone crisis and the U.S. fiscal cliff, which are impacting economic conditions and business confidence in the U.S., China and the balance of the world – and the uncertainties these present.”
 
Page 2/9

Operating highlights for the quarter ended June 30, 2012, were as follows: (1)
 
 	•	 	Total company net premiums written increased 4.5%. On a constant-dollar basis, total company net premiums written increased 6.5%.	
 
 	•	 	P&C net premiums written increased 5.3%. On a constant-dollar basis, P&C net premiums written increased 7.4%.	
 
 	•	 	P&C underwriting income was $374 million compared with $239 million in 2011.	
 
 	•	 	The P&C combined ratio was 88.7% compared with 92.7% last year.	
 
 	•	 	Favorable prior period development pre-tax was $113 million, representing 3.4 percentage points of the combined ratio, compared with $146 million last year.	
 
 	•	 	Total pre-tax and after-tax catastrophe losses including reinstatement premiums were $55 million and $41 million, respectively, compared with $134 million and $101 million, respectively, in 2011.	
 
 	•	 	The current accident year combined ratio excluding catastrophe losses was 90.4% compared with 93.1% last year.	
 
 	•	 	The P&C expense ratio for the quarter was 29.2% compared with 29.6% last year.	
 
 	•	 	Operating cash flow was $811 million for the quarter.	
 
 	•	 	Net loss reserves increased $66 million in the quarter after adjusting for foreign exchange.	
 
 	•	 	Net investment income for the quarter decreased 5.5% to $537 million due to lower new money rates and the negative impact of foreign exchange, partially offset by higher distributions from private equity funds.	
 
 	•	 	Net realized losses from derivative accounting related to variable annuity reinsurance were $397 million. Year-to-date, the net loss is $121 million.	
 
 	•	 	Foreign exchange had a negative impact in the quarter, reducing net income by $24 million and book value by $103 million.	
 
 	•	 	Annualized operating return on equity was 12.6% for the quarter. (2) Annualized return on equity computed using net income was 5.1%.	
 
 	•	 	Book value per share (2 ) increased 1.2% to $75.98 from $75.09 at March 31, 2012, and increased 5.2% from $72.22 at December 31, 2011. The book value amounts reflect the effects of new accounting guidance for deferred acquisition costs that is retroactively applied to periods prior to January 1, 2012. (3)	
 
 	•	 	Tangible book value per share (2 ) increased 1.7% to $61.75 from $60.74 at March 31, 2012, and increased 6.5% from $57.97 at December 31, 2011.	
Details of financial results by business segment are available in the ACE Limited Financial Supplement. Key segment items for the quarter ended June 30, 2012, include:
 
 	•	 	Insurance-North American: Net premiums written increased 7.2%. Adjusted for crop insurance, net premiums written increased 10.3%. The combined ratio was 89.2% compared with 95.1%.	
 
 	•	 	Insurance-Overseas General: Net premiums written increased 2.2%. On a constant-dollar basis, net premiums written increased 6.7%. The combined ratio was 89.3% compared with 91.6%.	
 
 	•	 	Global Reinsurance: Net premiums written increased 9.4%. On a constant-dollar basis, net premiums written increased 9.9%. The combined ratio was 66.1% compared with 67.9%.	
 
 	•	 	Life: Operating income was $79 million compared with $88 million.	
 
Page 3/9

The company is updating guidance for full-year 2012. The range is now $7.20 to $7.60 per share in after-tax operating income for the year. First, the update reflects the positive prior period reserve development and lower-than-planned catastrophe losses in the first half of $0.74 per share. Second, the update includes a reduction of $0.19 per share to reflect a projected third quarter increase in the year-to-date crop insurance loss ratio. Finally, the update includes estimated catastrophe losses of $270 million after tax for the second half of the year. Guidance for the balance of the year is for the current accident year only.
Please refer to the ACE Limited Financial Supplement, dated June 30, 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.
ACE will host its second quarter earnings conference call and webcast on Wednesday, July 25, 2012, 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 888-516-2435 (within the United States) or 719-325-2339 (international); passcode 3462560. 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, August 8, 2012 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 3462560.
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 .
 
Page 4/9

(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 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.
Annualized operating return on equity (ROE) or annualized ROE calculated using income excluding net realized gains (losses) is a 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)	Refer to the Financial Supplement page 1 for further detail.	
NM – not meaningful comparison
 
Page 5/9

Cautionary Statement Regarding Forward-Looking Statements : 
Forward-looking statements made in this press release, such as those related to company performance and guidance, 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)
 
Page 6/9

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

 	  	June 30
2012 	 	  	December 31
2011	 	
			
Assets	  				  				
Investments	  	$	57,681	 	  	$	55,676	 	
Cash	  	 	617	 	  	 	614	 	
Insurance and reinsurance balances receivable	  	 	4,985	 	  	 	4,387	 	
Reinsurance recoverable on losses and loss expenses	  	 	11,752	 	  	 	12,389	 	
Other assets	  	 	15,666	 	  	 	14,255	 	
	  	 	 	 	  	 	 	 	
Total assets	  	$	90,701	 	  	$	87,321	 	

Liabilities	  				  				
Unpaid losses and loss expenses	  	$	36,850	 	  	$	37,477	 	
Unearned premiums	  	 	7,044	 	  	 	6,334	 	
Other liabilities	  	 	21,045	 	  	 	19,178	 	
	  	 	 	 	  	 	 	 	
Total liabilities	  	 	64,939	 	  	 	62,989	 	

Shareholders’ equity	  				  				
Total shareholders’ equity	  	 	25,762	 	  	 	24,332	 	
	  	 	 	 	  	 	 	 	
Total liabilities and shareholders’ equity	  	$	90,701	 	  	$	87,321	 	

Book value per common share (2) 	  	$ 	75.98 	 	  	$ 	72.22 	 	
 
Page 7/9

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

 	  	Three Months Ended
June 30	 	 	Six Months Ended
June 30	 	
 	  	2012	 	 	2011	 	 	2012	 	 	2011	 	
					
Gross premiums written	  	$	5,653	 	 	$	5,423	 	 	$	10,440	 	 	$	10,067	 	
Net premiums written	  	 	4,130	 	 	 	3,953	 	 	 	7,702	 	 	 	7,399	 	
Net premiums earned	  	 	3,783	 	 	 	3,757	 	 	 	7,164	 	 	 	7,066	 	
Losses and loss expenses	  	 	2,119	 	 	 	2,226	 	 	 	3,923	 	 	 	4,489	 	
Policy benefits	  	 	102	 	 	 	108	 	 	 	249	 	 	 	199	 	
Policy acquisition costs	  	 	619	 	 	 	612	 	 	 	1,201	 	 	 	1,171	 	
Administrative expenses	  	 	514	 	 	 	518	 	 	 	1,024	 	 	 	1,017	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income (2)	  	 	429	 	 	 	293	 	 	 	767	 	 	 	190	 	
					
Net investment income	  	 	537	 	 	 	569	 	 	 	1,081	 	 	 	1,113	 	
Net realized gains (losses)	  	 	(394	) 	 	 	(73	) 	 	 	(134	) 	 	 	(118	) 	
Interest expense	  	 	62	 	 	 	62	 	 	 	124	 	 	 	125	 	
Other income (expense):	  				 				 				 				
Gains (losses) from separate account assets (2)	  	 	(14	) 	 	 	—  	  	 	 	4	 	 	 	—  	  	
Other	  	 	(20	) 	 	 	(12	) 	 	 	(35	) 	 	 	1	 	
Income tax expense	  	 	148	 	 	 	121	 	 	 	258	 	 	 	217	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	328	 	 	$	594	 	 	$	1,301	 	 	$	844	 	

Diluted earnings per share:	  				 				 				 				
Income excluding net realized gains (losses) (2)	  	$	2.17	 	 	$	1.97	 	 	$	4.22	 	 	$	2.74	 	
Net income	  	$	0.96	 	 	$	1.74	 	 	$	3.80	 	 	$	2.48	 	
					
Weighted average diluted shares outstanding	  	 	342.7	 	 	 	341.7	 	 	 	342.2	 	 	 	340.6	 	
					
Loss and loss expense ratio	  	 	59.5	% 	 	 	63.1	% 	 	 	58.3	% 	 	 	68.1	% 	
Policy acquisition cost ratio	  	 	16.1	% 	 	 	16.1	% 	 	 	16.7	% 	 	 	16.3	% 	
Administrative expense ratio	  	 	13.1	% 	 	 	13.5	% 	 	 	13.9	% 	 	 	14.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	88.7	% 	 	 	92.7	% 	 	 	88.9	% 	 	 	98.5	% 	

Page 8/9

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

 	  	Three Months Ended
June 30	 	 	Six Months Ended
June 30	 	
 	  	2012 	 	 	2011	 	 	2012	 	 	2011	 	
					
Gross Premiums Written	  				 				 				 				
					
Insurance - North American	  	$	2,856	 	 	$	2,714	 	 	$	4,868	 	 	$	4,672	 	
Insurance - Overseas General	  	 	1,952	 	 	 	1,898	 	 	 	3,936	 	 	 	3,806	 	
Global Reinsurance	  	 	332	 	 	 	298	 	 	 	611	 	 	 	628	 	
Life	  	 	513	 	 	 	513	 	 	 	1,025	 	 	 	961	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	5,653	 	 	$	5,423	 	 	$	10,440	 	 	$	10,067	 	

Net Premiums Written	  				 				 				 				
					
Insurance - North American	  	$	1,860	 	 	$	1,735	 	 	$	3,153	 	 	$	3,020	 	
Insurance - Overseas General	  	 	1,475	 	 	 	1,443	 	 	 	3,003	 	 	 	2,853	 	
Global Reinsurance	  	 	309	 	 	 	282	 	 	 	572	 	 	 	597	 	
Life	  	 	486	 	 	 	493	 	 	 	974	 	 	 	929	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	4,130	 	 	$	3,953	 	 	$	7,702	 	 	$	7,399	 	

Net Premiums Earned	  				 				 				 				
					
Insurance - North American	  	$	1,652	 	 	$	1,604	 	 	$	2,939	 	 	$	2,950	 	
Insurance - Overseas General	  	 	1,420	 	 	 	1,415	 	 	 	2,811	 	 	 	2,693	 	
Global Reinsurance	  	 	237	 	 	 	254	 	 	 	467	 	 	 	514	 	
Life	  	 	474	 	 	 	484	 	 	 	947	 	 	 	909	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	3,783	 	 	$	3,757	 	 	$	7,164	 	 	$	7,066	 	

Income Excluding Net Realized Gains (Losses) (2) 	  				 				 				 				
					
Insurance - North American	  	$	335	 	 	$	282	 	 	$	669	 	 	$	545	 	
Insurance - Overseas General	  	 	232	 	 	 	221	 	 	 	446	 	 	 	230	 	
Global Reinsurance	  	 	149	 	 	 	144	 	 	 	286	 	 	 	131	 	
Life	  	 	79	 	 	 	88	 	 	 	163	 	 	 	156	 	
Corporate	  	 	(52	) 	 	 	(62	) 	 	 	(120	) 	 	 	(130	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	743	 	 	$	673	 	 	$	1,444	 	 	$	932	 	

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.

