ACE LTD, 10-Q filed on 7/30/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Jul. 16, 2014
Entity Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Trading Symbol
ACE 
 
Entity Registrant Name
ACE Ltd 
 
Entity Central Index Key
0000896159 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
335,698,995 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Investments [Abstract]
 
 
Fixed maturities available for sale, at fair value (amortized cost - $49,719 and $48,406) (includes hybrid financial instruments of $305 and $302)
$ 51,601 
$ 49,254 
Fixed maturities held to maturity, at amortized cost (fair value – $6,015 and $6,263)
5,774 
6,098 
Equity securities, at fair value (cost – $874 and $841)
907 
837 
Short-term investments, at fair value and amortized cost
2,108 
1,763 
Other investments (cost – $2,876 and $2,671)
3,230 
2,976 
Total investments
63,620 
60,928 
Cash
594 1 2
579 1 3
Securities lending collateral
1,440 
1,632 
Accrued investment income
556 
556 
Insurance and reinsurance balances receivable
5,316 
5,026 
Reinsurance recoverable on losses and loss expenses
10,768 
11,227 
Reinsurance recoverable on policy benefits
234 
218 
Deferred policy acquisition costs
2,562 
2,313 
Value of business acquired
514 
536 
Goodwill and other intangible assets
5,522 
5,404 
Prepaid reinsurance premiums
1,867 
1,675 
Deferred tax assets
234 
616 
Investments in partially-owned insurance companies
470 
470 
Other assets
3,750 
3,330 
Total assets
97,447 
94,510 
Liabilities
 
 
Unpaid losses and loss expenses
37,177 
37,443 
Unearned premiums
8,296 
7,539 
Future policy benefits
4,778 
4,615 
Insurance and reinsurance balances payable
3,794 
3,628 
Securities lending payable
1,441 
1,633 
Accounts payable, accrued expenses, and other liabilities
5,419 
4,810 
Short-term debt
1,851 
1,901 
Long-term debt
4,057 
3,807 
Trust preferred securities
309 
309 
Total liabilities
67,122 
65,685 
Commitments and contingencies
   
   
Shareholders’ equity
 
 
Common Shares (CHF 26.01 and CHF 27.04 par value; 342,832,412 shares issued; 336,225,589 and 339,793,935 shares outstanding)
8,501 
8,899 
Common Shares in treasury (6,606,823 and 3,038,477 shares)
(630)
(255)
Additional paid-in capital
5,055 
5,238 
Retained earnings
15,304 
13,791 
Accumulated other comprehensive income (AOCI)
2,095 
1,152 
Total shareholders’ equity
30,325 
28,825 
Total liabilities and shareholders’ equity
$ 97,447 
$ 94,510 
Consolidated Balance Sheets (Parenthetical)
In Millions, except Share data, unless otherwise specified
Jun. 30, 2014
USD ($)
Jun. 30, 2014
CHF
Dec. 31, 2013
USD ($)
Dec. 31, 2013
CHF
Statement of Financial Position [Abstract]
 
 
 
 
Fixed maturities available for sale, at amortized cost
$ 49,719 
 
$ 48,406 
 
Fixed maturities available for sale, hybrid financial instruments
305 
 
302 
 
Fixed maturities held to maturity, at amortized cost
6,015 
 
6,263 
 
Equity securities, at cost
874 
 
841 
 
Other investments, cost
$ 2,876 
 
$ 2,671 
 
Common Shares, par value
 
 26.01 
 
 27.04 
Common Shares, shares issued
342,832,412 
342,832,412 
342,832,412 
342,832,412 
Common Shares, shares outstanding
336,225,589 
336,225,589 
339,793,935 
339,793,935 
Common Shares in treasury, shares
6,606,823 
6,606,823 
3,038,477 
3,038,477 
Consolidated Statements Of Operations and Comprehensive Income (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Revenues
 
 
 
 
Net premiums written
$ 4,559 
$ 4,391 
$ 8,744 
$ 8,189 
Increase in unearned premiums
(227)
(324)
(442)
(549)
Net premiums earned
4,332 
4,067 
8,302 
7,640 
Net investment income
556 
534 
1,109 
1,065 
Net realized gains (losses):
 
 
 
 
Other-than-temporary impairment (OTTI) losses gross
(13)
(7)
(25)
(10)
Portion of OTTI losses recognized in other comprehensive income (OCI)
1 
0 
2 
0 
Net OTTI losses recognized in income
(12)
(7)
(23)
(10)
Net realized gains (losses) excluding OTTI losses
(61)
111 
(154)
320 
Total net realized gains (losses)
(73)
104 
(177)
310 
Total revenues
4,815 
4,705 
9,234 
9,015 
Expenses
 
 
 
 
Losses and loss expenses
2,388 
2,250 
4,549 
4,176 
Policy benefits
144 
110 
258 
241 
Policy acquisition costs
758 
665 
1,486 
1,279 
Administrative expenses
566 
564 
1,101 
1,078 
Interest expense
72 
73 
143 
133 
Other (income) expense
(25)
37 
(42)
27 
Total expenses
3,903 
3,699 
7,495 
6,934 
Income before income tax
912 
1,006 
1,739 
2,081 
Income tax expense (includes $5, $7, $2, and $12 of reclassified unrealized gains)
133 
115 
226 
237 
Net income
779 
891 
1,513 
1,844 
Other comprehensive income (loss)
 
 
 
 
Unrealized appreciation (depreciation)
589 
(1,470)
1,108 
(1,586)
Reclassification adjustment for net realized gains included in net income
(21)
(38)
(27)
(73)
Unrealized appreciation (Depreciation) after reclassification adjustment
568 
(1,508)
1,081 
(1,659)
Change in:
 
 
 
 
Cumulative translation adjustment
153 
(175)
120 
(386)
Pension liability
(5)
(3)
(13)
19 
Other comprehensive income (loss), before income tax
716 
(1,686)
1,188 
(2,026)
Income tax (expense) benefit related to OCI items
(147)
296 
(245)
399 
Other comprehensive income (loss)
569 
(1,390)
943 
(1,627)
Comprehensive income (loss)
1,348 
(499)
2,456 
217 
Earnings per share
 
 
 
 
Basic earnings per share
$ 2.30 
$ 2.61 
$ 4.47 
$ 5.41 
Diluted earnings per share
$ 2.28 
$ 2.59 
$ 4.43 
$ 5.36 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
 
 
Net realized gains (losses):
 
 
 
 
Total net realized gains (losses)
21 
38 
27 
73 
Expenses
 
 
 
 
Income tax expense (includes $5, $7, $2, and $12 of reclassified unrealized gains)
$ 5 
$ 7 
$ 2 
$ 12 
Consolidated Statements Of Operations and Comprehensive Income Consolidated Statements of Operations and Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Net realized gains (losses)
$ (73)
$ 104 
$ (177)
$ 310 
Income tax expense (benefit)
133 
115 
226 
237 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
 
 
Net realized gains (losses)
21 
38 
27 
73 
Income tax expense (benefit)
$ 5 
$ 7 
$ 2 
$ 12 
Consolidated Statements Of Shareholders' Equity (USD $)
In Millions
Total
Common Stock [Member]
Treasury Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Translation Adjustment [Member]
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance - beginning of period at Dec. 31, 2012
 
$ 9,591 
$ (159)
$ 5,179 
$ 10,033 
$ 2,633 
$ 339 
$ (85)
 
Dividends declared on Common Shares – par value reduction
 
(342)
 
 
 
 
 
 
 
Common Shares repurchased
 
 
(212)
 
 
 
 
 
 
Net shares redeemed under employee share-based compensation plans
 
 
152 
(128)
 
 
 
 
 
Exercise of stock options
 
 
 
(28)
 
 
 
 
 
Share-based compensation expense and other
 
 
 
105 
 
 
 
 
 
Funding of dividends declared to Retained earnings
 
 
 
0 
 
 
 
 
 
Net income
1,844 
 
 
 
1,844 
 
 
 
 
Funding of dividends declared from Additional paid-in capital
 
 
 
 
0 
 
 
 
 
Dividends declared on Common Shares
 
 
 
 
0 
 
 
 
 
Change in period, before reclassification from AOCI, net of income tax (expense) benefit of $(210) and $332
 
 
 
 
 
(1,254)
 
 
 
Amounts reclassified from AOCI, net of income tax benefit of $2 and $12
 
 
 
 
 
(61)
 
 
 
Change in period, net of income tax (expense) benefit of $(208) and $344
 
 
 
 
 
(1,315)
 
 
 
Change in period, net of income tax (expense) benefit of $(42) and $62
 
 
 
 
 
 
(324)
 
 
Change in period, net of income tax (expense) benefit of $5 and $(7)
 
 
 
 
 
 
 
12 
 
Balance - end of period at Jun. 30, 2013
27,295 
9,249 
(219)
5,128 
11,877 
1,318 
15 
(73)
1,260 
Balance - beginning of period at Dec. 31, 2013
28,825 
8,899 
(255)
5,238 
13,791 
1,174 
63 
(85)
 
Dividends declared on Common Shares – par value reduction
 
(398)
 
 
 
 
 
 
 
Common Shares repurchased
 
 
(569)
 
 
 
 
 
 
Net shares redeemed under employee share-based compensation plans
 
 
194 
(169)
 
 
 
 
 
Exercise of stock options
 
 
 
(33)
 
 
 
 
 
Share-based compensation expense and other
 
 
 
100 
 
 
 
 
 
Funding of dividends declared to Retained earnings
 
 
 
(81)
 
 
 
 
 
Net income
1,513 
 
 
 
1,513 
 
 
 
 
Funding of dividends declared from Additional paid-in capital
 
 
 
 
81 
 
 
 
 
Dividends declared on Common Shares
 
 
 
 
(81)
 
 
 
 
Change in period, before reclassification from AOCI, net of income tax (expense) benefit of $(210) and $332
 
 
 
 
 
898 
 
 
 
Amounts reclassified from AOCI, net of income tax benefit of $2 and $12
 
 
 
 
 
(25)
 
 
 
Change in period, net of income tax (expense) benefit of $(208) and $344
 
 
 
 
 
873 
 
 
 
Change in period, net of income tax (expense) benefit of $(42) and $62
 
 
 
 
 
 
78 
 
 
Change in period, net of income tax (expense) benefit of $5 and $(7)
 
 
 
 
 
 
 
(8)
 
Balance - end of period at Jun. 30, 2014
$ 30,325 
$ 8,501 
$ (630)
$ 5,055 
$ 15,304 
$ 2,047 
$ 141 
$ (93)
$ 2,095 
Consolidated Statements Of Shareholders' Equity (Parenthetical) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Net unrealized appreciation on investments, Change in period, income tax (expense) benefit
$ (208)
$ 344 
Cumulative translation adjustment, Change in period, income tax(expense) benefit
(42)
62 
Pension liability adjustment, Change in period, income tax (expense) benefit
5 
(7)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
Unrealized appreciation on investments, Change in period before reclassification to AOCI, income tax (expense) benefit
25 
61 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Accumulated Net Unrealized Investment Gain (Loss) [Member]
 
 
Unrealized appreciation on investments, Change in period before reclassification to AOCI, income tax (expense) benefit
2 
12 
Income tax expense from reclassification of unrealized gains
$ (210)
$ 332 
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash flows from operating activities
 
 
Net income
$ 1,513 
$ 1,844 
Adjustments to reconcile net income to net cash flows from operating activities
 
 
Net realized (gains) losses
177 
(310)
Amortization of premiums/discounts on fixed maturities
115 
134 
Deferred income taxes
117 
98 
Unpaid losses and loss expenses
(493)
(304)
Unearned premiums
594 
693 
Future policy benefits
139 
117 
Insurance and reinsurance balances payable
142 
182 
Accounts payable, accrued expenses, and other liabilities
37 
230 
Income taxes payable
(56)
20 
Insurance and reinsurance balances receivable
(244)
(611)
Reinsurance recoverable on losses and loss expenses
546 
538 
Reinsurance recoverable on policy benefits
(14)
2 
Deferred policy acquisition costs
(228)
(268)
Prepaid reinsurance premiums
(171)
(179)
Other
(78)
(378)
Net cash flows from operating activities
2,096 
1,808 
Cash flows from investing activities
 
 
Purchases of fixed maturities available for sale
(7,960)
(10,778)
Purchases of to be announced mortgage-backed securities
0 
(26)
Purchases of fixed maturities held to maturity
(129)
(299)
Purchases of equity securities
(64)
(194)
Sales of fixed maturities available for sale
3,842 
5,370 
Sales of to be announced mortgage-backed securities
0 
26 
Sales of equity securities
45 
62 
Maturities and redemptions of fixed maturities available for sale
3,163 
4,112 
Maturities and redemptions of fixed maturities held to maturity
414 
908 
Net change in short-term investments
(295)
(137)
Net derivative instruments settlements
(185)
(317)
Acquisition of subsidiaries (net of cash acquired of $4 and $38)
(172)
(977)
Other
(118)
(126)
Net cash flows used for investing activities
(1,459)
(2,376)
Cash flows from financing activities
 
 
Dividends paid on Common Shares
(428)
(169)
Common Shares repurchased
(557)
(212)
Proceeds from issuance of long-term debt
699 
947 
Proceeds from issuance of short-term debt
977 
1,570 
Repayment of long-term debt
(500)
0 
Repayment of short-term debt
(977)
(1,570)
Proceeds from share-based compensation plans, including windfall tax benefits
75 
62 
Other
86 
30 
Net cash flows (used for) from financing activities
(625)
658 
Effect of foreign currency rate changes on cash and cash equivalents
3 
(26)
Net increase in cash
15 
64 
Cash – beginning of period
579 1 2
615 3
Cash – end of period
594 2 4
679 3
Supplemental cash flow information
 
 
Taxes paid
148 
88 
Interest paid
$ 134 
$ 117 
Consolidated Statements of Cash Flows (Parentheticals) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Consolidated Statements of Cash Flows (Parentheticals) [Abstract]
 
 
Cash Acquired from Acquisition
$ 4 
$ 38 
General
General
General

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

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

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2013 Form 10-K.
Acquisitions
Acquisitions
Acquisitions

Large Corporate P&C Insurance Business of Itaú Seguros, S.A. (Itaú Seguros)
On July 4, 2014, we announced that we reached a definitive agreement to acquire the large corporate property and casualty (P&C) insurance business of Itaú Seguros, Brazil's leading carrier for that business, for approximately $685 million, at current exchange rates. This transaction, which is subject to regulatory approval and other customary closing conditions, is expected to be completed in the first quarter of 2015.
  
The Siam Commercial Samaggi Insurance PCL (Samaggi)
We and our local partner acquired 60.86 percent of Samaggi, a general insurance company in Thailand, from Siam Commercial Bank on April 28, 2014, and subsequently acquired an additional 32.17 percent ownership, through a mandatory tender offer, which expired on June 17, 2014. The purchase price for 93.03 percent of the company was $176 million in cash. This acquisition expands our presence in Thailand and Southeast Asia.

The acquisition generated $46 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $80 million based on ACE’s preliminary purchase price allocation.  The other intangible assets primarily relate to a bancassurance agreement. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

ABA Seguros
On May 2, 2013, we acquired ABA Seguros, a property and casualty insurer in Mexico that provides automobile, homeowners, and small business coverages for approximately $690 million in cash.

The acquisition generated $285 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $140 million based on ACE’s purchase price allocation. The other intangible assets primarily relate to distribution channels. Amortization of other intangible assets is included in Other (income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

Fianzas Monterrey
On April 1, 2013, we acquired Fianzas Monterrey, a leading surety lines company in Mexico offering administrative performance bonds primarily to clients in the construction and industrial sectors, for approximately $293 million in cash. This acquisition greatly expanded our global franchise in the surety business and enhanced our existing commercial lines and personal accident insurance business in Mexico.

The acquisition generated $137 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $73 million, based on ACE's purchase price allocation. The other intangible assets primarily relate to customer lists. Amortization of other intangible assets is included in Other (income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.
Investments
Investments
Investments

a) Fixed maturities
 
June 30, 2014
Amortized
Cost

 
Gross
Unrealized
Appreciation

 
Gross
Unrealized
Depreciation

 
Fair
Value

 
OTTI Recognized
in AOCI

(in millions of U.S. dollars)
 
 
 
 
Available for sale
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
2,806

 
$
80

 
$
(17
)
 
$
2,869

 
$
—

Foreign
15,084

 
563

 
(38
)
 
15,609

 
(1
)
Corporate securities
17,085

 
981

 
(36
)
 
18,030

 
(3
)
Mortgage-backed securities
11,185

 
308

 
(75
)
 
11,418

 
(10
)
States, municipalities, and political subdivisions
3,559

 
131

 
(15
)
 
3,675

 
—

 
$
49,719

 
$
2,063

 
$
(181
)
 
$
51,601

 
$
(14
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
779

 
$
18

 
$
(2
)
 
$
795

 
$
—

Foreign
809

 
44

 
—

 
853

 
—

Corporate securities
1,828

 
101

 
—

 
1,929

 
—

Mortgage-backed securities
1,187

 
54

 
—

 
1,241

 
—

States, municipalities, and political subdivisions
1,171

 
31

 
(5
)
 
1,197

 
—

 
$
5,774

 
$
248

 
$
(7
)
 
$
6,015

 
$
—


December 31, 2013
Amortized
Cost

 
Gross
Unrealized
Appreciation

 
Gross
Unrealized
Depreciation

 
Fair
Value

 
OTTI Recognized
in AOCI

(in millions of U.S. dollars)
 
 
 
 
Available for sale
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
2,946

 
$
62

 
$
(59
)
 
$
2,949

 
$
—

Foreign
14,336

 
377

 
(122
)
 
14,591

 
—

Corporate securities
16,825

 
777

 
(132
)
 
17,470

 
(6
)
Mortgage-backed securities
10,937

 
184

 
(227
)
 
10,894

 
(34
)
States, municipalities, and political subdivisions
3,362

 
65

 
(77
)
 
3,350

 
—

 
$
48,406

 
$
1,465

 
$
(617
)
 
$
49,254

 
$
(40
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
820

 
$
16

 
$
(4
)
 
$
832

 
$
—

Foreign
864

 
33

 
—

 
897

 
—

Corporate securities
1,922

 
83

 
—

 
2,005

 
—

Mortgage-backed securities
1,341

 
39

 
(1
)
 
1,379

 
—

States, municipalities, and political subdivisions
1,151

 
16

 
(17
)
 
1,150

 
—

 
$
6,098

 
$
187

 
$
(22
)
 
$
6,263

 
$
—


As discussed in Note 3 c), if a credit loss is indicated on an impaired fixed maturity, an OTTI is considered to have occurred and the portion of the impairment not related to credit losses (non-credit OTTI) is recognized in OCI. Included in the “OTTI Recognized in AOCI” columns above are the cumulative amounts of non-credit OTTI recognized in OCI adjusted for subsequent sales, maturities, and redemptions. OTTI recognized in AOCI does not include the impact of subsequent changes in fair value of the related securities. In periods subsequent to a recognition of OTTI in OCI, changes in the fair value of the related fixed maturities are reflected in Unrealized appreciation (depreciation) in the consolidated statement of shareholders’ equity. For the three and six months ended June 30, 2014, $1 million and $5 million, respectively, of net unrealized appreciation related to such securities is included in OCI. For the three and six months ended June 30, 2013, $1 million and $25 million, respectively, of net unrealized appreciation related to such securities is included in OCI. At June 30, 2014 and December 31, 2013, AOCI includes cumulative net unrealized depreciation of $1 million and $4 million, respectively, related to securities remaining in the investment portfolio at those dates for which ACE has recognized a non-credit OTTI.

Mortgage-backed securities (MBS) issued by U.S. government agencies are combined with all other to be announced mortgage derivatives held (refer to Note 7 a) (iv)) and are included in the category, “Mortgage-backed securities”. Approximately 83 percent of the total mortgage-backed securities at June 30, 2014 and December 31, 2013 are represented by investments in U.S. government agency bonds. The remainder of the mortgage exposure consists of collateralized mortgage obligations and non-government mortgage-backed securities, the majority of which provide a planned structure for principal and interest payments and carry a rating of AAA by the major credit rating agencies.

The following table presents fixed maturities by contractual maturity:
 
 
 
June 30

 
 
 
December 31

 
 
 
2014

 
 
 
2013

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

 
Fair Value

 
Amortized Cost

 
Fair Value

Available for sale
 
 
 
 
 
 
 
Due in 1 year or less
$
2,513

 
$
2,537

 
$
2,387

 
$
2,411

Due after 1 year through 5 years
15,095

 
15,692

 
14,139

 
14,602

Due after 5 years through 10 years
15,917

 
16,575

 
16,200

 
16,535

Due after 10 years
5,009

 
5,379

 
4,743

 
4,812

 
38,534

 
40,183

 
37,469

 
38,360

Mortgage-backed securities
11,185

 
11,418

 
10,937

 
10,894

 
$
49,719

 
$
51,601

 
$
48,406

 
$
49,254

Held to maturity
 
 
 
 
 
 
 
Due in 1 year or less
$
483

 
$
489

 
$
401

 
$
405

Due after 1 year through 5 years
2,590

 
2,693

 
2,284

 
2,363

Due after 5 years through 10 years
1,157

 
1,206

 
1,686

 
1,723

Due after 10 years
357

 
386

 
386

 
393

 
4,587

 
4,774

 
4,757

 
4,884

Mortgage-backed securities
1,187

 
1,241

 
1,341

 
1,379

 
$
5,774

 
$
6,015

 
$
6,098

 
$
6,263



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

b) Equity securities
 
June 30


December 31

(in millions of U.S. dollars)
2014


2013

Cost
$
874

 
$
841

Gross unrealized appreciation
77

 
63

Gross unrealized depreciation
(44
)
 
(67
)
Fair value
$
907

 
$
837



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

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

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

•
the amount of time a security has been in a loss position and the magnitude of the loss position;
•
the period in which cost is expected to be recovered, if at all, based on various criteria including economic conditions and other issuer-specific developments; and
•
ACE’s ability and intent to hold the security to the expected recovery period.