 	 	Three months ended June 30	 	 	% Change
2Q-12 vs.	 	 	Constant $ 	 	 	% Change
2Q-12 vs.	 	 	Six months ended June 30	 	 	% Change
YTD-12 vs.	 	 	Constant $ 	 	 	% Change
YTD-12 vs.	 	
 	 	2012	 	 	2011	 	 	2Q-11	 	 	2011 (2)	 	 	2Q-11 (2)	 	 	2012	 	 	2011	 	 	YTD-11	 	 	2011 (2)	 	 	YTD-11  (2)	 	
Gross premiums written	 	$	5,653	  	 	$	5,423	  	 	 	4.2	% 	 	$	5,336	  	 	 	5.9	% 	 	$	10,440	  	 	$	10,067	  	 	 	3.7	% 	 	$	9,955	  	 	 	4.9	% 	
											
Net premiums written	 	$	4,130	  	 	$	3,953	  	 	 	4.5	% 	 	$	3,879	  	 	 	6.5	% 	 	$	7,702	  	 	$	7,399	  	 	 	4.1	% 	 	$	7,300	  	 	 	5.5	% 	
											
Net premiums earned	 	$	3,783	  	 	$	3,757	  	 	 	0.7	% 	 	$	3,675	  	 	 	2.9	% 	 	$	7,164	  	 	$	7,066	  	 	 	1.4	% 	 	$	6,962	  	 	 	2.9	% 	
											
Net investment income	 	$	537	  	 	$	569	  	 	 	-5.5	% 	 				 				 	$	1,081	  	 	$	1,113	  	 	 	-2.8	% 	 				 				
											
Net income	 	$	328	  	 	$	594	  	 	 	-44.7	% 	 				 				 	$	1,301	  	 	$	844	  	 	 	54.0	% 	 				 				
											
Income excluding net realized gains (losses)  (1)	 	$	743	  	 	$	673	  	 	 	10.3	% 	 				 				 	$	1,444	  	 	$	932	  	 	 	54.7	% 	 				 				
											
Comprehensive income	 	$	457	  	 	$	801	  	 	 	-42.9	% 	 				 				 	$	1,728	  	 	$	1,239	  	 	 	39.5	% 	 				 				
											
Operating cash flow	 	$	811	  	 	$	1,060	  	 				 				 				 	$	1,383	  	 	$	2,063	  	 				 				 				
											
P&C combined ratio	 				 				 				 				 				 				 				 				 				 				
Loss and loss expense ratio	 	 	59.5	% 	 	 	63.1	% 	 				 				 				 	 	58.3	% 	 	 	68.1	% 	 				 				 				
Underwriting and administrative expense ratio	 	 	29.2	% 	 	 	29.6	% 	 				 				 				 	 	30.6	% 	 	 	30.4	% 	 				 				 				
	 	 	 	 	 	 	 	 	 				 				 				 	 	 	 	 	 	 	 	 				 				 				
Combined ratio	 	 	88.7	% 	 	 	92.7	% 	 				 				 				 	 	88.9	% 	 	 	98.5	% 	 				 				 				
Annualized return on equity (ROE) calculated using income excluding net realized gains (losses)  (1)	 	 	12.6	% 	 	 	12.2	% 	 				 				 				 	 	12.5	% 	 	 	8.5	% 	 				 				 				
Annualized ROE calculated using net income	 	 	5.1	% 	 	 	10.1	% 	 				 				 				 	 	10.4	% 	 	 	7.2	% 	 				 				 				
											
Effective tax rate on income excluding net realized gains (losses) (1)	 	 	14.6	% 	 	 	14.4	% 	 				 				 				 	 	13.8	% 	 	 	18.4	% 	 				 				 				
Effective tax rate	 	 	31.0	% 	 	 	16.9	% 	 				 				 				 	 	16.6	% 	 	 	20.4	% 	 				 				 				
											
Diluted earnings per share	 				 				 				 				 				 				 				 				 				 				
											
Income excluding net realized gains (losses)  (1)	 	$	2.17	  	 	$	1.97	  	 	 	10.2	% 	 				 				 	$	4.22	  	 	$	2.74	  	 	 	54.0	% 	 				 				
											
Net income	 	$	0.96	  	 	$	1.74	  	 	 	-44.8	% 	 				 				 	$	3.80	  	 	$	2.48	  	 	 	53.2	% 	 				 				
											
Book value per common share  (1)	 				 				 				 				 				 	$	75.98	  	 	$	70.88	  	 	 	7.2	% 	 				 				
Tangible book value per common share  (1)	 				 				 				 				 				 	$	61.75	  	 	$	56.60	  	 	 	9.1	% 	 				 				
											
Weighted average basic common shares outstanding	 	 	339.8	  	 	 	338.9	  	 				 				 				 	 	339.2	  	 	 	338.0	  	 				 				 				
Weighted average diluted common shares outstanding	 	 	342.7	  	 	 	341.7	  	 				 				 				 	 	342.2	  	 	 	340.6	  	 				 				 				
											
Debt/total capitalization	 				 				 				 				 				 	 	15.4	% 	 	 	16.4	% 	 				 				 				
 
(1)	See Non-GAAP Financial Measures.	
(2)	Prior periods on a constant dollar basis.	
Adoption of New Accounting Pronouncement:
Shareholders’ equity and book value per common share at December 31, 2011 and June 30, 2011 and annualized ROE percentages for the three and six months ended June 30, 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 and six months ended June 30, 2011 was a decrease of $12 million and $22 million, respectively.

Financial Highlights	 	Page 1	

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

																																	
ACE Limited Consolidated	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	YTD
2012	 	 	YTD
2011	 	 	Full Year
2011	 	
Consolidated Results Excluding Life Segment	  				 				 				 				 				 				 				 				
Gross premiums written	  	$	5,140	  	 	$	4,275	  	 	$	4,344	  	 	$	5,391	  	 	$	4,910	  	 	$	9,415	  	 	$	9,106	  	 	$	18,841	  	
Net premiums written	  	 	3,644	  	 	 	3,084	  	 	 	3,134	  	 	 	3,855	  	 	 	3,460	  	 	 	6,728	  	 	 	6,470	  	 	 	13,459	  	
Net premiums earned	  	 	3,309	  	 	 	2,908	  	 	 	3,361	  	 	 	4,010	  	 	 	3,273	  	 	 	6,217	  	 	 	6,157	  	 	 	13,528	  	
Losses and loss expenses	  	 	1,968	  	 	 	1,656	  	 	 	2,132	  	 	 	2,603	  	 	 	2,067	  	 	 	3,624	  	 	 	4,192	  	 	 	8,927	  	
Policy acquisition costs	  	 	531	  	 	 	506	  	 	 	546	  	 	 	577	  	 	 	527	  	 	 	1,037	  	 	 	1,010	  	 	 	2,133	  	
Administrative expenses	  	 	436	  	 	 	432	  	 	 	447	  	 	 	439	  	 	 	440	  	 	 	868	  	 	 	865	  	 	 	1,751	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income excluding Life segment (1)	  	 	374	  	 	 	314	  	 	 	236	  	 	 	391	  	 	 	239	  	 	 	688	  	 	 	90	  	 	 	717	  	
Life underwriting income excluding investment income and gains (losses) from fair value changes in separate account assets (2)	  	 	55	  	 	 	24	  	 	 	27	  	 	 	82	  	 	 	54	  	 	 	79	  	 	 	100	  	 	 	209	  	
Net investment income	  	 	537	  	 	 	544	  	 	 	565	  	 	 	564	  	 	 	569	  	 	 	1,081	  	 	 	1,113	  	 	 	2,242	  	
Net realized gains (losses)	  	 	(394	) 	 	 	260	  	 	 	83	  	 	 	(760	) 	 	 	(73	) 	 	 	(134	) 	 	 	(118	) 	 	 	(795	) 	
Interest expense	  	 	62	  	 	 	62	  	 	 	63	  	 	 	62	  	 	 	62	  	 	 	124	  	 	 	125	  	 	 	250	  	
Other income (expense): (2)	  				 				 				 				 				 				 				 				
Gains (losses) from fair value changes in separate account assets	  	 	(14	) 	 	 	18	  	 	 	3	  	 	 	(39	) 	 	 	—  	  	 	 	4	  	 	 	—  	  	 	 	(36	) 	
Other	  	 	(20	) 	 	 	(15	) 	 	 	4	  	 	 	(50	) 	 	 	(12	) 	 	 	(35	) 	 	 	1	  	 	 	(45	) 	
Income tax expense	  	 	148	  	 	 	110	  	 	 	120	  	 	 	165	  	 	 	121	  	 	 	258	  	 	 	217	  	 	 	502	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	328	  	 	 	973	  	 	 	735	  	 	 	(39	) 	 	 	594	  	 	 	1,301	  	 	 	844	  	 	 	1,540	  	
									
Net realized gains (losses)	  	 	(394	) 	 	 	260	  	 	 	83	  	 	 	(760	) 	 	 	(73	) 	 	 	(134	) 	 	 	(118	) 	 	 	(795	) 	
Net realized gains (losses) in other income (expense) (3)	  	 	1	  	 	 	18	  	 	 	16	  	 	 	(28	) 	 	 	2	  	 	 	19	  	 	 	36	  	 	 	24	  	
Tax expense on net realized gains (losses)	  	 	22	  	 	 	6	  	 	 	12	  	 	 	2	  	 	 	8	  	 	 	28	  	 	 	6	  	 	 	20	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	743	  	 	$	701	  	 	$	648	  	 	$	751	  	 	$	673	  	 	$	1,444	  	 	$	932	  	 	$	2,331	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period (4)	  				 				 				 				 				 				 				 				
Net premiums written as reported	  	 	5.3	% 	 	 	2.5	% 	 	 	4.9	% 	 	 	33.0	% 	 	 	15.0	% 	 	 	4.0	% 	 	 	4.8	% 	 	 	11.6	% 	
Net premiums earned as reported	  	 	1.1	% 	 	 	0.8	% 	 	 	6.4	% 	 	 	33.1	% 	 	 	15.9	% 	 	 	1.0	% 	 	 	8.0	% 	 	 	13.9	% 	
Net premiums written constant $	  	 	7.4	% 	 				 				 				 				 	 	5.4	% 	 				 				
Net premiums earned constant $	  	 	3.4	% 	 				 				 				 				 	 	2.5	% 	 				 				
Other ratios	  				 				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	71	% 	 	 	72	% 	 	 	72	% 	 	 	72	% 	 	 	70	% 	 	 	71	% 	 	 	71	% 	 	 	71	% 	
Effective tax rate on income excluding net realized gains (losses) (1)	  	 	14.6	% 	 	 	13.0	% 	 	 	14.4	% 	 	 	17.7	% 	 	 	14.4	% 	 	 	13.8	% 	 	 	18.4	% 	 	 	17.1	% 	
									
P&C combined ratio (4)	  				 				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	59.5	% 	 	 	56.9	% 	 	 	63.4	% 	 	 	64.9	% 	 	 	63.1	% 	 	 	58.3	% 	 	 	68.1	% 	 	 	66.0	% 	
Policy acquisition cost ratio	  	 	16.1	% 	 	 	17.4	% 	 	 	16.3	% 	 	 	14.4	% 	 	 	16.1	% 	 	 	16.7	% 	 	 	16.3	% 	 	 	15.8	% 	
Administrative expense ratio	  	 	13.1	% 	 	 	14.9	% 	 	 	13.3	% 	 	 	10.9	% 	 	 	13.5	% 	 	 	13.9	% 	 	 	14.1	% 	 	 	12.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	88.7	% 	 	 	89.2	% 	 	 	93.0	% 	 	 	90.2	% 	 	 	92.7	% 	 	 	88.9	% 	 	 	98.5	% 	 	 	94.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
P&C expense ratio	  	 	29.2	% 	 	 	32.3	% 	 	 	29.6	% 	 	 	25.3	% 	 	 	29.6	% 	 	 	30.6	% 	 	 	30.4	% 	 	 	28.7	% 	
P&C expense ratio excluding A&H	  	 	25.3	% 	 	 	28.4	% 	 	 	25.5	% 	 	 	21.0	% 	 	 	25.1	% 	 	 	26.8	% 	 	 	26.2	% 	 	 	24.7	% 	
Large losses and other items (before tax)  (4)	  				 				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	26	  	 	$	8	  	 	$	—  	  	 	$	(66	) 	 	$	(40	) 	
Catastrophe losses	  	$	55	  	 	$	19	  	 	$	155	  	 	$	147	  	 	$	142	  	 	$	74	  	 	$	557	  	 	$	859	  	
Prior period development (PPD) - unfavorable (favorable)  (5)	  	$	(113	) 	 	$	(93	) 	 	$	(123	) 	 	$	(194	) 	 	$	(146	) 	 	$	(206	) 	 	$	(239	) 	 	$	(556	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1) (5)	  	 	61.2	% 	 	 	59.5	% 	 	 	62.5	% 	 	 	66.7	% 	 	 	63.4	% 	 	 	60.4	% 	 	 	62.3	% 	 	 	63.6	% 	
 
(1)	See Non-GAAP Financial Measures.	
(2)	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.	
(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 Q3 2011, favorable prior period development is net of $26 million of net earned premium adjustments on loss sensitive policies.	