As a general rule, we also consider that equity securities in an unrealized loss position for twelve consecutive months are other than temporarily impaired. For mutual funds included in equity securities in our consolidated balance sheet, we employ analysis similar to fixed maturities, when applicable.

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

Projected cash flows for corporate securities (principally senior unsecured bonds) are driven primarily by assumptions regarding probability of default and also the timing and amount of recoveries associated with defaults. ACE developed projected cash flows for corporate securities using market observable data, issuer-specific information, and credit ratings. We use historical default data by Moody’s Investors Service (Moody’s) rating category to calculate a 1-in-100 year probability of default, which results in a default assumption in excess of the historical mean default rate. Consistent with management's approach, ACE assumed a 32 percent recovery rate (the par value of a defaulted security that will be recovered) across all rating categories rather than using Moody's historical mean recovery rate of 42 percent. We believe that use of a default assumption in excess of the historical mean is conservative in light of current market conditions.

For the three and six months ended June 30, 2014, credit losses recognized in Net income for corporate securities were $6 million and $10 million, respectively. For the three and six months ended June 30, 2013, credit losses recognized in Net income for corporate securities were $6 million and $7 million, respectively.

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

For the three and six months ended June 30, 2014 and 2013, there were no credit losses recognized in Net income for mortgage-backed securities.
The following table presents the Net realized gains (losses) and the losses included in Net realized gains (losses) and OCI as a result of conditions which caused us to conclude the decline in fair value of certain investments was “other-than-temporary”: 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Fixed maturities:
 
 
 
 
 
 
 
OTTI on fixed maturities, gross
$
(9
)
 
$
(6
)
 
$
(15
)
 
$
(7
)
OTTI on fixed maturities recognized in OCI (pre-tax)
1

 
—

 
2

 
—

OTTI on fixed maturities, net
(8
)
 
(6
)
 
(13
)
 
(7
)
Gross realized gains excluding OTTI
54

 
64

 
90

 
126

Gross realized losses excluding OTTI
(26
)
 
(27
)
 
(46
)
 
(52
)
Total fixed maturities
20

 
31

 
31

 
67

Equity securities:
 
 
 
 
 
 
 
OTTI on equity securities
(1
)
 
—

 
(7
)
 
(1
)
Gross realized gains excluding OTTI
2

 
8

 
4

 
10

Gross realized losses excluding OTTI
—

 
(1
)
 
(1
)
 
(3
)
Total equity securities
1

 
7

 
(4
)
 
6

OTTI on other investments
(3
)
 
(1
)
 
(3
)
 
(2
)
Foreign exchange gains (losses)
(14
)
 
(5
)
 
(23
)
 
71

Investment and embedded derivative instruments
(15
)
 
40

 
(40
)
 
58

Fair value adjustments on insurance derivative
2

 
101

 
(46
)
 
429

S&P put options and futures
(72
)
 
(68
)
 
(91
)
 
(318
)
Other derivative instruments
9

 
(1
)
 
7

 
(1
)
Other
(1
)
 
—

 
(8
)
 
—

Net realized gains (losses)
$
(73
)
 
$
104

 
$
(177
)
 
$
310


 
The following table presents a roll-forward of pre-tax credit losses related to fixed maturities for which a portion of OTTI was recognized in OCI: 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Balance of credit losses related to securities still held – beginning of period
$
35

 
$
35

 
$
37

 
$
43

Additions where no OTTI was previously recorded
5

 
4

 
7

 
4

Additions where an OTTI was previously recorded
1

 
2

 
3

 
3

Reductions for securities sold during the period
(17
)
 
(1
)
 
(23
)
 
(10
)
Balance of credit losses related to securities still held – end of period
$
24

 
$
40

 
$
24

 
$
40



d) Gross unrealized loss
At June 30, 2014, there were 3,253 fixed maturities out of a total of 25,285 fixed maturities in an unrealized loss position. The largest single unrealized loss in the fixed maturities was $3 million. There were 52 equity securities out of a total of 186 equity securities in an unrealized loss position. The largest single unrealized loss in the equity securities was $42 million. Fixed maturities in an unrealized loss position at June 30, 2014, comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase. As of June 30, 2014, there was one mutual fund, classified as an equity security investment, that was in a continuous unrealized loss position for more than twelve months where an other-than-temporary loss was not recorded. The unrealized loss of $42 million was approximately 8 percent of the original cost of the related equity security. We believe the impairment was temporary based on the relative price decline of the security and our intent and ability to hold the investment to its anticipated recovery.

The following tables present, for all securities in an unrealized loss position (including securities on loan), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
June 30, 2014
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

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

 
$
—

 
$
1,069

 
$
(19
)
 
$
1,069

 
$
(19
)
Foreign
1,274

 
(11
)
 
1,303

 
(27
)
 
2,577

 
(38
)
Corporate securities
1,118

 
(12
)
 
1,050

 
(24
)
 
2,168

 
(36
)
Mortgage-backed securities
486

 
(4
)
 
2,540

 
(71
)
 
3,026

 
(75
)
States, municipalities, and political subdivisions
366

 
(4
)
 
1,041

 
(16
)
 
1,407

 
(20
)
Total fixed maturities
3,244

 
(31
)
 
7,003

 
(157
)
 
10,247

 
(188
)
Equity securities
45

 
(2
)
 
462

 
(42
)
 
507

 
(44
)
Other investments
39

 
(1
)
 
—

 
—

 
39

 
(1
)
Total
$
3,328

 
$
(34
)
 
$
7,465

 
$
(199
)
 
$
10,793

 
$
(233
)
 
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
December 31, 2013
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
1,794

 
$
(57
)
 
$
31

 
$
(6
)
 
$
1,825

 
$
(63
)
Foreign
4,621

 
(114
)
 
201

 
(8
)
 
4,822

 
(122
)
Corporate securities
3,836

 
(118
)
 
194

 
(14
)
 
4,030

 
(132
)
Mortgage-backed securities
5,248

 
(197
)
 
384

 
(31
)
 
5,632

 
(228
)
States, municipalities, and political subdivisions
2,164

 
(90
)
 
84

 
(4
)
 
2,248

 
(94
)
Total fixed maturities
17,663

 
(576
)
 
894

 
(63
)
 
18,557

 
(639
)
Equity securities
498

 
(67
)
 
—

 
—

 
498

 
(67
)
Other investments
67

 
(9
)
 
—

 
—

 
67

 
(9
)
Total
$
18,228

 
$
(652
)
 
$
894

 
$
(63
)
 
$
19,122

 
$
(715
)


e) Restricted assets
ACE is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance operations. These requirements are generally promulgated in the statutory regulations of the individual jurisdictions. The assets on deposit are available to settle insurance and reinsurance liabilities. ACE is also required to restrict assets pledged under repurchase agreements. We also use trust funds in certain large reinsurance transactions where the trust funds are set up for the benefit of the ceding companies and generally take the place of letter of credit (LOC) requirements. We also have investments in segregated portfolios primarily to provide collateral or guarantees for LOC and derivative transactions. Included in restricted assets at June 30, 2014 and December 31, 2013, are investments, primarily fixed maturities, totaling $15.7 billion and $16.3 billion, respectively, and cash of $84 million and $162 million, respectively.
The following table presents the components of restricted assets:
 
June 30

 
December 31

(in millions of U.S. dollars)
2014

 
2013

Trust funds
$
10,554

 
$
11,315

Deposits with non-U.S. regulatory authorities
1,969

 
1,970

Assets pledged under repurchase agreements
1,451

 
1,435

Deposits with U.S. regulatory authorities
1,336

 
1,334

Other pledged assets
459

 
391

 
$
15,769

 
$
16,445

Fair value measurements
Fair value measurements
Fair value measurements

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

•
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;
•
Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as
interest rates and yield curves, quoted prices for similar assets and liabilities in active markets, and quoted prices for identical or similar assets and liabilities in markets that are not active; and
•
Level 3 – Inputs that are unobservable and reflect management’s judgments about assumptions that market participants
would use in pricing an asset or liability.

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

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

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

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

Short-term investments
Short-term investments, which comprise securities due to mature within one year of the date of purchase that are traded in active markets, are classified within Level 1 as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their cost approximates fair value. Short-term investments for which pricing is unobservable are classified within Level 3.

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

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

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

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

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

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

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

A lapse rate is the percentage of in-force policies surrendered in a given calendar year. All else equal, as lapse rates increase, ultimate claim payments will decrease.

GMIB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed benefit provided under the GMIB. All else equal, as GMIB annuitization rates increase, ultimate claim payments will increase, subject to treaty claim limits.

The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data available from cedants. For treaties with limited experience, rates are established in line with data received from other ceding companies adjusted, as appropriate, with industry estimates. The model and related assumptions are continuously re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of more information, such as market conditions, market participant assumptions, and demographics of in-force annuities. During the three and six months ended June 30, 2014, no material changes were made to actuarial or behavioral assumptions. We made minor technical refinements to the model with a favorable (unfavorable) net income impact of approximately $1 million and $(2) million for the three and six months ended June 30, 2014, respectively. For detailed information on our lapse and annuitization rate assumptions, refer to Note 4 to the Consolidated Financial Statements of our 2013 Form 10-K.

We view the variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of a cumulative long-term economic net loss relatively small at the time of pricing. However, adverse changes in market factors and policyholder behavior will have an adverse impact on net income, which may be material. Because of the significant use of unobservable inputs including policyholder behavior, GLB reinsurance is classified within Level 3.
The following tables present, by valuation hierarchy, the financial instruments measured at fair value on a recurring basis:
June 30, 2014
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,677

 
$
1,192

 
$
—

 
$
2,869

Foreign
216

 
15,381

 
12

 
15,609

Corporate securities
—

 
17,826

 
204

 
18,030

Mortgage-backed securities
—

 
11,411

 
7

 
11,418

States, municipalities, and political subdivisions
—

 
3,675

 
—

 
3,675

 
1,893

 
49,485

 
223

 
51,601

Equity securities
414

 
491

 
2

 
907

Short-term investments
1,069

 
1,039

 
—

 
2,108

Other investments
336

 
254

 
2,640

 
3,230

Securities lending collateral
—

 
1,440

 
—

 
1,440

Investment derivative instruments
9

 
—

 
—

 
9

Other derivative instruments
16

 
2

 
—

 
18

Separate account assets
1,349

 
88

 
—

 
1,437

Total assets measured at fair value
$
5,086

 
$
52,799

 
$
2,865

 
$
60,750

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
10

 
$
—

 
$
—

 
$
10

Other derivative instruments
15

 
2

 
—

 
17

GLB(1)
—

 
—

 
241

 
241

Total liabilities measured at fair value
$
25

 
$
2

 
$
241

 
$
268

(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
 
December 31, 2013
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,626

 
$
1,323

 
$
—

 
$
2,949

Foreign
223

 
14,324

 
44

 
14,591

Corporate securities
—

 
17,304

 
166

 
17,470

Mortgage-backed securities
—

 
10,886

 
8

 
10,894

States, municipalities, and political subdivisions
—

 
3,350

 
—

 
3,350

 
1,849

 
47,187

 
218

 
49,254

Equity securities
373

 
460

 
4

 
837

Short-term investments
953

 
803

 
7

 
1,763

Other investments
305

 
231

 
2,440

 
2,976

Securities lending collateral
—

 
1,632

 
—

 
1,632

Investment derivative instruments
19

 
—

 
—

 
19

Other derivative instruments
—

 
6

 
—

 
6

Separate account assets
1,145

 
81

 
—

 
1,226

Total assets measured at fair value
$
4,644

 
$
50,400

 
$
2,669

 
$
57,713

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
6

 
$
—

 
$
—

 
$
6

Other derivative instruments
60

 
2

 
—

 
62

GLB(1)
—

 
—

 
193

 
193

Total liabilities measured at fair value
$
66

 
$
2

 
$
193

 
$
261

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

The following table presents transfers of financial instruments between Level 1 and Level 2:
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Transfers from Level 1 to Level 2
$
—

 
$
6

 
$
—

 
$
19

Transfers from Level 2 to Level 1
—

 
—

 
—

 
—



Fair value of alternative investments
Included in Other investments in the fair value hierarchy at June 30, 2014 and December 31, 2013 are investment funds, limited partnerships, and partially-owned investment companies measured at fair value using NAV as a practical expedient. At June 30, 2014 and December 31, 2013, there were no probable or pending sales related to any of the investments measured at fair value using NAV. 

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

 
 
 
December 31

 
Expected
Liquidation
Period of Underlying Assets
 
 
 
2014

 
 
 
2013

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

 
Maximum
Future Funding
Commitments

 
Fair
Value

 
Maximum
Future Funding
Commitments

Financial
5 to 9 Years
 
$
274

 
$
119

 
$
256

 
$
129

Real estate
3 to 9 Years
 
322

 
63

 
322

 
92

Distressed
6 to 9 Years
 
265

 
145

 
180

 
230

Mezzanine
6 to 9 Years
 
303

 
222

 
276

 
252

Traditional
3 to 8 Years
 
923

 
448

 
813

 
456

Vintage
1 to 3 Years
 
11

 
—

 
13

 
—

Investment funds
Not Applicable
 
385

 
—

 
428

 
—

 
 
 
$
2,483

 
$
997

 
$
2,288

 
$
1,159



Included in all categories in the above table except for Investment funds are investments for which ACE will never have the contractual option to redeem but receives distributions based on the liquidation of the underlying assets. Further, for all categories except for Investment funds, ACE does not have the ability to sell or transfer the investments without the consent from the general partner of individual funds.
Investment Category
 
Consists of investments in private equity funds:
Financial
 
targeting financial services companies such as financial institutions and insurance services worldwide
Real estate
 
targeting global distress opportunities, value added U.S. properties, and global mezzanine debt securities in the commercial real estate market
Distressed
 
targeting distressed debt/credit and equity opportunities in the U.S
Mezzanine
 
targeting private mezzanine debt of large-cap and mid-cap companies in the U.S. and worldwide
Traditional
 
employing traditional private equity investment strategies such as buyout and venture with different geographical focuses including Brazil, Asia, Europe, and the U.S.
Vintage
 
made before 2002 and where the funds’ commitment periods had already expired

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

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

The following table presents the significant unobservable inputs used in the Level 3 liability valuations. Excluded from the table below are inputs used to determine the fair value of Level 3 assets which are based on single broker quotes or net asset value and contain no quantitative unobservable inputs developed by management. 
(in millions of U.S. dollars, except for percentages)
Fair Value
 
Valuation
Technique
 
Significant
Unobservable Inputs
 
Ranges
June 30, 2014

 
December 31, 2013

 
 
 
GLB(1)
$
241

 
$
193

 
Actuarial model
 
Lapse rate
 
1% – 30%
 
 
 
 
 
 
 
Annuitization rate
 
0% – 55%
(1) 
Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

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

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

 
Other
investments

 
GLB(1)

June 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
26

 
$
151

 
$
8

 
$
2

 
$
2,611

 
$
243

Transfers into Level 3
2

 
26

 
—

 
—

 
—

 
—

Transfers out of Level 3
(16
)
 
—

 
—

 
—

 
—

 
—

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

 
2

 
—

 
—

 
7

 
—

Net Realized Gains/Losses
1

 
—

 
—

 
—

 
(3
)
 
(2
)
Purchases
—

 
30

 
—

 
—

 
152

 
—

Sales
(1
)
 
(2
)
 
—

 
—

 
(2
)
 
—

Settlements
—

 
(3
)
 
(1
)
 
—

 
(125
)
 
—

Balance–End of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
2,640

 
$
241

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

 
$
—

 
$
—

 
$
—

 
$
(3
)
 
$
(2
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
  
Assets
 
 
Liabilities

 
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Short-term investments

 
Other
investments

 
GLB(1)

Three Months Ended
Foreign

 
Corporate
securities

 
MBS

 
 
 
June 30, 2013
 
 
 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
35

 
$
118

 
$
13

 
$
2

 
$
—

 
$
2,328

 
$
753

Transfers into Level 3
29

 
5

 
—

 
7

 
7

 
—

 
—

Transfers out of Level 3
(14
)
 
(27
)
 
—

 
—

 
—

 
—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(4
)
 
(1
)
 
—

 
(5
)
 
—

 
13

 
—

Net Realized Gains/Losses
—

 
(1
)
 
—

 
4

 
—

 
(1
)
 
(101
)
Purchases
3

 
23

 
—

 
1

 
2

 
113

 
—

Sales
(1
)
 
—

 
(3
)
 
(5
)
 
—

 
—

 
—

Settlements
—

 
(3
)
 
(1
)
 
—

 
—

 
(104
)
 
—

Balance–End of Period
$
48

 
$
114

 
$
9

 
$
4

 
$
9

 
$
2,349

 
$
652

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

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
(101
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.0 billion at March 31, 2013, which includes a fair value derivative adjustment of $652 million and $753 million, respectively.

 
Assets
 
 
Liabilities

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

 
Short-term investments

 
Other
investments

 
GLB(1)

June 30, 2014
Foreign

 
Corporate
securities

 
MBS

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

 
$
166

 
$
8

 
$
4

 
$
7

 
$
2,440

 
$
193

Transfers into Level 3
2

 
30

 
—

 
—

 
—

 
—

 
—

Transfers out of Level 3
(34
)
 
(22
)
 
—

 
(2
)
 
(7
)
 
—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
2

 
—

 
1

 
—

 
48

 
—

Net Realized Gains/Losses
1

 
—

 
—

 
—

 
—

 
(3
)
 
48

Purchases
2

 
45

 
—

 
1

 
—

 
352

 
—

Sales
(2
)
 
(8
)
 
—

 
(2
)
 
—

 
(3
)
 
—

Settlements
—

 
(9
)
 
(1
)
 
—

 
—

 
(194
)
 
—

Balance–End of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
—

 
$
2,640

 
$
241

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

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(3
)
 
$
48

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

  
Assets
 
 
Liabilities

 
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Short-term investments

Other
investments

 
GLB(1)

Six Months Ended
Foreign

 
Corporate
securities

 
MBS

 
 
 
June 30, 2013
 
 
 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
60

 
$
102

 
$
13

 
$
3

 
$
—

$
2,252

 
$
1,119

Transfers into Level 3
32

 
17

 
—

 
7

 
7

—

 
—

Transfers out of Level 3
(41
)
 
(29
)
 
—

 
(1
)
 
—

—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(4
)
 
—

 
—

 
(5
)
 
—

35

 
—

Net Realized Gains/Losses
1

 
(1
)
 
—

 
4

 
—

(2
)
 
(467
)
Purchases
3

 
33

 
—

 
1

 
2

249

 
—

Sales
(2
)
 
—

 
(3
)
 
(5
)
 
—

(9
)
 
—

Settlements
(1
)
 
(8
)
 
(1
)
 
—

 
—

(176
)
 
—

Balance–End of Period
$
48

 
$
114

 
$
9

 
$
4

 
$
9

$
2,349

 
$
652

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

 
$
—

 
$
—

 
$
—

 
$
—

$
(2
)
 
$
(467
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.4 billion at December 31, 2012, which includes a fair value derivative adjustment of $652 million and $1.1 billion, respectively.