Consolidated Results	 	Page 2	

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

													
 	  	June 30
2012	 	 	March 31
2012	 	 	December 31
2011	 	
Assets	  				 				 				
Fixed maturities available for sale, at fair value	  	$	44,386	  	 	$	43,468	  	 	$	41,967	  	
Fixed maturities held to maturity, at amortized cost	  	 	7,782	  	 	 	8,117	  	 	 	8,447	  	
Equity securities, at fair value	  	 	729	  	 	 	679	  	 	 	647	  	
Short-term investments, at fair value	  	 	2,260	  	 	 	2,099	  	 	 	2,301	  	
Other investments	  	 	2,524	  	 	 	2,429	  	 	 	2,314	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total investments	  	 	57,681	  	 	 	56,792	  	 	 	55,676	  	
				
Cash	  	 	617	  	 	 	715	  	 	 	614	  	
Securities lending collateral	  	 	2,247	  	 	 	2,204	  	 	 	1,375	  	
Insurance and reinsurance balances receivable	  	 	4,985	  	 	 	4,487	  	 	 	4,387	  	
Reinsurance recoverable on losses and loss expenses	  	 	11,752	  	 	 	12,057	  	 	 	12,389	  	
Deferred policy acquisition costs	  	 	1,710	  	 	 	1,649	  	 	 	1,548	  	
Value of business acquired	  	 	637	  	 	 	669	  	 	 	676	  	
Prepaid reinsurance premiums	  	 	1,775	  	 	 	1,643	  	 	 	1,541	  	
Goodwill and other intangible assets	  	 	4,826	  	 	 	4,860	  	 	 	4,799	  	
Deferred tax assets	  	 	557	  	 	 	568	  	 	 	673	  	
Investments in partially-owned insurance companies	  	 	339	  	 	 	346	  	 	 	352	  	
Other assets	  	 	3,575	  	 	 	3,759	  	 	 	3,291	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	90,701	  	 	$	89,749	  	 	$	87,321	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	  				 				 				
Unpaid losses and loss expenses	  	$	36,850	  	 	$	37,247	  	 	$	37,477	  	
Unearned premiums	  	 	7,044	  	 	 	6,664	  	 	 	6,334	  	
Future policy benefits	  	 	4,436	  	 	 	4,358	  	 	 	4,274	  	
Insurance and reinsurance balances payable	  	 	3,490	  	 	 	3,454	  	 	 	3,542	  	
Securities lending payable	  	 	2,253	  	 	 	2,211	  	 	 	1,385	  	
Payable for securities purchased	  	 	692	  	 	 	569	  	 	 	287	  	
Accounts payable, accrued expenses, and other liabilities	  	 	5,104	  	 	 	4,615	  	 	 	4,770	  	
Short-term debt	  	 	1,401	  	 	 	1,531	  	 	 	1,251	  	
Long-term debt	  	 	3,360	  	 	 	3,360	  	 	 	3,360	  	
Trust preferred securities	  	 	309	  	 	 	309	  	 	 	309	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	  	 	64,939	  	 	 	64,318	  	 	 	62,989	  	
				
Shareholders’ equity	  				 				 				
Total shareholders’ equity, excl. AOCI	  	 	23,424	  	 	 	23,222	  	 	 	22,421	  	
Accumulated other comprehensive income (AOCI)	  	 	2,338	  	 	 	2,209	  	 	 	1,911	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	25,762	  	 	 	25,431	  	 	 	24,332	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	90,701	  	 	$	89,749	  	 	$	87,321	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Book value per common share (1) 	  	$	75.98	  	 	$	75.09	  	 	$	72.22	  	
% change over prior quarter	  	 	1.2	% 	 	 	4.0	% 	 	 	3.0	% 	
Tangible book value per common share (1) 	  	$	61.75	  	 	$	60.74	  	 	$	57.97	  	
% change over prior quarter	  	 	1.7	% 	 	 	4.8	% 	 	 	3.7	% 	
 
(1)	See Non-GAAP Financial Measures.	

Consol Bal Sheet	 	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

 	 	2Q-12	 	 	% of
Total
Consolidated	 	 	2Q-11	 	 	% of
Total
Consolidated	 	 	% Change
2Q-12 vs.
2Q-11	 	 	YTD
2012	 	 	% of
Total
Consolidated	 	 	YTD
2011	 	 	% of
Total
Consolidated	 	 	% Change
YTD-12 vs.
YTD-11	 	
Net premiums written	 				 				 				 				 				 				 				 				 				 				
Property and all other	 	$	1,227	  	 	 	30	% 	 	$	1,092	  	 	 	28	% 	 	 	12.4	% 	 	$	2,339	  	 	 	30	% 	 	$	2,053	  	 	 	28	% 	 	 	13.9	% 	
Agriculture	 	 	492	  	 	 	12	% 	 	 	495	  	 	 	13	% 	 	 	-0.5	% 	 	 	611	  	 	 	8	% 	 	 	613	  	 	 	8	% 	 	 	-0.2	% 	
Casualty	 	 	1,286	  	 	 	31	% 	 	 	1,240	  	 	 	31	% 	 	 	3.7	% 	 	 	2,500	  	 	 	33	% 	 	 	2,547	  	 	 	34	% 	 	 	-1.8	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Subtotal	 	 	3,005	  	 	 	73	% 	 	 	2,827	  	 	 	72	% 	 	 	6.3	% 	 	 	5,450	  	 	 	71	% 	 	 	5,213	  	 	 	70	% 	 	 	4.5	% 	
Personal accident (A&H) (1)	 	 	883	  	 	 	21	% 	 	 	882	  	 	 	22	% 	 	 	0.1	% 	 	 	1,765	  	 	 	23	% 	 	 	1,754	  	 	 	24	% 	 	 	0.6	% 	
Life	 	 	242	  	 	 	6	% 	 	 	244	  	 	 	6	% 	 	 	-0.8	% 	 	 	487	  	 	 	6	% 	 	 	432	  	 	 	6	% 	 	 	12.7	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	4,130	  	 	 	100	% 	 	$	3,953	  	 	 	100	% 	 	 	4.5	% 	 	$	7,702	  	 	 	100	% 	 	$	7,399	  	 	 	100	% 	 	 	4.1	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Net premiums earned	 				 				 				 				 				 				 				 				 				 				
Property and all other	 	$	1,013	  	 	 	27	% 	 	$	940	  	 	 	25	% 	 	 	7.8	% 	 	$	1,983	  	 	 	28	% 	 	$	1,775	  	 	 	25	% 	 	 	11.7	% 	
Agriculture	 	 	384	  	 	 	10	% 	 	 	356	  	 	 	10	% 	 	 	7.8	% 	 	 	443	  	 	 	6	% 	 	 	434	  	 	 	6	% 	 	 	2.1	% 	
Casualty	 	 	1,289	  	 	 	34	% 	 	 	1,352	  	 	 	36	% 	 	 	-4.7	% 	 	 	2,559	  	 	 	36	% 	 	 	2,732	  	 	 	39	% 	 	 	-6.3	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Subtotal	 	 	2,686	  	 	 	71	% 	 	 	2,648	  	 	 	71	% 	 	 	1.4	% 	 	 	4,985	  	 	 	70	% 	 	 	4,941	  	 	 	70	% 	 	 	0.5	% 	
Personal accident (A&H) (1)	 	 	871	  	 	 	23	% 	 	 	878	  	 	 	23	% 	 	 	-0.8	% 	 	 	1,723	  	 	 	24	% 	 	 	1,715	  	 	 	24	% 	 	 	0.5	% 	
Life	 	 	226	  	 	 	6	% 	 	 	231	  	 	 	6	% 	 	 	-2.2	% 	 	 	456	  	 	 	6	% 	 	 	410	  	 	 	6	% 	 	 	11.2	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	3,783	  	 	 	100	% 	 	$	3,757	  	 	 	100	% 	 	 	0.7	% 	 	$	7,164	  	 	 	100	% 	 	$	7,066	  	 	 	100	% 	 	 	1.4	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Income excluding net realized gains (losses)	 				 				 				 				 				 				 				 				 				 				
											
Property, casualty, and all other	 	$	555	  	 	 	75	% 	 	$	498	  	 	 	74	% 	 	 	11.4	% 	 	$	1,071	  	 	 	74	% 	 	$	606	  	 	 	65	% 	 	 	76.7	% 	
Agriculture	 	 	30	  	 	 	4	% 	 	 	14	  	 	 	2	% 	 	 	116.9	% 	 	 	55	  	 	 	4	% 	 	 	25	  	 	 	3	% 	 	 	120.0	% 	
Personal accident (A&H) (1)	 	 	121	  	 	 	16	% 	 	 	119	  	 	 	18	% 	 	 	3.0	% 	 	 	240	  	 	 	17	% 	 	 	227	  	 	 	24	% 	 	 	6.4	% 	
Life	 	 	37	  	 	 	5	% 	 	 	42	  	 	 	6	% 	 	 	-11.9	% 	 	 	78	  	 	 	5	% 	 	 	74	  	 	 	8	% 	 	 	5.4	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total consolidated	 	$	743	  	 	 	100	% 	 	$	673	  	 	 	100	% 	 	 	10.2	% 	 	$	1,444	  	 	 	100	% 	 	$	932	  	 	 	100	% 	 	 	54.7	% 	

(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.	

Line of Business	 	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

 	  	2Q-12	 	  	Constant $
2Q-11   (2)	 	  	Constant $
% Change
2Q-12 vs.
2Q-11 (2)	 	 	YTD
2012	 	  	Constant $
YTD
2011  (2)	 	  	Constant $
% Change
YTD-12 vs.
YTD-11 (2)	 	
Net premiums written	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	3,005	  	  	$	2,788	  	  	 	7.8	% 	 	$	5,450	  	  	$	5,159	  	  	 	5.6	% 	
Personal accident (A&H) (1)	  	 	883	  	  	 	854	  	  	 	3.5	% 	 	 	1,765	  	  	 	1,718	  	  	 	2.7	% 	
Life	  	 	242	  	  	 	237	  	  	 	2.1	% 	 	 	487	  	  	 	423	  	  	 	15.1	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	4,130	  	  	$	3,879	  	  	 	6.5	% 	 	$	7,702	  	  	$	7,300	  	  	 	5.5	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Net premiums earned	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	2,686	  	  	$	2,602	  	  	 	3.2	% 	 	$	4,985	  	  	$	4,883	  	  	 	2.1	% 	
Personal accident (A&H) (1)	  	 	871	  	  	 	848	  	  	 	2.7	% 	 	 	1,723	  	  	 	1,677	  	  	 	2.7	% 	
Life	  	 	226	  	  	 	226	  	  	 	0.0	% 	 	 	456	  	  	 	402	  	  	 	13.4	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	3,783	  	  	$	3,676	  	  	 	2.9	% 	 	$	7,164	  	  	$	6,962	  	  	 	2.9	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Income excluding net realized gains (losses)	  				  				  				 				  				  				
Property, casualty, agriculture, and all other	  	$	585	  	  	$	508	  	  	 	15.2	% 	 	$	1,126	  	  	$	614	  	  	 	83.4	% 	
Personal accident (A&H) (1)	  	 	121	  	  	 	113	  	  	 	6.6	% 	 	 	240	  	  	 	221	  	  	 	8.3	% 	
Life	  	 	37	  	  	 	43	  	  	 	-14.0	% 	 	 	78	  	  	 	74	  	  	 	5.4	% 	
	  	 	 	 	  	 	 	 	  				 	 	 	 	  	 	 	 	  				
Total consolidated	  	$	743	  	  	$	664	  	  	 	12.0	% 	 	$	1,444	  	  	$	909	  	  	 	58.8	% 	

(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.	