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

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

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

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

The following tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at fair value:
June 30, 2014
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
601

 
$
194

 
$
—

 
$
795

 
$
779

Foreign
—

 
853

 
—

 
853

 
809

Corporate securities
—

 
1,914

 
15

 
1,929

 
1,828

Mortgage-backed securities
—

 
1,241

 
—

 
1,241

 
1,187

States, municipalities, and political subdivisions
—

 
1,197

 
—

 
1,197

 
1,171

 
601

 
5,399

 
15

 
6,015

 
5,774

Partially-owned insurance companies
—

 
—

 
470

 
470

 
470

Total assets
$
601

 
$
5,399

 
$
485

 
$
6,485

 
$
6,244

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
—

 
$
1,870

 
$
—

 
$
1,870

 
$
1,851

Long-term debt
—

 
4,392

 
—

 
4,392

 
4,057

Trust preferred securities
—

 
456

 
—

 
456

 
309

Total liabilities
$
—

 
$
6,718

 
$
—

 
$
6,718

 
$
6,217


December 31, 2013
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
596

 
$
236

 
$
—

 
$
832

 
$
820

Foreign
—

 
897

 
—

 
897

 
864

Corporate securities
—

 
1,990

 
15

 
2,005

 
1,922

Mortgage-backed securities
—

 
1,379

 
—

 
1,379

 
1,341

States, municipalities, and political subdivisions
—

 
1,150

 
—

 
1,150

 
1,151

 
596

 
5,652

 
15

 
6,263

 
6,098

Partially-owned insurance companies
—

 
—

 
470

 
470

 
470

Total assets
$
596

 
$
5,652

 
$
485

 
$
6,733

 
$
6,568

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
—

 
$
1,913

 
$
—

 
$
1,913

 
$
1,901

Long-term debt
—

 
4,088

 
—

 
4,088

 
3,807

Trust preferred securities
—

 
438

 
—

 
438

 
309

Total liabilities
$
—

 
$
6,439

 
$
—

 
$
6,439

 
$
6,017

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

The following table presents income and expenses relating to GMDB and GLB reinsurance. GLBs include GMIBs as well as some GMABs originating in Japan.
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

GMDB
 
 
 
 
 
 
 
Net premiums earned
$
18

 
$
20

 
$
37

 
$
40

Policy benefits and other reserve adjustments
$
13

 
$
25

 
$
28

 
$
44

GLB
 
 
 
 
 
 
 
Net premiums earned
$
34

 
$
37

 
$
70

 
$
76

Policy benefits and other reserve adjustments
10

 
2

 
19

 
11

Net realized gains (losses)
2

 
101

 
(48
)
 
470

Gain recognized in income
$
26

 
$
136

 
$
3

 
$
535

Net cash received
$
29

 
$
31

 
$
62

 
$
63

Net (increase) decrease in liability
$
(3
)
 
$
105

 
$
(59
)
 
$
472



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

At June 30, 2014, reported liabilities for GMDB and GLB reinsurance were $107 million and $486 million, respectively, compared with $100 million and $427 million, respectively, at December 31, 2013. The reported liability for GLB reinsurance of $486 million at June 30, 2014, and $427 million at December 31, 2013, includes a fair value derivative adjustment of $241 million and $193 million, respectively. Reported liabilities for both GMDB and GLB reinsurance are determined using internal valuation models. Such valuations require considerable judgment and are subject to significant uncertainty. The valuation of these products is subject to fluctuations arising from, among other factors, changes in interest rates, changes in equity markets, changes in credit markets, changes in the allocation of the investments underlying annuitants’ account values, and assumptions regarding future policyholder behavior. These models and the related assumptions are continually reviewed by management and enhanced, as appropriate, based upon improvements in modeling assumptions and availability of more information, such as market conditions and demographics of in-force annuities.

Variable Annuity Net Amount at Risk
(i) Reinsurance covering the GMDB risk only
At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GMDB risk only was $601 million and $586 million, respectively.

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

•
policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);
•
there are no lapses or withdrawals;
•
mortality according to 100 percent of the Annuity 2000 mortality table;
•
future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 1.5 percent and 2.5 percent; and
•
reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering the GMDB risk only, if all the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $676 million. This takes into account all applicable reinsurance treaty claim limits.

(ii) Reinsurance covering the GLB risk only
At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GLB risk only was $173 million and $136 million, respectively.

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

•
policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);
•
there are no deaths, lapses, or withdrawals;
•
policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;
•
for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;
•
future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.5 percent and 4.5 percent; and
•
reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty. 

(iii) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders
At June 30, 2014 and December 31, 2013, the GMDB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $69 million and $73 million, respectively.

At June 30, 2014 and December 31, 2013, the GLB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $142 million and $141 million, respectively.

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

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

•
policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);
•
there are no lapses or withdrawals;
•
mortality according to 100 percent of the Annuity 2000 mortality table;
•
policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;
•
for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;
•
future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.0 percent and 4.0 percent; and
•
reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, if all of the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $64 million. This takes into account all applicable reinsurance treaty claim limits. Although there would be an increase in death claims resulting from 100 percent immediate mortality of all policyholders, the GLB claims would be zero.

The average attained age of all policyholders under sections i), ii), and iii) above, weighted by the guaranteed value of each reinsured policy, is approximately 69 years.
Debt
Debt Disclosure [Text Block]
6. Debt

In May 2014, ACE INA Holdings Inc. issued $700 million of 3.35 percent senior notes due May 2024.  These senior notes are redeemable at any time at ACE INA Holdings Inc.'s option subject to a “make-whole” premium (the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate plus 0.15 percent). The notes are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law. These notes do not have the benefit of any sinking fund.  These senior unsecured notes are guaranteed on a senior basis by ACE Limited and they rank equally with all of ACE's other senior obligations.  They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

In May 2014, we reclassified ACE INA Holdings Inc.'s $450 million of 5.6 percent senior notes, due to mature on May 15, 2015, from Long-term debt to Short-term debt in the consolidated balance sheet.

In June 2014, ACE INA Holdings Inc.'s $500 million of 5.875 percent senior notes matured and were fully paid.
Commitments, contingencies, and guarantees
Commitments, contingencies, and guarantees
Commitments, contingencies, and guarantees

a) Derivative instruments
Derivative instruments employed
ACE maintains positions in derivative instruments such as futures, options, swaps, and foreign currency forward contracts for which the primary purposes are to manage duration and foreign currency exposure, yield enhancement, or to obtain an exposure to a particular financial market. ACE also maintains positions in convertible securities that contain embedded derivatives. Investment derivative instruments are recorded in either Other assets (OA) or Accounts payable, accrued expenses, and other liabilities (AP), convertible bonds are recorded in Fixed maturities available for sale (FM AFS) and convertible equity securities are recorded in Equity securities (ES) in the consolidated balance sheets. These are the most numerous and frequent derivative transactions.

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

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

In relation to certain debt issuances, ACE from time to time enters into interest rate swap transactions for the purpose of either fixing or reducing borrowing costs. Although the use of these interest rate swaps has the economic effect of fixing or reducing borrowing costs on a net basis, gross interest expense on the related debt issuances is included in Interest expense while the settlements related to the interest rate swaps are reflected in Net realized gains (losses) in the consolidated statements of operations. At June 30, 2014, ACE had no in-force interest rate swaps.

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

The following table presents the balance sheet locations, fair values of derivative instruments in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:
 
 
 
 
 
June 30, 2014
 
 
 
 
December 31, 2013
 
 
Consolidated
Balance Sheet
Location
 
Fair Value
 
 
Notional
Value/
Payment
Provision

 
Fair Value
 
 
Notional
Value/
Payment
Provision

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

 
Derivative (Liability)

 
 
Derivative Asset

 
Derivative (Liability)

 
Investment and embedded derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
OA / (AP)
 
$
2

 
$
(4
)
 
$
1,296

 
$
3

 
$
(4
)
 
$
1,202

Cross-currency swaps
OA / (AP)
 
—

 
—

 
95

 
—

 
—

 
50

Options/Futures contracts on money market instruments
OA / (AP)
 
2

 
—

 
1,432

 
3

 
—

 
3,910

Futures contracts on notes and bonds
OA / (AP)
 
5

 
(6
)
 
1,372

 
13

 
(2
)
 
871

Convertible securities(1)
FM AFS / ES
 
333

 
—

 
280

 
302

 
—

 
254

 
 
 
$
342

 
$
(10
)
 
$
4,475

 
$
321

 
$
(6
)
 
$
6,287

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

 
$
(15
)
 
$
1,468

 
$
—

 
$
(60
)
 
$
1,692

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

 
—

 
250

 
6

 
—

 
250

Other
OA / (AP)
 
16

 
(2
)
 
72

 
—

 
(2
)
 
8

 
 
 
$
18

 
$
(17
)
 
$
1,790

 
$
6

 
$
(62
)
 
$
1,950

GLB(3)
(AP) / (FPB)
 
$
—

 
$
(486
)
 
$
315

 
$
—

 
$
(427
)
 
$
277


(1) 
Includes fair value of embedded derivatives.
(2) 
Related to GMDB and GLB blocks of business.
(3) 
Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

At June 30, 2014 and December 31, 2013, derivative liabilities of $14 million and $41 million, respectively, included in the table above were subject to a master netting agreement.  The remaining derivatives included in the table above were not subject to a master netting agreement. 

At both June 30, 2014 and December 31, 2013, our repurchase obligations of $1,401 million were fully collateralized.  At June 30, 2014 and December 31, 2013, our securities lending payable was $1,441 million and $1,633 million, respectively, and our securities lending collateral was $1,440 million and $1,632 million, respectively.  The securities lending collateral can only be accessed in the event that the institution borrowing the securities is in default under the lending agreement.  An indemnification agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of the securities on loan.  In contrast to securities lending programs, the use of cash received is not restricted for the repurchase obligations.

The following table presents net realized gains (losses) related to derivative instrument activity in the consolidated statements of operations:
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Investment and embedded derivative instruments
 
 
 
 
 
 
 
Foreign currency forward contracts
$
(1
)
 
$
12

 
$
(4
)
 
$
17

All other futures contracts and options
(18
)
 
33

 
(40
)
 
40

Convertible securities(1)
4

 
(5
)
 
4

 
1

Total investment and embedded derivative instruments
$
(15
)
 
$
40

 
$
(40
)
 
$
58

GLB and other derivative instruments
 
 
 
 
 
 
 
GLB(2)
$
2

 
$
101

 
$
(46
)
 
$
429

Futures contracts on equities(3)
(71
)
 
(66
)
 
(88
)
 
(303
)
Options on equity market indices(3)
(1
)
 
(2
)
 
(3
)
 
(15
)
Other
9

 
(1
)
 
7

 
(1
)
Total GLB and other derivative instruments
$
(61
)
 
$
32

 
$
(130
)
 
$
110

 
$
(76
)
 
$
72

 
$
(170
)
 
$
168

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

Derivative instrument objectives

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

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

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

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

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

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

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

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

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

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

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

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

b) Other investments
At June 30, 2014, included in Other investments in the consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $2.1 billion. In connection with these investments, we have commitments that may require funding of up to $1.0 billion over the next several years. 

c) Taxation
As of June 30, 2014, $27 million of unrecognized tax benefits remains outstanding. It is reasonably possible that over the next twelve months, the amount of unrecognized tax benefits may change resulting from the re-evaluation of unrecognized tax benefits arising from examinations of taxing authorities. With few exceptions, ACE is no longer subject to state and local or non-U.S. income tax examinations for years before 2005.

d) Letters of credit
We did not renew our $500 million bilateral letter of credit facility that expired in June 2014.  We elected instead to satisfy our collateral obligations primarily with insurance trusts supported by our investment portfolio.