Line of Business 2	 	Page 5	

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

 	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	YTD
2012	 	 	YTD
2011	 	 	Full Year
2011	 	
Gross premiums written	  	$	2,856	  	 	$	2,012	  	 	$	2,394	  	 	$	3,294	  	 	$	2,714	  	 	$	4,868	  	 	$	4,672	  	 	$	10,360	  	
Net premiums written	  	 	1,860	  	 	 	1,293	  	 	 	1,624	  	 	 	2,207	  	 	 	1,735	  	 	 	3,153	  	 	 	3,020	  	 	 	6,851	  	
Net premiums earned	  	 	1,652	  	 	 	1,287	  	 	 	1,662	  	 	 	2,299	  	 	 	1,604	  	 	 	2,939	  	 	 	2,950	  	 	 	6,911	  	
Losses and loss expenses	  	 	1,163	  	 	 	849	  	 	 	1,211	  	 	 	1,838	  	 	 	1,233	  	 	 	2,012	  	 	 	2,227	  	 	 	5,276	  	
Policy acquisition costs	  	 	157	  	 	 	127	  	 	 	157	  	 	 	174	  	 	 	145	  	 	 	284	  	 	 	281	  	 	 	612	  	
Administrative expenses	  	 	153	  	 	 	147	  	 	 	144	  	 	 	153	  	 	 	147	  	 	 	300	  	 	 	295	  	 	 	592	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income	  	 	179	  	 	 	164	  	 	 	150	  	 	 	134	  	 	 	79	  	 	 	343	  	 	 	147	  	 	 	431	  	
									
Net investment income	  	 	271	  	 	 	274	  	 	 	284	  	 	 	291	  	 	 	300	  	 	 	545	  	 	 	595	  	 	 	1,170	  	
Net realized gains (losses)	  	 	18	  	 	 	(1	) 	 	 	26	  	 	 	(2	) 	 	 	21	  	 	 	17	  	 	 	10	  	 	 	34	  	
Interest expense	  	 	3	  	 	 	3	  	 	 	4	  	 	 	4	  	 	 	3	  	 	 	6	  	 	 	7	  	 	 	15	  	
Other income (expense)	  	 	(10	) 	 	 	1	  	 	 	3	  	 	 	(21	) 	 	 	(3	) 	 	 	(9	) 	 	 	13	  	 	 	(5	) 	
Income tax expense	  	 	107	  	 	 	91	  	 	 	91	  	 	 	120	  	 	 	95	  	 	 	198	  	 	 	184	  	 	 	395	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	348	  	 	 	344	  	 	 	368	  	 	 	278	  	 	 	299	  	 	 	692	  	 	 	574	  	 	 	1,220	  	
									
Net realized gains (losses)	  	 	18	  	 	 	(1	) 	 	 	26	  	 	 	(2	) 	 	 	21	  	 	 	17	  	 	 	10	  	 	 	34	  	
Net realized gains (losses) in other income (expense)	  	 	5	  	 	 	15	  	 	 	10	  	 	 	(9	) 	 	 	3	  	 	 	20	  	 	 	27	  	 	 	28	  	
Tax expense on net realized gains (losses)	  	 	10	  	 	 	4	  	 	 	10	  	 	 	1	  	 	 	7	  	 	 	14	  	 	 	8	  	 	 	19	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	335	  	 	$	334	  	 	$	342	  	 	$	290	  	 	$	282	  	 	$	669	  	 	$	545	  	 	$	1,177	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	70.4	% 	 	 	66.0	% 	 	 	72.8	% 	 	 	80.0	% 	 	 	76.9	% 	 	 	68.5	% 	 	 	75.5	% 	 	 	76.3	% 	
Policy acquisition cost ratio	  	 	9.5	% 	 	 	9.9	% 	 	 	9.5	% 	 	 	7.6	% 	 	 	9.0	% 	 	 	9.7	% 	 	 	9.5	% 	 	 	8.9	% 	
Administrative expense ratio	  	 	9.3	% 	 	 	11.4	% 	 	 	8.7	% 	 	 	6.6	% 	 	 	9.2	% 	 	 	10.1	% 	 	 	10.0	% 	 	 	8.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	89.2	% 	 	 	87.3	% 	 	 	91.0	% 	 	 	94.2	% 	 	 	95.1	% 	 	 	88.3	% 	 	 	95.0	% 	 	 	93.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	—  	  	 	$	—  	  	 	$	7	  	 	$	—  	  	 	$	—  	  	 	$	(12	) 	 	$	(5	) 	
Catastrophe losses	  	$	49	  	 	$	16	  	 	$	42	  	 	$	119	  	 	$	110	  	 	$	65	  	 	$	186	  	 	$	347	  	
Prior period development (PPD) - unfavorable (favorable) (2)	  	$	(59	) 	 	$	(60	) 	 	$	(31	) 	 	$	(58	) 	 	$	(71	) 	 	$	(119	) 	 	$	(106	) 	 	$	(195	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1) (2)	  	 	71.1	% 	 	 	69.3	% 	 	 	72.2	% 	 	 	77.6	% 	 	 	74.4	% 	 	 	70.3	% 	 	 	72.5	% 	 	 	74.1	% 	
									
% Change versus prior year period	  				 				 				 				 				 				 				 				
Net premiums written	  	 	7.2	% 	 	 	0.6	% 	 	 	6.9	% 	 	 	52.7	% 	 	 	20.7	% 	 	 	4.4	% 	 	 	6.6	% 	 	 	18.2	% 	
Net premiums earned	  	 	3.0	% 	 	 	-4.4	% 	 	 	10.0	% 	 	 	59.2	% 	 	 	21.0	% 	 	 	-0.4	% 	 	 	9.4	% 	 	 	22.3	% 	
									
Other ratios	  				 				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	65	% 	 	 	64	% 	 	 	68	% 	 	 	67	% 	 	 	64	% 	 	 	65	% 	 	 	65	% 	 	 	66	% 	
 
(1)	See Non-GAAP Financial Measures.	
(2)	For Q3 2011, favorable prior period development is net of $13 million of net earned premium adjustments on loss sensitive policies.	

Insurance-North American	 	Page 6	

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

 	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	YTD
2012	 	 	YTD
2011	 	 	Full Year
2011	 	
Gross premiums written	  	$	1,952	  	 	$	1,984	  	 	$	1,818	  	 	$	1,843	  	 	$	1,898	  	 	$	3,936	  	 	$	3,806	  	 	$	7,467	  	
Net premiums written	  	 	1,475	  	 	 	1,528	  	 	 	1,378	  	 	 	1,398	  	 	 	1,443	  	 	 	3,003	  	 	 	2,853	  	 	 	5,629	  	
Net premiums earned	  	 	1,420	  	 	 	1,391	  	 	 	1,450	  	 	 	1,471	  	 	 	1,415	  	 	 	2,811	  	 	 	2,693	  	 	 	5,614	  	
Losses and loss expenses	  	 	703	  	 	 	705	  	 	 	785	  	 	 	671	  	 	 	721	  	 	 	1,408	  	 	 	1,573	  	 	 	3,029	  	
Policy acquisition costs	  	 	332	  	 	 	335	  	 	 	346	  	 	 	353	  	 	 	335	  	 	 	667	  	 	 	636	  	 	 	1,335	  	
Administrative expenses	  	 	233	  	 	 	229	  	 	 	241	  	 	 	236	  	 	 	239	  	 	 	462	  	 	 	462	  	 	 	939	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income	  	 	152	  	 	 	122	  	 	 	78	  	 	 	211	  	 	 	120	  	 	 	274	  	 	 	22	  	 	 	311	  	
									
Net investment income	  	 	128	  	 	 	131	  	 	 	140	  	 	 	138	  	 	 	137	  	 	 	259	  	 	 	268	  	 	 	546	  	
Net realized gains (losses)	  	 	26	  	 	 	20	  	 	 	51	  	 	 	1	  	 	 	(10	) 	 	 	46	  	 	 	(19	) 	 	 	33	  	
Interest expense	  	 	1	  	 	 	1	  	 	 	1	  	 	 	2	  	 	 	1	  	 	 	2	  	 	 	2	  	 	 	5	  	
Other income (expense)	  	 	(6	) 	 	 	—  	  	 	 	3	  	 	 	(10	) 	 	 	5	  	 	 	(6	) 	 	 	7	  	 	 	—  	  	
Income tax expense	  	 	51	  	 	 	38	  	 	 	52	  	 	 	56	  	 	 	39	  	 	 	89	  	 	 	56	  	 	 	164	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	248	  	 	 	234	  	 	 	219	  	 	 	282	  	 	 	212	  	 	 	482	  	 	 	220	  	 	 	721	  	
									
Net realized gains (losses)	  	 	26	  	 	 	20	  	 	 	51	  	 	 	1	  	 	 	(10	) 	 	 	46	  	 	 	(19	) 	 	 	33	  	
Net realized gains (losses) in other income (expense)	  	 	(3	) 	 	 	3	  	 	 	2	  	 	 	(10	) 	 	 	1	  	 	 	—  	  	 	 	6	  	 	 	(2	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	7	  	 	 	3	  	 	 	3	  	 	 	1	  	 	 	—  	  	 	 	10	  	 	 	(3	) 	 	 	1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) (1)	  	$	232	  	 	$	214	  	 	$	169	  	 	$	292	  	 	$	221	  	 	$	446	  	 	$	230	  	 	$	691	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	49.6	% 	 	 	50.7	% 	 	 	54.1	% 	 	 	45.6	% 	 	 	51.0	% 	 	 	50.1	% 	 	 	58.4	% 	 	 	54.0	% 	
Policy acquisition cost ratio	  	 	23.4	% 	 	 	24.1	% 	 	 	23.8	% 	 	 	24.1	% 	 	 	23.6	% 	 	 	23.7	% 	 	 	23.6	% 	 	 	23.8	% 	
Administrative expense ratio	  	 	16.3	% 	 	 	16.4	% 	 	 	16.6	% 	 	 	15.9	% 	 	 	17.0	% 	 	 	16.5	% 	 	 	17.2	% 	 	 	16.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	89.3	% 	 	 	91.2	% 	 	 	94.5	% 	 	 	85.6	% 	 	 	91.6	% 	 	 	90.3	% 	 	 	99.2	% 	 	 	94.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	—  	  	 	$	1	  	 	$	17	  	 	$	3	  	 	$	—  	  	 	$	(60	) 	 	$	(42	) 	
Catastrophe losses	  	$	5	  	 	$	2	  	 	$	98	  	 	$	34	  	 	$	10	  	 	$	7	  	 	$	197	  	 	$	329	  	
Prior period development (PPD) - unfavorable (favorable)	  	$	(39	) 	 	$	(22	) 	 	$	(80	) 	 	$	(126	) 	 	$	(40	) 	 	$	(61	) 	 	$	(84	) 	 	$	(290	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1)	  	 	51.9	% 	 	 	52.1	% 	 	 	53.0	% 	 	 	52.5	% 	 	 	53.2	% 	 	 	52.0	% 	 	 	53.1	% 	 	 	52.9	% 	
									
% Change versus prior year period	  				 				 				 				 				 				 				 				
Net premiums written as reported	  	 	2.2	% 	 	 	8.4	% 	 	 	3.9	% 	 	 	18.3	% 	 	 	12.6	% 	 	 	5.2	% 	 	 	6.4	% 	 	 	8.5	% 	
Net premiums earned as reported	  	 	0.3	% 	 	 	8.8	% 	 	 	5.1	% 	 	 	13.3	% 	 	 	13.9	% 	 	 	4.4	% 	 	 	8.8	% 	 	 	9.0	% 	
Net premiums written constant $	  	 	6.7	% 	 				 				 				 				 	 	8.3	% 	 				 				
Net premiums earned constant $	  	 	5.5	% 	 				 				 				 				 	 	7.9	% 	 				 				
									
Other ratios	  				 				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	76	% 	 	 	77	% 	 	 	76	% 	 	 	76	% 	 	 	76	% 	 	 	76	% 	 	 	75	% 	 	 	75	% 	
 
(1)	See Non-GAAP Financial Measures.	

Insurance-Overseas General	 	Page 7	

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

 	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	YTD
2012	 	 	YTD
2011	 	 	Full Year
2011	 	
Gross premiums written	  	$	332	  	 	$	279	  	 	$	132	  	 	$	254	  	 	$	298	  	 	$	611	  	 	$	628	  	 	$	1,014	  	
Net premiums written	  	 	309	  	 	 	263	  	 	 	132	  	 	 	250	  	 	 	282	  	 	 	572	  	 	 	597	  	 	 	979	  	
Net premiums earned	  	 	237	  	 	 	230	  	 	 	249	  	 	 	240	  	 	 	254	  	 	 	467	  	 	 	514	  	 	 	1,003	  	
Losses and loss expenses	  	 	102	  	 	 	102	  	 	 	136	  	 	 	94	  	 	 	112	  	 	 	204	  	 	 	391	  	 	 	621	  	
Policy acquisition costs	  	 	42	  	 	 	43	  	 	 	42	  	 	 	50	  	 	 	47	  	 	 	85	  	 	 	93	  	 	 	185	  	
Administrative expenses	  	 	13	  	 	 	12	  	 	 	14	  	 	 	12	  	 	 	14	  	 	 	25	  	 	 	26	  	 	 	52	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underwriting income	  	 	80	  	 	 	73	  	 	 	57	  	 	 	84	  	 	 	81	  	 	 	153	  	 	 	4	  	 	 	145	  	
									
Net investment income	  	 	70	  	 	 	71	  	 	 	74	  	 	 	70	  	 	 	71	  	 	 	141	  	 	 	143	  	 	 	287	  	
Net realized gains (losses)	  	 	(17	) 	 	 	13	  	 	 	6	  	 	 	(29	) 	 	 	(14	) 	 	 	(4	) 	 	 	(27	) 	 	 	(50	) 	
Interest expense	  	 	1	  	 	 	1	  	 	 	1	  	 	 	—  	  	 	 	1	  	 	 	2	  	 	 	1	  	 	 	2	  	
Other income (expense)	  	 	(3	) 	 	 	5	  	 	 	3	  	 	 	(7	) 	 	 	(1	) 	 	 	2	  	 	 	5	  	 	 	1	  	
Income tax expense	  	 	—  	  	 	 	6	  	 	 	5	  	 	 	7	  	 	 	8	  	 	 	6	  	 	 	18	  	 	 	30	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	129	  	 	 	155	  	 	 	134	  	 	 	111	  	 	 	128	  	 	 	284	  	 	 	106	  	 	 	351	  	
									