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

All of ACE’s Common Shares are authorized under Swiss corporate law. Though the par value of Common Shares is stated in Swiss francs, ACE continues to use U.S. dollars as its reporting currency for preparing consolidated financial statements. Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value reduction) or from legal reserves, must be stated in Swiss francs though dividend payments are made by ACE in U.S. dollars. At our May 2013 and May 2014 annual general meetings, our shareholders approved a dividend for the following year, respectively, payable in four quarterly installments after the annual general meetings in the form of a distribution by way of a par value reduction. At the January 10, 2014 Extraordinary General Meeting, our shareholders approved a resolution to increase our quarterly dividend from $0.51 per share to $0.63 per share for the final two quarterly installments (made on January 31, 2014 and April 17, 2014) that had been earlier approved at our 2013 annual general meeting. The $0.12 per share increase for each installment was distributed from capital contribution reserves (Additional paid-in capital), a subaccount of legal reserves, and transferred to free reserves (Retained earnings) for payment, while the existing $0.51 per share was distributed by way of a par value reduction.

For the three and six months ended June 30, 2014, dividends per Common Share amounted to CHF 0.58 ($0.65) and CHF 1.23 ($1.40), respectively. For the six months ended June 30, 2014, dividends included a distribution from capital contribution reserves of CHF 0.20 ($0.24). Par value reductions have been reflected as such through Common Shares in the consolidated statements of shareholders' equity and had the effect of reducing par value per Common Share to CHF 26.01 at June 30, 2014.

For the three and six months ended June 30, 2013, dividends per Common Share amounted to CHF 0.48 ($0.51) and CHF 0.94 ($1.00).

Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, grants of restricted stock, and purchases under the Employee Stock Purchase Plan (ESPP). At June 30, 2014, 6,606,823 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans.

ACE Limited securities repurchase authorization
For the three and six months ended June 30, 2014, ACE repurchased 2,306,000 and 5,793,882 Common Shares for a cost of $237 million and $569 million, respectively, in a series of open market transactions under the November 2013 Board authorization of a share repurchase program of up to $2.0 billion of ACE's Common Shares through December 31, 2014. At June 30, 2014, $1.37 billion in share repurchase authorization remained through December 31, 2014 pursuant to the Board authorization. For the period July 1, 2014 through July 29, 2014, ACE repurchased 1,281,630 Common Shares for a total of $133 million in a series of open market transactions. At July 29, 2014, $1.24 billion in share repurchase authorization remained through December 31, 2014.
Share-based compensation
Share-based compensation
Share-based compensation

The ACE Limited 2004 Long-Term Incentive Plan (the 2004 LTIP) permits grants of both incentive and non-qualified stock options principally at an option price per share equal to the grant date fair value of ACE’s Common Shares. Stock options are generally granted with a 3-year vesting period and a 10-year term. Stock options typically vest in equal annual installments over the vesting period, which is also the requisite service period. On February 27, 2014, ACE granted 1,779,074 stock options with a weighted-average grant date fair value of $18.00 each. The fair value of the options issued is estimated on the date of grant using the Black-Scholes option pricing model.

The 2004 LTIP also permits grants of restricted stock and restricted stock units. ACE generally grants restricted stock and restricted stock units with a 4-year vesting period, based on a graded vesting schedule. The restricted stock is granted at market close price on the grant date. On February 27, 2014, ACE granted 1,492,290 restricted stock awards and 276,992 restricted stock units to employees and officers with a grant date fair value of $96.76 each. Each restricted stock unit represents our obligation to deliver to the holder one Common Share upon vesting.
Segment information
Segment information
Segment information

ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business segments have established relationships with reinsurance intermediaries.

For segment reporting purposes, certain items have been presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. ACE calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. For the Insurance – North American Agriculture segment, management includes gains and losses from fair value changes on crop derivatives as a component of underwriting income. For example, for the three months ended June 30, 2014, underwriting income in our Insurance – North American Agriculture segment was $27 million. This amount includes $8 million of realized gains related to crop derivatives which are included in Net realized gains (losses) below. For the Life segment, management includes Net investment income and (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP as components of Life underwriting income. For example, for the three months ended June 30, 2014, Life underwriting income of $89 million includes Net investment income of $66 million and gains from fair value changes in separate account assets of $17 million.

The following tables present the Statement of Operations by segment:
For the Three Months Ended June 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,635

 
$
388

 
$
1,760

 
$
278

 
$
498

 
$
—

 
$
4,559

Net premiums earned
1,542

 
330

 
1,709

 
261

 
490

 
—

 
4,332

Losses and loss expenses
1,016

 
287

 
830

 
109

 
146

 
—

 
2,388

Policy benefits
—

 
—

 
—

 
—

 
144

 
—

 
144

Policy acquisition costs
152

 
23

 
402

 
60

 
121

 
—

 
758

Administrative expenses
175

 
1

 
256

 
14

 
73

 
47

 
566

Underwriting income (loss)
199

 
19

 
221

 
78

 
6

 
(47
)
 
476

Net investment income
265

 
6

 
136

 
80

 
66

 
3

 
556

Net realized gains (losses) including OTTI
(11
)
 
8

 
14

 
(15
)
 
(72
)
 
3

 
(73
)
Interest expense
2

 
—

 
1

 
2

 
3

 
64

 
72

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

 
—

 
—

 
—

 
(17
)
 
—

 
(17
)
Other
(24
)
 
9

 
8

 
(10
)
 
4

 
5

 
(8
)
Income tax expense (benefit)
91

 
5

 
55

 
10

 
12

 
(40
)
 
133

Net income (loss)
$
384

 
$
19

 
$
307

 
$
141

 
$
(2
)
 
$
(70
)
 
$
779

For the Three Months Ended June 30, 2013
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
1,529

 
$
453

 
$
1,630

 
$
292

 
$
487

 
$
—

 
$
4,391

Net premiums earned
1,428

 
351

 
1,563

 
245

 
480

 
—

 
4,067

Losses and loss expenses
950

 
293

 
768

 
93

 
145

 
1

 
2,250

Policy benefits
—

 
—

 
—

 
—

 
110

 
—

 
110

Policy acquisition costs
142

 
20

 
360

 
48

 
95

 
—

 
665

Administrative expenses
159

 
3

 
251

 
12

 
86

 
53

 
564

Underwriting income (loss)
177

 
35

 
184

 
92

 
44

 
(54
)
 
478

Net investment income
250

 
7

 
136

 
71

 
63

 
7

 
534

Net realized gains (losses) including OTTI
28

 
1

 
8

 
31

 
36

 
—

 
104

Interest expense
3

 
—

 
2

 
1

 
4

 
63

 
73

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

 
—

 
—

 
—

 
11

 
—

 
11

Other
(10
)
 
8

 
17

 
2

 
3

 
6

 
26

Income tax expense (benefit)
91

 
8

 
50

 
7

 
10

 
(51
)
 
115

Net income (loss)
$
371

 
$
27

 
$
259

 
$
184

 
$
115

 
$
(65
)
 
$
891


For the Six Months Ended June 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
3,053

 
$
582

 
$
3,531

 
$
586

 
$
992

 
$
—

 
$
8,744

Net premiums earned
3,029

 
433

 
3,321

 
545

 
974

 
—

 
8,302

Losses and loss expenses
1,956

 
413

 
1,647

 
235

 
297

 
1

 
4,549

Policy benefits
—

 
—

 
—

 
—

 
258

 
—

 
258

Policy acquisition costs
311

 
28

 
788

 
127

 
232

 
—

 
1,486

Administrative expenses
336

 
2

 
506

 
28

 
141

 
88

 
1,101

Underwriting income (loss)
426

 
(10
)
 
380

 
155

 
46

 
(89
)
 
908

Net investment income
535

 
13

 
268

 
157

 
130

 
6

 
1,109

Net realized gains (losses) including OTTI
(20
)
 
6

 
4

 
(23
)
 
(148
)
 
4

 
(177
)
Interest expense
5

 
—

 
2

 
3

 
6

 
127

 
143

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

 
—

 
—

 
—

 
(11
)
 
—

 
(11
)
Other
(44
)
 
17

 
2

 
(29
)
 
11

 
12

 
(31
)
Income tax expense (benefit)
174

 
(2
)
 
92

 
20

 
22

 
(80
)
 
226

Net income (loss)
$
806

 
$
(6
)
 
$
556

 
$
295

 
$
—

 
$
(138
)
 
$
1,513


For the Six Months Ended June 30, 2013
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
2,813

 
$
566

 
$
3,250

 
$
571

 
$
989

 
$
—

 
$
8,189

Net premiums earned
2,766

 
403

 
3,022

 
492

 
957

 
—

 
7,640

Losses and loss expenses
1,828

 
325

 
1,515

 
199

 
302

 
7

 
4,176

Policy benefits
—

 
—

 
—

 
—

 
241

 
—

 
241

Policy acquisition costs
285

 
24

 
699

 
96

 
175

 
—

 
1,279

Administrative expenses
284

 
8

 
487

 
24

 
171

 
104

 
1,078

Underwriting income (loss)
369

 
46

 
321

 
173

 
68

 
(111
)
 
866

Net investment income
501

 
13

 
268

 
143

 
126

 
14

 
1,065

Net realized gains (losses) including OTTI
54

 
1

 
42

 
51

 
163

 
(1
)
 
310

Interest expense
1

 
—

 
3

 
2

 
8

 
119

 
133

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

 
—

 
—

 
—

 
7

 
—

 
7

Other
(25
)
 
16

 
16

 
(6
)
 
3

 
16

 
20

Income tax expense (benefit)
185

 
10

 
96

 
15

 
23

 
(92
)
 
237

Net income (loss)
$
763

 
$
34

 
$
516

 
$
356

 
$
316

 
$
(141
)
 
$
1,844


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

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

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Three Months Ended June 30, 2014
 
 
 
Insurance – North American P&C
$
423

 
$
1,018

 
$
101

 
$
1,542

Insurance – North American Agriculture
330

 
—

 
—

 
330

Insurance – Overseas General
727

 
395

 
587

 
1,709

Global Reinsurance
132

 
129

 
—

 
261

Life
—

 
—

 
490

 
490

 
$
1,612

 
$
1,542

 
$
1,178

 
$
4,332

For the Three Months Ended June 30, 2013
 
 
 
 
 
 
 
Insurance – North American P&C
$
368

 
$
967

 
$
93

 
$
1,428

Insurance – North American Agriculture
351

 
—

 
—

 
351

Insurance – Overseas General
658

 
374

 
531

 
1,563

Global Reinsurance
132

 
113

 
—

 
245

Life
—

 
—

 
480

 
480

 
$
1,509

 
$
1,454

 
$
1,104

 
$
4,067

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

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Six Months Ended June 30, 2014
 
 
 
Insurance – North American P&C
$
828

 
$
1,999

 
$
202

 
$
3,029

Insurance – North American Agriculture
433

 
—

 
—

 
433

Insurance – Overseas General
1,420

 
764

 
1,137

 
3,321

Global Reinsurance
286

 
259

 
—

 
545

Life
—

 
—

 
974

 
974

 
$
2,967

 
$
3,022

 
$
2,313

 
$
8,302

For the Six Months Ended June 30, 2013
 
 
 
 
 
 
 
Insurance – North American P&C
$
715

 
$
1,869

 
$
182

 
$
2,766

Insurance – North American Agriculture
403

 
—

 
—

 
403

Insurance – Overseas General
1,243

 
713

 
1,066

 
3,022

Global Reinsurance
267

 
225

 
—

 
492

Life
—

 
—

 
957

 
957

 
$
2,628

 
$
2,807

 
$
2,205

 
$
7,640

Earnings per share
Earnings per share
Earnings per share

 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars, except share and per share data)
2014

 
2013

 
2014

 
2013

Numerator:
 
 
 
 
 
 
 
Net income
$
779

 
$
891

 
$
1,513

 
$
1,844

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share:
 
 
 
 
 
 
 
Weighted-average shares outstanding
337,846,228

 
341,047,290

 
338,353,260

 
340,913,450

Denominator for diluted earnings per share:
 
 
 
 

 

Share-based compensation plans
3,286,359

 
3,053,975

 
3,267,499

 
3,120,263

Weighted-average shares outstanding and assumed conversions
341,132,587

 
344,101,265

 
341,620,759

 
344,033,713

Basic earnings per share
$
2.30

 
$
2.61

 
$
4.47

 
$
5.41

Diluted earnings per share
$
2.28

 
$
2.59

 
$
4.43

 
$
5.36

 
 
 
 
 
 
 
 
Potential anti-dilutive share conversions
1,778,040

 
1,811,030

 
1,220,731

 
1,231,105



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

The following tables present condensed consolidating financial information at June 30, 2014 and December 31, 2013, and for the three and six months ended June 30, 2014 and 2013 for ACE Limited (Parent Guarantor) and ACE INA Holdings Inc. (Subsidiary Issuer). The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor. The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer.
 
During the third quarter of 2013, we determined that the Subsidiary Issuer columns presented in the previously issued condensed consolidating financial information should be presented on the equity method of accounting rather than on a consolidated basis. Accordingly, we have revised the disclosure to correct the Condensed Consolidating Statement of Operations and Comprehensive Income for the three and six months ended June 30, 2013 and the Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2013. As a result of this revision to the Subsidiary Issuer condensed consolidating financial information, revenues and expenses and cash flows of the subsidiaries of ACE INA Holdings Inc. (Subsidiary Issuer) are now presented in the Other ACE Limited Subsidiaries column on a combined basis. In addition, we revised the Consolidating Adjustments and Eliminations column to correctly include all intercompany eliminations. Previously, this column reflected only ACE Limited parent company intercompany eliminations. We also revised the Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2013 to correct the presentation of negative cash associated with our affiliated notional cash pooling programs (Pools). In addition, certain items in the Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2013 have been reclassified to conform to current period presentation. Also, the operating cash flows have been corrected to properly reflect certain intercompany transactions previously recorded in financing cash flows for the six months ended June 30, 2013.

Total shareholders' equity and net income of the Subsidiary Issuer and Parent Guarantor were not impacted as a result of these revisions. The impact of the revisions was not material to the prior period consolidated financial statements taken as a whole. There was no impact on the consolidated amounts previously reported.


Condensed Consolidating Balance Sheet at June 30, 2014
(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
33

 
$
11

 
$
63,576

 
$
—

 
$
63,620

Cash(1)
44

 
1

 
1,026

 
(477
)
 
594

Insurance and reinsurance balances receivable
—

 
—

 
6,169

 
(853
)
 
5,316

Reinsurance recoverable on losses and loss expenses
—

 
—

 
19,609

 
(8,841
)
 
10,768

Reinsurance recoverable on policy benefits
—

 
—

 
1,260

 
(1,026
)
 
234

Value of business acquired
—

 
—

 
514

 
—

 
514

Goodwill and other intangible assets
—

 
—

 
5,522

 
—

 
5,522

Investments in subsidiaries
30,207

 
18,946

 
—

 
(49,153
)
 
—

Due from subsidiaries and affiliates, net
305

 
—

 
—

 
(305
)
 
—

Other assets
4

 
295

 
14,300

 
(3,720
)
 
10,879

Total assets
$
30,593

 
$
19,253

 
$
111,976

 
$
(64,375
)
 
$
97,447

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$
—

 
$
—

 
$
45,589

 
$
(8,412
)
 
$
37,177

Unearned premiums
—

 
—

 
10,154

 
(1,858
)
 
8,296

Future policy benefits
—

 
—

 
5,804

 
(1,026
)
 
4,778

Due to (from) subsidiaries and affiliates, net
—

 
78

 
227

 
(305
)
 
—

Affiliated notional cash pooling programs(1)
—

 
477

 
—

 
(477
)
 
—

Short-term debt
—

 
450

 
1,401

 
—

 
1,851

Long-term debt
—

 
4,045

 
12

 
—

 
4,057

Trust preferred securities
—

 
309

 
—

 
—

 
309

Other liabilities
268

 
1,418

 
12,112

 
(3,144
)
 
10,654

Total liabilities
268

 
6,777

 
75,299

 
(15,222
)
 
67,122

Total shareholders’ equity
30,325

 
12,476

 
36,677

 
(49,153
)
 
30,325

Total liabilities and shareholders’ equity
$
30,593

 
$
19,253

 
$
111,976

 
$
(64,375
)
 
$
97,447


(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
 




Condensed Consolidating Balance Sheet at December 31, 2013

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
32

 
$
10

 
$
60,886

 
$
—

 
$
60,928

Cash(1)
—

 
16

 
748

 
(185
)
 
579

Insurance and reinsurance balances receivable
—

 
—

 
5,835

 
(809
)
 
5,026

Reinsurance recoverable on losses and loss expenses
—

 
—

 
20,057

 
(8,830
)
 
11,227

Reinsurance recoverable on policy benefits
—

 
—

 
1,215

 
(997
)
 
218

Value of business acquired
—

 
—

 
536

 
—

 
536

Goodwill and other intangible assets
—

 
—

 
5,404

 
—

 
5,404

Investments in subsidiaries
28,351

 
18,105

 
—

 
(46,456
)
 
—

Due from subsidiaries and affiliates, net
844

 
—

 
—

 
(844
)
 


Other assets
5

 
258

 
13,788

 
(3,459
)
 
10,592

Total assets
$
29,232

 
$
18,389

 
$
108,469

 
$
(61,580
)
 
$
94,510

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$
—

 
$
—

 
$
45,714

 
$
(8,271
)
 
$
37,443

Unearned premiums
—

 
—

 
9,242

 
(1,703
)
 
7,539

Future policy benefits
—

 
—

 
5,612

 
(997
)
 
4,615

Due to (from) subsidiaries and affiliates, net
—

 
714

 
130

 
(844
)
 
—

Affiliated notional cash pooling programs(1)
185

 
—

 
—

 
(185
)
 
—

Short-term debt
—

 
500

 
1,401

 
—

 
1,901

Long-term debt
—

 
3,795

 
12

 
—

 
3,807

Trust preferred securities
—

 
309

 
—

 
—

 
309

Other liabilities
222

 
1,318

 
11,655

 
(3,124
)
 
10,071

Total liabilities
407

 
6,636

 
73,766

 
(15,124
)
 
65,685

Total shareholders’ equity
28,825

 
11,753

 
34,703

 
(46,456
)
 
28,825

Total liabilities and shareholders’ equity
$
29,232

 
$
18,389

 
$
108,469

 
$
(61,580
)
 
$
94,510

(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
4,559

 
$
—

 
$
4,559

Net premiums earned
—

 
—

 
4,332

 
—

 
4,332

Net investment income
1

 
1

 
554

 
—

 
556

Equity in earnings of subsidiaries
745

 
231

 
—

 
(976
)
 
—

Net realized gains (losses) including OTTI
—

 
8

 
(81
)
 
—

 
(73
)
Losses and loss expenses
—

 
—

 
2,388

 
—

 
2,388

Policy benefits
—

 
—

 
144

 
—

 
144

Policy acquisition costs and administrative expenses
22

 
8

 
1,294

 
—

 
1,324

Interest (income) expense
(9
)
 
70

 
11

 
—

 
72

Other (income) expense
(50
)
 
6

 
19

 
—

 
(25
)
Income tax expense (benefit)
4

 
(25
)
 
154

 
—

 
133

Net income
$
779

 
$
181

 
$
795

 
$
(976
)
 
$
779

Comprehensive income
$
1,348

 
$
511

 
$
1,364

 
$
(1,875
)
 
$
1,348


Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)
For the Three Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
4,391

 
$
—

 
$
4,391

Net premiums earned
—

 
—

 
4,067

 
—

 
4,067

Net investment income
1

 
1

 
532

 
—

 
534

Equity in earnings of subsidiaries
842

 
257

 
—

 
(1,099
)
 
—

Net realized gains (losses) including OTTI
—

 
—

 
104

 
—

 
104

Losses and loss expenses
—

 
—

 
2,250

 
—

 
2,250

Policy benefits
—

 
—

 
110

 
—

 
110

Policy acquisition costs and administrative expenses
12

 
5

 
1,212

 
—

 
1,229

Interest (income) expense
(8
)
 
69

 
12

 
—

 
73

Other (income) expense
(57
)
 
6

 
88

 
—

 
37

Income tax expense (benefit)
5

 
(33
)
 
143

 
—

 
115

Net income
$
891

 
$
211

 
$
888

 
$
(1,099
)
 
$
891

Comprehensive loss
$
(499
)
 
$
(533
)
 
$
(502
)
 
$
1,035

 
$
(499
)


Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)
For the Three Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments (2)

 
ACE
Limited
Consolidated

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

 
$
2,502

 
$
1,889

 
$
—

 
$
4,391

Net premiums earned
—

 
2,331

 
1,736

 
—

 
4,067

Net investment income
1

 
254

 
279

 
—

 
534

Equity in earnings of subsidiaries
842

 
—

 
—

 
(842
)
 
—

Net realized gains (losses) including OTTI
—

 
28

 
76

 
—

 
104

Losses and loss expenses
—

 
1,434

 
816

 
—

 
2,250

Policy benefits
—

 
63

 
47

 
—

 
110

Policy acquisition costs and administrative expenses
12

 
674

 
543

 
—

 
1,229

Interest (income) expense
(8
)
 
74

 
7

 
—

 
73

Other (income) expense
(57
)
 
65

 
29

 
—

 
37

Income tax expense
5

 
92

 
18

 
—

 
115

Net income
$
891

 
$
211

 
$
631

 
$
(842
)
 
$
891

Comprehensive income (loss)
$
(499
)
 
$
(533
)
 
$
1,375

 
$
(842
)
 
$
(499
)
(1) 
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2) 
Includes ACE Limited parent company eliminations.