Net realized gains (losses)	  	 	(17	) 	 	 	13	  	 	 	6	  	 	 	(29	) 	 	 	(14	) 	 	 	(4	) 	 	 	(27	) 	 	 	(50	) 	
Net realized gains (losses) in other income (expense)	  	 	(3	) 	 	 	5	  	 	 	3	  	 	 	(6	) 	 	 	(2	) 	 	 	2	  	 	 	2	  	 	 	(1	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)  (1)	  	$	149	  	 	$	137	  	 	$	125	  	 	$	145	  	 	$	144	  	 	$	286	  	 	$	131	  	 	$	401	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  				 				 				 				 				 				 				 				
Loss and loss expense ratio	  	 	42.5	% 	 	 	44.4	% 	 	 	54.8	% 	 	 	39.2	% 	 	 	44.1	% 	 	 	43.5	% 	 	 	76.1	% 	 	 	62.0	% 	
Policy acquisition cost ratio	  	 	17.8	% 	 	 	18.7	% 	 	 	17.0	% 	 	 	20.6	% 	 	 	18.5	% 	 	 	18.3	% 	 	 	18.1	% 	 	 	18.4	% 	
Administrative expense ratio	  	 	5.8	% 	 	 	5.2	% 	 	 	5.3	% 	 	 	5.6	% 	 	 	5.3	% 	 	 	5.3	% 	 	 	4.9	% 	 	 	5.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined ratio	  	 	66.1	% 	 	 	68.3	% 	 	 	77.1	% 	 	 	65.4	% 	 	 	67.9	% 	 	 	67.1	% 	 	 	99.1	% 	 	 	85.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Large losses and other items (before tax)	  				 				 				 				 				 				 				 				
Reinstatement premiums (expensed) collected	  	$	—  	  	 	$	—  	  	 	$	(1	) 	 	$	2	  	 	$	5	  	 	$	—  	  	 	$	6	  	 	$	7	  	
Catastrophe losses	  	$	1	  	 	$	1	  	 	$	15	  	 	$	(6	) 	 	$	22	  	 	$	2	  	 	$	174	  	 	$	183	  	
Prior period development (PPD) - unfavorable (favorable) (2)	  	$	(15	) 	 	$	(11	) 	 	$	(12	) 	 	$	(10	) 	 	$	(35	) 	 	$	(26	) 	 	$	(49	) 	 	$	(71	) 	
Loss and loss expense ratio excluding catastrophe losses and PPD (1) (2)	  	 	48.3	% 	 	 	48.7	% 	 	 	53.2	% 	 	 	49.1	% 	 	 	50.1	% 	 	 	48.5	% 	 	 	52.2	% 	 	 	51.7	% 	
									
% Change versus prior year period	  				 				 				 				 				 				 				 				
Net premiums written as reported	  	 	9.4	% 	 	 	-16.5	% 	 	 	-7.7	% 	 	 	-8.1	% 	 	 	-2.4	% 	 	 	-4.2	% 	 	 	-9.5	% 	 	 	-8.9	% 	
Net premiums earned as reported	  	 	-6.5	% 	 	 	-11.5	% 	 	 	-7.1	% 	 	 	-11.4	% 	 	 	-0.8	% 	 	 	-9.0	% 	 	 	-3.4	% 	 	 	-6.3	% 	
									
Net premiums written constant $	  	 	9.9	% 	 				 				 				 				 	 	-3.6	% 	 				 				
Net premiums earned constant $	  	 	-5.9	% 	 				 				 				 				 	 	-8.6	% 	 				 				
									
Other ratios	  				 				 				 				 				 				 				 				
Net premiums written/gross premiums written	  	 	93	% 	 	 	94	% 	 	 	100	% 	 	 	99	% 	 	 	95	% 	 	 	93	% 	 	 	95	% 	 	 	97	% 	
 
(1)	See Non-GAAP Financial Measures.	
(2)	For Q3 2011, favorable prior period development is net of $13 million of net earned premium adjustments on loss sensitive policies.	

Global Reinsurance	 	Page 8	

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

 	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	YTD
2012	 	 	YTD
2011	 	 	Full Year
2011	 	
Gross premiums written	  	$	513	  	 	$	512	  	 	$	520	  	 	$	509	  	 	$	513	  	 	$	1,025	  	 	$	961	  	 	$	1,990	  	
Net premiums written	  	 	486	  	 	 	488	  	 	 	496	  	 	 	488	  	 	 	493	  	 	 	974	  	 	 	929	  	 	 	1,913	  	
Net premiums earned	  	 	474	  	 	 	473	  	 	 	470	  	 	 	480	  	 	 	484	  	 	 	947	  	 	 	909	  	 	 	1,859	  	
Losses and loss expenses	  	 	151	  	 	 	148	  	 	 	154	  	 	 	142	  	 	 	159	  	 	 	299	  	 	 	297	  	 	 	593	  	
Policy benefits (1)	  	 	102	  	 	 	147	  	 	 	119	  	 	 	83	  	 	 	108	  	 	 	249	  	 	 	199	  	 	 	401	  	
(Gains) losses from fair value changes in separate account assets (1)	  	 	14	  	 	 	(18	) 	 	 	(3	) 	 	 	39	  	 	 	—  	  	 	 	(4	) 	 	 	—  	  	 	 	36	  	
Policy acquisition costs	  	 	88	  	 	 	76	  	 	 	86	  	 	 	92	  	 	 	85	  	 	 	164	  	 	 	161	  	 	 	339	  	
Administrative expenses	  	 	78	  	 	 	78	  	 	 	84	  	 	 	81	  	 	 	78	  	 	 	156	  	 	 	152	  	 	 	317	  	
Net investment income	  	 	62	  	 	 	61	  	 	 	60	  	 	 	60	  	 	 	60	  	 	 	123	  	 	 	106	  	 	 	226	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Life underwriting income (2)	  	 	103	  	 	 	103	  	 	 	90	  	 	 	103	  	 	 	114	  	 	 	206	  	 	 	206	  	 	 	399	  	
									
Net realized gains (losses):	  				 				 				 				 				 				 				 				
Mark-to-market on guaranteed living benefits derivative (net of related hedges)	  	 	(397	) 	 	 	197	  	 	 	(10	) 	 	 	(706	) 	 	 	(67	) 	 	 	(200	) 	 	 	(67	) 	 	 	(783	) 	
Foreign exchange gains (losses) and all other	  	 	(24	) 	 	 	34	  	 	 	17	  	 	 	(26	) 	 	 	(1	) 	 	 	10	  	 	 	(14	) 	 	 	(23	) 	
Interest expense	  	 	3	  	 	 	3	  	 	 	2	  	 	 	3	  	 	 	3	  	 	 	6	  	 	 	6	  	 	 	11	  	
Other income (expense) (1)	  	 	(5	) 	 	 	(9	) 	 	 	1	  	 	 	(10	) 	 	 	(11	) 	 	 	(14	) 	 	 	(17	) 	 	 	(26	) 	
Income tax expense	  	 	19	  	 	 	11	  	 	 	9	  	 	 	13	  	 	 	14	  	 	 	30	  	 	 	28	  	 	 	50	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	(345	) 	 	 	311	  	 	 	87	  	 	 	(655	) 	 	 	18	  	 	 	(34	) 	 	 	74	  	 	 	(494	) 	
									
Net realized gains (losses)	  	 	(421	) 	 	 	231	  	 	 	7	  	 	 	(732	) 	 	 	(68	) 	 	 	(190	) 	 	 	(81	) 	 	 	(806	) 	
Net realized gains (losses) in other income (expense)	  	 	2	  	 	 	(5	) 	 	 	1	  	 	 	(2	) 	 	 	(1	) 	 	 	(3	) 	 	 	—  	  	 	 	(1	) 	
Tax expense (benefit) on net realized gains (losses)	  	 	5	  	 	 	(1	) 	 	 	—  	  	 	 	1	  	 	 	1	  	 	 	4	  	 	 	1	  	 	 	2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)  (3)	  	$	79	  	 	$	84	  	 	$	79	  	 	$	80	  	 	$	88	  	 	$	163	  	 	$	156	  	 	$	315	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
% Change versus prior year period	  				 				 				 				 				 				 				 				
Net premiums written as reported	  	 	-1.2	% 	 	 	11.9	% 	 	 	14.5	% 	 	 	23.1	% 	 	 	19.7	% 	 	 	4.8	% 	 	 	13.8	% 	 	 	16.2	% 	
Net premiums earned as reported	  	 	-1.9	% 	 	 	11.3	% 	 	 	13.7	% 	 	 	17.5	% 	 	 	18.5	% 	 	 	4.2	% 	 	 	12.5	% 	 	 	14.1	% 	
									
Net premiums written constant $	  	 	0.5	% 	 				 				 				 				 	 	6.1	% 	 				 				
Net premiums earned constant $	  	 	-0.3	% 	 				 				 				 				 	 	5.4	% 	 				 				
 
(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.	

Life	 	Page 9	

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

 
																	
 	  	Unpaid Losses	 	 	Net Paid to	 	
 	  	Gross	 	 	Ceded	 	 	Net	 	 	Incurred Ratio	 	
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	  	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Add net recoverable on paid losses	  	 	—  	  	 	 	766	  	 	 	(766	) 	 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Balance including net recoverable on paid losses	  	$	36,850	  	 	$	11,752	  	 	$	25,098	  	 				

			
Loss Reserve Rollforward	 	Page 10	

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

 	  	June 30	 	 	March 31	 	 	December 31	 	
 	  	2012	 	 	2012	 	 	2011	 	
Reinsurance recoverable on paid losses and loss expenses	  				 				 				
Active operations	  	$	584	  	 	$	573	  	 	$	629	  	
Brandywine	  	 	248	  	 	 	234	  	 	 	232	  	
Other Run-off	  	 	38	  	 	 	42	  	 	 	41	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	870	  	 	$	849	  	 	$	902	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Reinsurance recoverable on unpaid losses and loss expenses	  				 				 				
Active operations	  	$	9,500	  	 	$	9,605	  	 	$	9,805	  	
Brandywine	  	 	1,510	  	 	 	1,721	  	 	 	1,775	  	
Other Run-off	  	 	343	  	 	 	362	  	 	 	386	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	11,353	  	 	$	11,688	  	 	$	11,966	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Gross reinsurance recoverable	  				 				 				
Active operations	  	$	10,084	  	 	$	10,178	  	 	$	10,434	  	
Brandywine	  	 	1,758	  	 	 	1,955	  	 	 	2,007	  	
Other Run-off	  	 	381	  	 	 	404	  	 	 	427	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	12,223	  	 	$	12,537	  	 	$	12,868	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Provision for uncollectible reinsurance (1) 	  				 				 				
Active operations	  	$	(294	) 	 	$	(300	) 	 	$	(299	) 	
Brandywine	  	 	(158	) 	 	 	(161	) 	 	 	(160	) 	
Other Run-off	  	 	(19	) 	 	 	(19	) 	 	 	(20	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	(471	) 	 	$	(480	) 	 	$	(479	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net reinsurance recoverable	  				 				 				
Active operations	  	$	9,790	  	 	$	9,878	  	 	$	10,135	  	
Brandywine	  	 	1,600	  	 	 	1,794	  	 	 	1,847	  	
Other Run-off	  	 	362	  	 	 	385	  	 	 	407	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	11,752	  	 	$	12,057	  	 	$	12,389	  	

(1)	The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance recoverables, net of approximately $2.8 billion of collateral.	

Reinsurance Recoverable	 	Page 11	

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

																									
 	  	June 30	 	 	March 31	 	 	December 31	 	
 	  	2012	 	 	2012	 	 	2011	 	
Market Value	  				 				 				 				 				 				
Fixed maturities available for sale	  	$	44,386	  	 				 	$	43,468	  	 				 	$	41,967	  	 				
Fixed maturities held to maturity	  	 	8,062	  	 				 	 	8,348	  	 				 	 	8,605	  	 				
Short-term investments	  	 	2,260	  	 				 	 	2,099	  	 				 	 	2,301	  	 				
	  	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Total	  	$	54,708	  	 				 	$	53,915	  	 				 	$	52,873	  	 				
	  	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Asset Allocation by Market Value	  				 				 				 				 				 				
Treasury	  	$	2,614	  	 	 	5	% 	 	$	2,451	  	 	 	5	% 	 	$	2,361	  	 	 	5	% 	
Agency	  	 	1,816	  	 	 	3	% 	 	 	1,811	  	 	 	3	% 	 	 	1,725	  	 	 	3	% 	
Corporate and asset-backed	  	 	17,581	  	 	 	32	% 	 	 	17,618	  	 	 	33	% 	 	 	17,030	  	 	 	32	% 	
Mortgage-backed	  	 	12,725	  	 	 	23	% 	 	 	12,800	  	 	 	24	% 	 	 	13,237	  	 	 	25	% 	
Municipal (1)	  	 	3,495	  	 	 	7	% 	 	 	3,295	  	 	 	6	% 	 	 	2,888	  	 	 	6	% 	
Non-U.S.	  	 	14,217	  	 	 	26	% 	 	 	13,841	  	 	 	26	% 	 	 	13,331	  	 	 	25	% 	
Short-term investments	  	 	2,260	  	 	 	4	% 	 	 	2,099	  	 	 	3	% 	 	 	2,301	  	 	 	4	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	54,708	  	 	 	100	% 	 	$	53,915	  	 	 	100	% 	 	$	52,873	  	 	 	100	% 	

Note: Insured municipal bonds represent $691 million, or 20% of our municipal bond holdings.

							
Credit Quality by Market Value	  				 				 				 				 				 				
AAA	  	$	9,132	  	 	 	17	% 	 	$	9,115	  	 	 	17	% 	 	$	9,284	  	 	 	18	% 	
AA	  	 	20,931	  	 	 	38	% 	 	 	20,665	  	 	 	38	% 	 	 	20,562	  	 	 	39	% 	
A	  	 	10,400	  	 	 	19	% 	 	 	10,523	  	 	 	20	% 	 	 	10,106	  	 	 	19	% 	
BBB	  	 	6,243	  	 	 	11	% 	 	 	6,244	  	 	 	12	% 	 	 	6,152	  	 	 	12	% 	
BB	  	 	4,298	  	 	 	8	% 	 	 	4,009	  	 	 	7	% 	 	 	3,755	  	 	 	7	% 	
B	  	 	3,217	  	 	 	6	% 	 	 	2,828	  	 	 	5	% 	 	 	2,428	  	 	 	4	% 	
Other	  	 	487	  	 	 	1	% 	 	 	531	  	 	 	1	% 	 	 	586	  	 	 	1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	54,708	  	 	 	100	% 	 	$	53,915	  	 	 	100	% 	 	$	52,873	  	 	 	100	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost/Amortized Cost	  				 				 				 				 				 				
Fixed maturities available for sale	  	$	42,316	  	 				 	$	41,661	  	 				 	$	40,450	  	 				
Fixed maturities held to maturity	  	 	7,782	  	 				 	 	8,117	  	 				 	 	8,447	  	 				
Short-term investments	  	 	2,260	  	 				 	 	2,099	  	 				 	 	2,301	  	 				
	  	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Subtotal	  	 	52,358	  	 				 	 	51,877	  	 				 	 	51,198	  	 				
Equity securities	  	 	724	  	 				 	 	662	  	 				 	 	671	  	 				
Other investments	  	 	2,297	  	 				 	 	2,221	  	 				 	 	2,112	  	 				
	  	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Total	  	$	55,379	  	 				 	$	54,760	  	 				 	$	53,981	  	 				
	  	 	 	 	 				 	 	 	 	 				 	 	 	 	 				
Avg. duration of fixed maturities	  	 	3.8 years	  	 				 	 	3.9 years	  	 				 	 	3.7 years	  	 				
Avg. market yield of fixed maturities (2)	  	 	2.8	% 	 				 	 	3.0	% 	 				 	 	3.1	% 	 				
Avg. credit quality (3)	  	 	A/Aa	  	 				 	 	A/Aa	  	 				 	 	A/Aa	  	 				
Avg. yield on invested assets (4)	  	 	3.9	% 	 				 	 	4.0	% 	 				 	 	4.2	% 	 				
 
(1)	The rating of the municipal portfolio is AA with 12% 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 divided by average cost of fixed maturities and other investments, and average market value of equity securities.	

Investments	 	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 June 30, 2012	  				  				  				  				  				  				
Agency residential mortgage-backed (RMBS)	  	$	—  	  	  	$	10,942	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	10,942	  	
Non-agency RMBS	  	 	145	  	  	 	6	  	  	 	24	  	  	 	10	  	  	 	399	  	  	 	584	  	
Commercial mortgage-backed	  	 	1,164	  	  	 	18	  	  	 	10	  	  	 	7	  	  	 	—  	  	  	 	1,199	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at market value	  	$	1,309	  	  	$	10,966	  	  	$	34	  	  	$	17	  	  	$	399	  	  	$	12,725	  	

																									
 	  	S&P Credit Rating	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	
Amortized Cost at June 30, 2012	  				  				  				  				  				  				
Agency RMBS	  	$	—  	  	  	$	10,480	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	10,480	  	
Non-agency RMBS	  	 	145	  	  	 	6	  	  	 	24	  	  	 	11	  	  	 	476	  	  	 	662	  	
Commercial mortgage-backed	  	 	1,090	  	  	 	16	  	  	 	9	  	  	 	6	  	  	 	—  	  	  	 	1,121	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total mortgage-backed securities at amortized cost	  	$	1,235	  	  	$	10,502	  	  	$	33	  	  	$	17	  	  	$	476	  	  	$	12,263	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mortgage-backed securities total $12.7 billion, are rated predominantly AA and comprise 23% 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 $10.9 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 47,000 loans. The portfolio’s original loan-to-value ratio is approximately 67% with an average FICO score of 730. With this conservative loan-to-value ratio and subordinated collateral of 5%, the cumulative 5-year foreclosure rate would have to rise to 15% before principal is significantly impaired. The foreclosure rate of ACE's non-agency RMBS portfolio at June 30, 2012 was 8%.
Commercial mortgage-backed securities of $1.2 billion are rated predominantly AAA, broadly diversified with over 13,000 loans and seasoned with 47% of the portfolio issued before 2006 and 38% 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 42% before principal is impaired. The foreclosure rate of ACE's commercial mortgage-backed securities portfolio at June 30, 2012 was about 2.3%.

Investments 2	 	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 June 30, 2012
																					
 	  	S&P Credit Rating	 	
 	  	Investment Grade	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	Total	 	
Asset-backed	  	$	231	  	  	$	86	  	  	$	1	  	  	$	—  	  	  	$	318	  	
Banks	  	 	—  	  	  	 	21	  	  	 	2,142	  	  	 	355	  	  	 	2,518	  	
Basic Materials	  	 	—  	  	  	 	—  	  	  	 	105	  	  	 	224	  	  	 	329	  	
Communications	  	 	—  	  	  	 	—  	  	  	 	600	  	  	 	740	  	  	 	1,340	  	
Consumer, Cyclical	  	 	—  	  	  	 	91	  	  	 	273	  	  	 	234	  	  	 	598	  	
Consumer, Non-Cyclical	  	 	59	  	  	 	495	  	  	 	798	  	  	 	540	  	  	 	1,892	  	
Diversified Financial Services	  	 	—  	  	  	 	68	  	  	 	229	  	  	 	118	  	  	 	415	  	
Energy	  	 	79	  	  	 	14	  	  	 	208	  	  	 	602	  	  	 	903	  	
Industrial	  	 	—  	  	  	 	400	  	  	 	323	  	  	 	138	  	  	 	861	  	
Utilities	  	 	—  	  	  	 	14	  	  	 	488	  	  	 	526	  	  	 	1,028	  	
All Others	  	 	47	  	  	 	195	  	  	 	365	  	  	 	483	  	  	 	1,090	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	416	  	  	$	1,384	  	  	$	5,532	  	  	$	3,960	  	  	$	11,292	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
U.S. Investment Grade Corporate Fixed Income Portfolio
The average credit quality of ACE's US 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 June 30, 2012

 	  	S&P Credit Rating	 	
 	  	Below Investment Grade	 	
 	  	BB	 	  	B	 	  	CCC	 	  	Total	 	
Asset-backed	  	$	4	  	  	$	5	  	  	$	4	  	  	$	13	  	
Banks	  	 	1	  	  	 	9	  	  	 	—  	  	  	 	10	  	
Basic Materials	  	 	213	  	  	 	126	  	  	 	4	  	  	 	343	  	
Communications	  	 	435	  	  	 	522	  	  	 	9	  	  	 	966	  	
Consumer, Cyclical	  	 	439	  	  	 	448	  	  	 	25	  	  	 	912	  	
Consumer, Non-Cyclical	  	 	729	  	  	 	617	  	  	 	7	  	  	 	1,353	  	
Diversified Financial Services	  	 	54	  	  	 	81	  	  	 	6	  	  	 	141	  	
Energy	  	 	738	  	  	 	326	  	  	 	15	  	  	 	1,079	  	
Industrial	  	 	378	  	  	 	316	  	  	 	8	  	  	 	702	  	
Utilities	  	 	272	  	  	 	51	  	  	 	10	  	  	 	333	  	
All Others	  	 	197	  	  	 	236	  	  	 	4	  	  	 	437	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	3,460	  	  	$	2,737	  	  	$	92	  	  	$	6,289	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
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 $95 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.

Investments 3	 	Page 14	

					
	  	ACE Limited
Investment Portfolio - 4
(in millions of U.S. dollars)
(Unaudited)	  		
 
Non-U.S. Fixed Income Portfolio
June 30, 2012

   	  	Market Value by S&P Credit Rating	 	  	Amortized
Cost	 	
 	  	AAA	 	  	AA	 	  	A	 	  	BBB	 	  	BB and below	 	  	Total	 	  			
United Kingdom	  	$	1,191	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	$	1,191	  	  	$	1,152	  	
Canada	  	 	939	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	939	  	  	 	906	  	
Republic of Korea	  	 	—  	  	  	 	—  	  	  	 	488	  	  	 	—  	  	  	 	—  	  	  	 	488	  	  	 	456	  	
Germany	  	 	409	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	409	  	  	 	401	  	
Japan	  	 	—  	  	  	 	378	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	378	  	  	 	376	  	
Province of Ontario	  	 	—  	  	  	 	230	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	230	  	  	 	219	  	
Federative Republic of Brazil	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	201	  	  	 	—  	  	  	 	201	  	  	 	196	  	
Kingdom of Thailand	  	 	—  	  	  	 	—  	  	  	 	140	  	  	 	20	  	  	 	—  	  	  	 	160	  	  	 	156	  	
Province of Quebec	  	 	—  	  	  	 	—  	  	  	 	157	  	  	 	—  	  	  	 	—  	  	  	 	157	  	  	 	146	  	
Commonwealth of Australia	  	 	149	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	150	  	  	 	134	  	
France	  	 	—  	  	  	 	134	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	134	  	  	 	130	  	
State of Queensland	  	 	75	  	  	 	57	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	132	  	  	 	123	  	
Swiss Confederation	  	 	128	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	128	  	  	 	121	  	
People’s Republic of China	  	 	70	  	  	 	50	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	120	  	  	 	117	  	
Federation of Malaysia	  	 	—  	  	  	 	—  	  	  	 	117	  	  	 	—  	  	  	 	—  	  	  	 	117	  	  	 	116	  	
United Mexican States	  	 	—  	  	  	 	—  	  	  	 	35	  	  	 	70	  	  	 	—  	  	  	 	105	  	  	 	98	  	
State of New South Wales	  	 	77	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	77	  	  	 	72	  	
Taiwan	  	 	—  	  	  	 	76	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	76	  	  	 	75	  	
State of Victoria	  	 	60	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	60	  	  	 	56	  	
Socialist Republic of Vietnam	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	54	  	  	 	54	  	  	 	50	  	
Republic of Indonesia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	50	  	  	 	50	  	  	 	49	  	
Russian Federation	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	47	  	  	 	—  	  	  	 	47	  	  	 	47	  	
Republic of Colombia	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	40	  	  	 	—  	  	  	 	40	  	  	 	39	  	
Republic of Austria	  	 	—  	  	  	 	40	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	40	  	  	 	39	  	
Dominion of New Zealand	  	 	—  	  	  	 	39	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	39	  	  	 	38	  	
Other Non-U.S. Government	  	 	241	  	  	 	211	  	  	 	96	  	  	 	60	  	  	 	126	  	  	 	734	  	  	 	707	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Non-U.S. Government Securities	  	$	3,339	  	  	$	1,216	  	  	$	1,033	  	  	$	438	  	  	$	230	  	  	$	6,256	  	  	$	6,019	  	
Eurozone Non-U.S. Corporate (1) 	  	 	640	  	  	 	334	  	  	 	507	  	  	 	477	  	  	 	411	  	  	 	2,369	  	  	 	2,304	  	
Other Non-U.S. Corporate	  	 	767	  	  	 	591	  	  	 	2,339	  	  	 	1,284	  	  	 	611	  	  	 	5,592	  	  	 	5,344	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	4,746	  	  	$	2,141	  	  	$	3,879	  	  	$	2,199	  	  	$	1,252	  	  	$	14,217	  	  	$	13,667	  	

(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.
78% 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 very 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.

Investments 4	 	Page 15	

					
	  	ACE Limited
Investment Portfolio - 5
(in millions of U.S. dollars)
(Unaudited)	  		
 
Eurozone Non-U.S. Fixed Income Portfolio (Excluding United Kingdom)
June 30, 2012

   	  	Market Value by Industry	 	  	Amortized
Cost	 	
 	  	Bank	 	  	Financial	 	  	Industrial	 	  	Utility	 	  	Total	 	  			
Netherlands	  	$	225	  	  	$	133	  	  	$	320	  	  	$	124	  	  	$	802	  	  	$	770	  	
France	  	 	98	  	  	 	37	  	  	 	115	  	  	 	146	  	  	 	396	  	  	 	392	  	
Germany	  	 	284	  	  	 	2	  	  	 	76	  	  	 	7	  	  	 	369	  	  	 	356	  	
Luxembourg	  	 	11	  	  	 	2	  	  	 	243	  	  	 	95	  	  	 	351	  	  	 	347	  	
Euro Supranational	  	 	197	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	197	  	  	 	189	  	
Ireland	  	 	12	  	  	 	1	  	  	 	87	  	  	 	17	  	  	 	117	  	  	 	110	  	
Spain	  	 	10	  	  	 	4	  	  	 	18	  	  	 	5	  	  	 	37	  	  	 	42	  	
Italy	  	 	25	  	  	 	—  	  	  	 	6	  	  	 	3	  	  	 	34	  	  	 	32	  	
Austria	  	 	20	  	  	 	—  	  	  	 	7	  	  	 	1	  	  	 	28	  	  	 	27	  	
Finland	  	 	13	  	  	 	1	  	  	 	8	  	  	 	2	  	  	 	24	  	  	 	26	  	
Belgium	  	 	—  	  	  	 	—  	  	  	 	12	  	  	 	1	  	  	 	13	  	  	 	12	  	
Portugal	  	 	—  	  	  	 	—  	  	  	 	1	  	  	 	—  	  	  	 	1	  	  	 	1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Eurozone Non-U.S. Corporate Securities	  	$	895	  	  	$	180	  	  	$	893	  	  	$	401	  	  	$	2,369	  	  	$	2,304	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Note: ACE has no investments in Greece
Top 10 Exposures - Eurozone Banks (Excluding United Kingdom)

June 30, 2012	  	Market Value	 	  	Amortized Cost	 	  	Rating	
European Investment Bank	  	$	166	  	  	$	160	  	  	AAA	
KFW	  	 	156	  	  	 	150	  	  	AAA	
Rabobank Nederland NV	  	 	109	  	  	 	104	  	  	AA	
Deutsche Bank AG	  	 	46	  	  	 	45	  	  	A+	
Bank Nederlandse Gemeenten	  	 	41	  	  	 	40	  	  	AAA	
ABN AMRO Group NV	  	 	32	  	  	 	30	  	  	A+	
Nederlandse Waterschapsbank NV	  	 	28	  	  	 	27	  	  	AAA	
Credit Agricole Groupe	  	 	27	  	  	 	27	  	  	A	
BNP Paribas SA	  	 	25	  	  	 	24	  	  	AA-	
Erste Abwicklungsanstalt	  	 	23	  	  	 	23	  	  	AA-	
Top 10 Exposures - Eurozone Corporate (Excluding United Kingdom)

June 30, 2012	  	Market
Value	 	  	Amortized
Cost	 	  	Rating	
EDF SA	  	$	79	  	  	$	79	  	  	A+	
ING Groep NV	  	 	77	  	  	 	78	  	  	A	
Intelsat SA	  	 	73	  	  	 	71	  	  	B	
Deutsche Telekom AG	  	 	69	  	  	 	63	  	  	BBB+	
Royal Dutch Shell PLC	  	 	64	  	  	 	59	  	  	AA	
LyondellBasell Industries NV	  	 	55	  	  	 	51	  	  	BB+	
France Telecom SA	  	 	41	  	  	 	39	  	  	A-	
Gazprom OAO	  	 	40	  	  	 	38	  	  	BBB	
General Electric Co	  	 	38	  	  	 	35	  	  	AA+	
Liberty Global Inc	  	 	38	  	  	 	35	  	  	B+	

Investments 5	 	Page 16	

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

June 30, 2012	  	Market Value	 	  	Rating	
  1  General Electric Co	  	$	430	  	  	AA+	
  2  JP Morgan Chase & Co	  	 	426	  	  	A	
  3  Citigroup Inc	  	 	350	  	  	A-	
  4  Bank of America Corp	  	 	314	  	  	A-	
  5  The Goldman Sachs Group Inc	  	 	307	  	  	A-	
  6  Verizon Communications Inc	  	 	278	  	  	A-	
  7  Morgan Stanley	  	 	267	  	  	A-	
  8  AT&T INC	  	 	223	  	  	A-	
  9  Wells Fargo & Co	  	 	203	  	  	A+	
10  HSBC Holdings Plc	  	 	197	  	  	A+	
11  Comcast Corp	  	 	164	  	  	BBB+	
12  Kraft Foods Inc	  	 	164	  	  	BBB	
13  Lloyds Banking Group Plc	  	 	162	  	  	A-	
14  Royal Bank of Scotland Group Plc	  	 	156	  	  	A-	
15  Time Warner Cable Inc	  	 	138	  	  	BBB	
16  Barclays Plc	  	 	136	  	  	A	
17  ConocoPhillips	  	 	127	  	  	A	
18  BP Plc	  	 	123	  	  	A	
19  Pfizer Inc	  	 	121	  	  	AA	
20  UBS AG	  	 	121	  	  	A	
21  American Express Co	  	 	120	  	  	BBB+	
22  Credit Suisse Group	  	 	116	  	  	A	
23  Anheuser-Busch InBev NV	  	 	111	  	  	A	
24  Rabobank Nederland NV	  	 	109	  	  	AA	
25  Enterprise Products Partners LP	  	 	105	  	  	BBB	

Investments 6	 	Page 17	

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

																									
 	  	Three months ended June 30, 2012	 	 	Six months ended June 30, 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	  	$	68	  	 	$	251	  	 	$	319	  	 	$	102	  	 	$	494	  	  	$	596	  	
Fixed income derivatives	  	 	(49	) 	 	 	—  	  	 	 	(49	) 	 	 	(7	) 	 	 	—  	  	  	 	(7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total fixed maturities	  	 	19	  	 	 	251	  	 	 	270	  	 	 	95	  	 	 	494	  	  	 	589	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Public equity	  	 	(5	) 	 	 	(9	) 	 	 	(14	) 	 	 	(4	) 	 	 	29	  	  	 	25	  	
Private equity	  	 	(6	) 	 	 	16	  	 	 	10	  	 	 	17	  	 	 	23	  	  	 	40	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total equity	  	 	(11	) 	 	 	7	  	 	 	(4	) 	 	 	13	  	 	 	52	  	  	 	65	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Mark-to-market gains (losses) from derivative transactions (2)	  	 	(396	) 	 	 	—  	  	 	 	(396	) 	 	 	(204	) 	 	 	—  	  	  	 	(204	) 	
Foreign exchange gains (losses) (2)	  	 	(9	) 	 	 	—  	  	 	 	(9	) 	 	 	(14	) 	 	 	—  	  	  	 	(14	) 	
Other	  	 	3	  	 	 	(3	) 	 	 	—  	  	 	 	1	  	 	 	1	  	  	 	2	  	
Partially-owned entities (3)	  	 	1	  	 	 	—  	  	 	 	1	  	 	 	(6	) 	 	 	—  	  	  	 	(6	) 	
Income tax expense	  	 	22	  	 	 	47	  	 	 	69	  	 	 	28	  	 	 	96	  	  	 	124	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net gains	  	$	(415	) 	 	$	208	  	 	$	(207	) 	 	$	(143	) 	 	$	451	  	  	$	308	  	

(1)	Other-than-temporary impairments for the quarter includes $1 million for fixed maturities, $5 million for private equity, and $4 million for public equity. Year to date other-than-temporary impairments includes $8 million for fixed maturities, $7 million for private equity, and $5 million for public equity.	
(2)	Includes $397 million of realized losses from variable annuity reinsurance for the quarter which includes $467 million in mark-to-market losses from derivative transactions, net of $70 million of gains on applicable hedges. The variable annuity reinsurance foreign exchange losses for the quarter were $29 million. For the year, the $200 million of realized losses from variable annuity reinsurance includes $39 million in mark-to-market losses from derivative transactions and $161 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange gains for the year were $6 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 June 30, 2011	 	 	Six months ended June 30, 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	  	$	74	  	 	$	202	  	  	$	276	  	 	$	123	  	 	$	163	  	  	$	286	  	
Fixed income derivatives	  	 	(48	) 	 	 	—  	  	  	 	(48	) 	 	 	(68	) 	 	 	—  	  	  	 	(68	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total fixed maturities	  	 	26	  	 	 	202	  	  	 	228	  	 	 	55	  	 	 	163	  	  	 	218	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Public Equity	  	 	4	  	 	 	6	  	  	 	10	  	 	 	11	  	 	 	8	  	  	 	19	  	
Private equity	  	 	(3	) 	 	 	12	  	  	 	9	  	 	 	30	  	 	 	56	  	  	 	86	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total equity	  	 	1	  	 	 	18	  	  	 	19	  	 	 	41	  	 	 	64	  	  	 	105	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Mark-to-market gains (losses) from derivative transactions (5)	  	 	(69	) 	 	 	—  	  	  	 	(69	) 	 	 	(70	) 	 	 	—  	  	  	 	(70	) 	
Foreign exchange gains (losses) (5)	  	 	(30	) 	 	 	—  	  	  	 	(30	) 	 	 	(109	) 	 	 	—  	  	  	 	(109	) 	
Other	  	 	(1	) 	 	 	3	  	  	 	2	  	 	 	(2	) 	 	 	6	  	  	 	4	  	
Partially-owned entities (6)	  	 	2	  	 	 	2	  	  	 	4	  	 	 	3	  	 	 	2	  	  	 	5	  	
Income tax expense	  	 	8	  	 	 	74	  	  	 	82	  	 	 	6	  	 	 	60	  	  	 	66	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net gains (losses)	  	$	(79	) 	 	$	151	  	  	$	72	  	 	$	(88	) 	 	$	175	  	  	$	87	  	

(4)	Other-than-temporary impairments for the quarter of $8 million include $5 million for fixed maturities and $3 million for other investments. Year to date other-than-temporary impairments of $12 million include $9 million for fixed maturities, and $3 million for private equity.	
(5)	Includes $67 million of realized losses from variable annuity reinsurance for the quarter which includes $70 million in mark-to-market losses from derivative transactions, net of $3 million of gains on applicable hedges. The variable annuity reinsurance foreign exchange losses for the quarter were $5 million. For the year, the $67 million of realized losses from variable annuity reinsurance includes $1 million in mark-to-market gains from derivative transactions and $68 million of losses on applicable hedges. The variable annuity reinsurance foreign exchange losses for the year were $18 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).	

Investment Gains (Losses)	 	Page 18	

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

																	
 	  	June 30	 	 	March 31	 	 	December 31	 	 	December 31	 	
 	  	2012	 	 	2012	 	 	2011	 	 	2010	 	
Total short-term debt (1)	  	$	1,401	  	 	$	1,531	  	 	$	1,251	  	 	$	1,300	  	
Total long-term debt	  	 	3,360	  	 	 	3,360	  	 	 	3,360	  	 	 	3,358	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total debt	  	$	4,761	  	 	$	4,891	  	 	$	4,611	  	 	$	4,658	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total trust preferred securities	  	$	309	  	 	$	309	  	 	$	309	  	 	$	309	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders' equity	  	$	25,762	  	 	$	25,431	  	 	$	24,332	  	 	$	22,835	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total capitalization	  	$	30,832	  	 	$	30,631	  	 	$	29,252	  	 	$	27,802	  	
Tangible capital (2)	  	$	26,006	  	 	$	25,771	  	 	$	24,453	  	 	$	23,138	  	
					
Leverage ratios	  				 				 				 				
Debt/ total capitalization	  	 	15.4	% 	 	 	16.0	% 	 	 	15.8	% 	 	 	16.8	% 	
Debt plus trust preferred securities/ total capitalization	  	 	16.4	% 	 	 	17.0	% 	 	 	16.8	% 	 	 	17.9	% 	
Debt/ tangible capital	  	 	18.3	% 	 	 	19.0	% 	 	 	18.9	% 	 	 	20.1	% 	
Debt plus trust preferred securities/ tangible capital	  	 	19.5	% 	 	 	20.2	% 	 	 	20.1	% 	 	 	21.5	% 	
Note: As of June 30, 2012, there was $1.5 billion usage of credit facilities on a total commitment of $2.4 billion.
 
(1)	Repurchase agreements in the amount of $850 million matured during the quarter, and there were new repurchase agreements in the amount of $850 million.	
(2)	Tangible capital is equal to total capitalization less goodwill and other intangible assets.	

Capital Structure	 	Page 19	

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

																	
 	  	Three months ended June 30	 	 	Six months ended June 30	 	
 	  	2012	 	 	2011	 	 	2012	 	 	2011	 	
Numerator	  				 				 				 				
Income to common shares, excl. net realized gains (losses) (1)	  	$	743	  	 	$	673	  	 	$	1,444	  	 	$	932	  	
Net realized gains (losses), net of income tax	  	 	(415	) 	 	 	(79	) 	 	 	(143	) 	 	 	(88	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	328	  	 	$	594	  	 	$	1,301	  	 	$	844	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rollforward of Common Shares Outstanding	  				 				 				 				
Shares - beginning of period	  	 	338,653,382	  	 	 	337,173,864	  	 	 	336,927,276	  	 	 	334,942,852	  	
Repurchase of shares	  	 	—  	  	 	 	—  	  	 	 	(100,000	) 	 	 	—  	  	
Shares issued, excluding option exercises	  	 	87,454	  	 	 	39,662	  	 	 	1,124,163	  	 	 	1,396,408	  	
Issued for option exercises	  	 	320,049	  	 	 	698,798	  	 	 	1,109,446	  	 	 	1,573,064	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shares - end of period	  	 	339,060,885	  	 	 	337,912,324	  	 	 	339,060,885	  	 	 	337,912,324	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Denominator	  				 				 				 				
Weighted average shares outstanding	  	 	339,766,067	  	 	 	338,920,580	  	 	 	339,164,449	  	 	 	338,021,487	  	
Effect of other dilutive securities	  	 	2,907,971	  	 	 	2,768,388	  	 	 	3,006,950	  	 	 	2,596,909	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adj. wtd. avg. shares outstanding and assumed conversions	  	 	342,674,038	  	 	 	341,688,968	  	 	 	342,171,399	  	 	 	340,618,396	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per share	  				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	2.18	  	 	$	1.98	  	 	$	4.25	  	 	$	2.76	  	
Net realized gains (losses), net of income tax	  	 	(1.22	) 	 	 	(0.23	) 	 	 	(0.42	) 	 	 	(0.26	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	0.96	  	 	$	1.75	  	 	$	3.83	  	 	$	2.50	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	  				 				 				 				
Income excluding net realized gains (losses) (1)	  	$	2.17	  	 	$	1.97	  	 	$	4.22	  	 	$	2.74	  	
Net realized gains (losses), net of income tax	  	 	(1.21	) 	 	 	(0.23	) 	 	 	(0.42	) 	 	 	(0.26	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	0.96	  	 	$	1.74	  	 	$	3.80	  	 	$	2.48	  	

(1)	See Non-GAAP Financial Measures.	

Earnings per share	 	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.
Annualized ROE calculated using income excluding net realized gains (losses) is a 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), net of tax, 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 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.
The following table presents the reconciliation of Net income to Income excluding net realized gains (losses):

 	  	 	 	 	 	 	  	 	 	  	 	 	 	 	 	 	YTD	 	 	YTD	 	 	Full Year	 	
 	  	2Q-12	 	 	1Q-12	 	  	4Q-11	 	  	3Q-11	 	 	2Q-11	 	 	2012	 	 	2011	 	 	2011	 	
Net income (loss), as reported	  	$	328	  	 	$	973	  	  	$	735	  	  	$	(39	) 	 	$	594	  	 	$	1,301	  	 	$	844	  	 	$	1,540	  	
Net realized gains (losses)	  	 	(394	) 	 	 	260	  	  	 	83	  	  	 	(760	) 	 	 	(73	) 	 	 	(134	) 	 	 	(118	) 	 	 	(795	) 	
Net realized gains (losses) in other income (expense) (1)	  	 	1	  	 	 	18	  	  	 	16	  	  	 	(28	) 	 	 	2	  	 	 	19	  	 	 	36	  	 	 	24	  	
Income tax expense on net realized gains (losses)	  	 	22	  	 	 	6	  	  	 	12	  	  	 	2	  	 	 	8	  	 	 	28	  	 	 	6	  	 	 	20	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses)	  	$	743	  	 	$	701	  	  	$	648	  	  	$	751	  	 	$	673	  	 	$	1,444	  	 	$	932	  	 	$	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).	

Reconciliation Non-GAAP	 	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 effective tax rate on income excluding net realized gains (losses):

 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	YTD	 	 	YTD	 	 	Full Year	 	
 	  	2Q-12	 	 	1Q-12	 	 	4Q-11	 	 	3Q-11	 	 	2Q-11	 	 	2012	 	 	2011	 	 	2011	 	
Tax expense, as reported	  	$	148	  	 	$	110	  	 	$	120	  	 	$	165	  	 	$	121	  	 	$	258	  	 	$	217	  	 	$	502	  	
Tax expense on net realized gains (losses)	  	 	22	  	 	 	6	  	 	 	12	  	 	 	2	  	 	 	8	  	 	 	28	  	 	 	6	  	 	 	20	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax expense, adjusted	  	$	126	  	 	$	104	  	 	$	108	  	 	$	163	  	 	$	113	  	 	$	230	  	 	$	211	  	 	$	482	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before tax, as reported	  	$	476	  	 	$	1,083	  	 	$	855	  	 	$	126	  	 	$	715	  	 	$	1,559	  	 	$	1,061	  	 	$	2,042	  	
Less: realized gains (losses)	  	 	(394	) 	 	 	260	  	 	 	83	  	 	 	(760	) 	 	 	(73	) 	 	 	(134	) 	 	 	(118	) 	 	 	(795	) 	
Less: realized gains (losses) in other income (expense)	  	 	1	  	 	 	18	  	 	 	16	  	 	 	(28	) 	 	 	2	  	 	 	19	  	 	 	36	  	 	 	24	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income excluding net realized gains (losses) before tax	  	$	869	  	 	$	805	  	 	$	756	  	 	$	914	  	 	$	786	  	 	$	1,674	  	 	$	1,143	  	 	$	2,813	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	31.0	% 	 	 	10.2	% 	 	 	14.1	% 	 	 	131.9	% 	 	 	16.9	% 	 	 	16.6	% 	 	 	20.4	% 	 	 	24.6	% 	
Adjustment for tax impact of net realized gains (losses)	  	 	-16.4	% 	 	 	2.8	% 	 	 	0.3	% 	 	 	-114.2	% 	 	 	-2.5	% 	 	 	-2.8	% 	 	 	-2.0	% 	 	 	-7.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate on income excluding net realized gains (losses)	  	 	14.6	% 	 	 	13.0	% 	 	 	14.4	% 	 	 	17.7	% 	 	 	14.4	% 	 	 	13.8	% 	 	 	18.4	% 	 	 	17.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The following table presents the reconciliation of annualized ROE calculated using net income to annualized ROE calculated using income excluding net realized gains (losses):

 	  	 	 	 	 	 	 	YTD	 	 	YTD	 	 	Full Year	 	
 	  	2Q-12	 	 	2Q-11	 	 	2012	 	 	2011	 	 	2011	 	
Net income	  	$	328	  	 	$	594	  	 	$	1,301	  	 	$	844	  	 	$	1,540	  	
Income excluding net realized gains (losses)	  	$	743	  	 	$	673	  	 	$	1,444	  	 	$	932	  	 	$	2,331	  	
Equity - beginning of period, as reported	  	$	25,431	  	 	$	23,228	  	 	$	24,332	  	 	$	22,835	  	 	$	22,835	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	1,958	  	 	 	1,423	  	 	 	1,715	  	 	 	1,399	  	 	 	1,399	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity - beginning of period, as adjusted	  	$	23,473	  	 	$	21,805	  	 	$	22,617	  	 	$	21,436	  	 	$	21,436	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity - end of period, as reported	  	$	25,762	  	 	$	23,952	  	 	$	25,762	  	 	$	23,952	  	 	$	24,332	  	
Less: unrealized gains (losses) on investments, net of deferred tax	  	 	2,166	  	 	 	1,574	  	 	 	2,166	  	 	$	1,574	  	 	 	1,715	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity - end of period, as adjusted	  	$	23,596	  	 	$	22,378	  	 	$	23,596	  	 	$	22,378	  	 	$	22,617	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average equity, as reported	  	$	25,597	  	 	$	23,590	  	 	$	25,047	  	 	$	23,394	  	 	$	23,584	  	
Average equity, as adjusted	  	$	23,535	  	 	$	22,092	  	 	$	23,107	  	 	$	21,907	  	 	$	22,027	  	
Annualized ROE calculated using income excluding net realized gains (losses)	  	 	12.6	% 	 	 	12.2	% 	 	 	12.5	% 	 	 	8.5	% 	 	 	10.6	% 	
Annualized ROE calculated using net income	  	 	5.1	% 	 	 	10.1	% 	 	 	10.4	% 	 	 	7.2	% 	 	 	6.5	% 	

Reconciliation Non-GAAP 2	 	Page 22	

					
	  	ACE Limited
Book Value and Book Value per Common Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)	  		
 
Reconciliation of Book Value per Common Share

 	  	June 30	 	 	March 31	 	 	December 31	 	 	June 30	 	
 	  	2012	 	 	2012	 	 	2011	 	 	2011	 	
Shareholders’ equity	  	$	25,762	  	 	$	25,431	  	 	$	24,332	  	 	$	23,952	  	
Less: goodwill and other intangible assets	  	 	4,826	  	 	 	4,860	  	 	 	4,799	  	 	 	4,826	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Numerator for tangible book value per share	  	$	20,936	  	 	$	20,571	  	 	$	19,533	  	 	$	19,126	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Book value - % change over prior quarter (1)	  	 	1.3	% 	 	 	4.5	% 	 	 	3.2	% 	 	 	3.1	% 	
Tangible book value - % change over prior quarter  (1)	  	 	1.8	% 	 	 	5.3	% 	 	 	3.9	% 	 	 	3.2	% 	
Denominator	  	 	339,060,885	  	 	 	338,653,382	  	 	 	336,927,276	  	 	 	337,912,324	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Book value per common share	  	$	75.98	  	 	$	75.09	  	 	$	72.22	  	 	$	70.88	  	
Tangible book value per common share	  	$	61.75	  	 	$	60.74	  	 	$	57.97	  	 	$	56.60	  	
					
Reconciliation of Book Value	  				 				 				 				
Shareholders’ equity, beginning of quarter	  	$	25,431	  	 	$	24,332	  	 	$	23,581	  	 	$	23,228	  	
Income excluding net realized gains (losses)	  	 	743	  	 	 	701	  	 	 	648	  	 	 	673	  	
Net realized gains (losses), net of tax	  	 	(415	) 	 	 	272	  	 	 	87	  	 	 	(79	) 	
Net unrealized gains (losses), net of tax	  	 	208	  	 	 	243	  	 	 	189	  	 	 	151	  	
Repurchase of shares	  	 	—  	  	 	 	(7	) 	 	 	(32	) 	 	 	—  	  	
Dividend declared on common shares	  	 	(168	) 	 	 	(200	) 	 	 	(118	) 	 	 	(119	) 	
Cumulative translation, net of tax	  	 	(79	) 	 	 	56	  	 	 	(123	) 	 	 	56	  	
Pension liability	  	 	—  	  	 	 	(1	) 	 	 	6	  	 	 	—  	  	
Other (2)	  	 	42	  	 	 	35	  	 	 	94	  	 	 	42	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	25,762	  	 	$	25,431	  	 	$	24,332	  	 	$	23,952	  	

(1)	At June 30, 2012, book value increased 5.9% and tangible book value increased 7.2% from December 31, 2011.	
(2)	Other primarily includes proceeds from exercise of stock options and stock compensation.	

Reconciliation Book Value	 	Page 23	

					
	  	ACE Limited
Glossary	  		
 
ACE Limited Consolidated comprises all segments including Corporate and Other.
Annualized return on equity 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.
Effective tax rate on income excluding net realized gains (losses): 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.

Glossary	 	Page 24