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
8,744

 
$
—

 
$
8,744

Net premiums earned
—

 
—

 
8,302

 
—

 
8,302

Net investment income
1

 
1

 
1,107

 
—

 
1,109

Equity in earnings of subsidiaries
1,447

 
411

 
—

 
(1,858
)
 
—

Net realized gains (losses) including OTTI
—

 
7

 
(184
)
 
—

 
(177
)
Losses and loss expenses
—

 
—

 
4,549

 
—

 
4,549

Policy benefits
—

 
—

 
258

 
—

 
258

Policy acquisition costs and administrative expenses
39

 
14

 
2,534

 
—

 
2,587

Interest (income) expense
(19
)
 
141

 
21

 
—

 
143

Other (income) expense
(92
)
 
20

 
30

 
—

 
(42
)
Income tax expense (benefit)
7

 
(55
)
 
274

 
—

 
226

Net income
$
1,513

 
$
299

 
$
1,559

 
$
(1,858
)
 
$
1,513

Comprehensive income
$
2,456

 
$
777

 
$
2,502

 
$
(3,279
)
 
$
2,456

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
8,189

 
$
—

 
$
8,189

Net premiums earned
—

 
—

 
7,640

 
—

 
7,640

Net investment income
1

 
2

 
1,062

 
—

 
1,065

Equity in earnings of subsidiaries
1,756

 
445

 
—

 
(2,201
)
 
—

Net realized gains (losses) including OTTI
12

 
—

 
298

 
—

 
310

Losses and loss expenses
—

 
—

 
4,176

 
—

 
4,176

Policy benefits
—

 
—

 
241

 
—

 
241

Policy acquisition costs and administrative expenses
27

 
9

 
2,321

 
—

 
2,357

Interest (income) expense
(15
)
 
131

 
17

 
—

 
133

Other (income) expense
(95
)
 
15

 
107

 
—

 
27

Income tax expense (benefit)
8

 
(66
)
 
295

 
—

 
237

Net income
$
1,844

 
$
358

 
$
1,843

 
$
(2,201
)
 
$
1,844

Comprehensive income (loss)
$
217

 
$
(534
)
 
$
216

 
$
318

 
$
217



Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments (2)

 
ACE
Limited
Consolidated

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

 
$
4,584

 
$
3,605

 
$
—

 
$
8,189

Net premiums earned
—

 
4,337

 
3,303

 
—

 
7,640

Net investment income
1

 
502

 
562

 
—

 
1,065

Equity in earnings of subsidiaries
1,756

 
—

 
—

 
(1,756
)
 
—

Net realized gains (losses) including OTTI
12

 
38

 
260

 
—

 
310

Losses and loss expenses
—

 
2,687

 
1,489

 
—

 
4,176

Policy benefits
—

 
144

 
97

 
—

 
241

Policy acquisition costs and administrative expenses
27

 
1,300

 
1,030

 
—

 
2,357

Interest (income) expense
(15
)
 
141

 
7

 
—

 
133

Other (income) expense
(95
)
 
99

 
23

 
—

 
27

Income tax expense
8

 
148

 
81

 
—

 
237

Net income
$
1,844

 
$
358

 
$
1,398

 
$
(1,756
)
 
$
1,844

Comprehensive income (loss)
$
217

 
$
(534
)
 
$
2,290

 
$
(1,756
)
 
$
217

(1) 
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2) 
Includes ACE Limited parent company eliminations.

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
83

 
$
(7
)
 
$
2,020

 
$
—

 
$
2,096

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

 
—

 
(7,963
)
 
3

 
(7,960
)
Purchases of fixed maturities held to maturity
—

 
—

 
(129
)
 
—

 
(129
)
Purchases of equity securities
—

 
—

 
(64
)
 
—

 
(64
)
Sales of fixed maturities available for
sale
—

 
—

 
3,845

 
(3
)
 
3,842

Sales of equity securities
—

 
—

 
45

 
—

 
45

Maturities and redemptions of fixed maturities available for sale
—

 
—

 
3,163

 
—

 
3,163

Maturities and redemptions of fixed maturities held to maturity
—

 
—

 
414

 
—

 
414

Net change in short-term investments
(1
)
 
(1
)
 
(293
)
 
—

 
(295
)
Net derivative instruments settlements
—

 
(7
)
 
(178
)
 
—

 
(185
)
Acquisition of subsidiaries (net of cash acquired of $4)
—

 
—

 
(172
)
 
—

 
(172
)
Other
—

 
(3
)
 
(115
)
 
—

 
(118
)
Net cash flows used for investing activities
(1
)
 
(11
)
 
(1,447
)
 
—

 
(1,459
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(428
)
 
—

 
—

 
—

 
(428
)
Common Shares repurchased
—

 
—

 
(557
)
 
—

 
(557
)
Proceeds from issuance of long-term debt
—

 
699

 
—

 
—

 
699

Repayment of long-term debt
—

 
(500
)
 
—

 
—

 
(500
)
Proceeds from share-based compensation plans, including windfall tax benefits
—

 
—

 
75

 
—

 
75

Advances (to) from affiliates
575

 
(667
)
 
92

 
—

 
—

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
(185
)
 
477

 
—

 
(292
)
 
—

Other
—

 
(6
)
 
92

 
—

 
86

Net cash flows (used for) from financing activities
(38
)
 
3

 
(298
)
 
(292
)
 
(625
)
Effect of foreign currency rate changes on cash and cash equivalents
—

 
—

 
3

 
—

 
3

Net increase (decrease) in cash
44

 
(15
)
 
278

 
(292
)
 
15

Cash – beginning of period(1)
—

 
16

 
748

 
(185
)
 
579

Cash – end of period(1)
$
44

 
$
1

 
$
1,026

 
$
(477
)
 
$
594

(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (Revised)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
18

 
$
(38
)
 
$
1,828

 
$
—

 
$
1,808

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

 
—

 
(10,907
)
 
103

 
(10,804
)
Purchases of fixed maturities held to maturity
—

 
—

 
(299
)
 
—

 
(299
)
Purchases of equity securities
—

 
—

 
(194
)
 
—

 
(194
)
Sales of fixed maturities available for sale
—

 
—

 
5,499

 
(103
)
 
5,396

Sales of equity securities
—

 
—

 
62

 
—

 
62

Maturities and redemptions of fixed maturities available for sale
—

 
—

 
4,112

 
—

 
4,112

Maturities and redemptions of fixed maturities held to maturity
—

 
—

 
908

 
—

 
908

Net change in short-term investments
—

 
3

 
(140
)
 
—

 
(137
)
Net derivative instruments settlements
—

 
—

 
(317
)
 
—

 
(317
)
Acquisition of subsidiaries (net of cash acquired of $38)
—

 
—

 
(977
)
 
—

 
(977
)
Capital contribution
(119
)
 
(1,010
)
 
—

 
1,129

 
—

Other
—

 
—

 
(126
)
 
—

 
(126
)
Net cash flows used for investing activities
(119
)
 
(1,007
)
 
(2,379
)
 
1,129

 
(2,376
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(169
)
 
—

 
—

 
—

 
(169
)
Common Shares repurchased
—

 
—

 
(212
)
 
—

 
(212
)
Net proceeds from issuance of long-term debt
—

 
947

 
—

 
—

 
947

Advances (to) from affiliates
(352
)
 
352

 
—

 
—

 
—

Net payments to affiliated notional cash pooling programs(1)
513

 
(253
)
 
—

 
(260
)
 
—

Proceeds from exercise of options for Common Shares
6

 
—

 
56

 
—

 
62

Capital contribution
—

 
—

 
1,129

 
(1,129
)
 
—

Other
—

 
—

 
30

 
—

 
30

Net cash flows from (used for) financing activities
(2
)
 
1,046

 
1,003

 
(1,389
)
 
658

Effect of foreign currency rate changes on cash and cash equivalents
—

 
—

 
(26
)
 
—

 
(26
)
Net increase (decrease) in cash
(103
)
 
1

 
426

 
(260
)
 
64

Cash – beginning of period(1)
103

 
2

 
859

 
(349
)
 
615

Cash – end of period(1)
$
—

 
$
3

 
$
1,285

 
$
(609
)
 
$
679


(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Condensed Consolidating Statement of Cash Flows (As previously reported)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments(2)

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from operating activities
$
95

 
$
876

 
$
837

 
$
—

 
$
1,808

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

 
(6,604
)
 
(4,337
)
 
—

 
(10,941
)
Purchases of fixed maturities held to maturity
—

 
(284
)
 
(15
)
 
—

 
(299
)
Purchases of equity securities
—

 
(161
)
 
(33
)
 
—

 
(194
)
Sales of fixed maturities available for sale
—

 
3,571

 
1,825

 
—

 
5,396

Sales of equity securities
—

 
51

 
11

 
—

 
62

Maturities and redemptions of fixed maturities available for sale
—

 
1,839

 
2,273

 
—

 
4,112

Maturities and redemptions of fixed maturities held to maturity
—

 
613

 
295

 
—

 
908

Net derivative instruments settlements
—

 
10

 
(327
)
 
—

 
(317
)
Advances to affiliates
(429
)
 
—

 
—

 
429

 
—

Acquisition of subsidiaries (net of cash acquired of $38)
—

 
(977
)
 
—

 
—

 
(977
)
Capital contribution
(119
)
 
—

 
—

 
119

 
—

Other
—

 
(154
)
 
28

 
—

 
(126
)
Net cash flows used for investing activities
(548
)
 
(2,096
)
 
(280
)
 
548

 
(2,376
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(169
)
 
—

 
—

 
—

 
(169
)
Common Shares repurchased
—

 
—

 
(212
)
 
—

 
(212
)
Proceeds from issuance of long-term debt
—

 
947

 
—

 
—

 
947

Proceeds from share-based compensation plans, including windfall tax benefits
6

 
(4
)
 
60

 
—

 
62

Advances from affiliates
—

 
352

 
77

 
(429
)
 
—

Capital contribution
—

 
—

 
119

 
(119
)
 
—

Other
—

 
30

 
—

 
—

 
30

Net cash flows from (used for) financing activities
(163
)
 
1,325

 
44

 
(548
)
 
658

Effect of foreign currency rate changes on cash and cash equivalents
—

 
(37
)
 
11

 
—

 
(26
)
Net increase (decrease) in cash
(616
)
 
68

 
612

 
—

 
64

Cash – beginning of period(3)
103

 
515

 
(3
)
 
—

 
615

Cash – end of period(3)
$
(513
)
 
$
583

 
$
609

 
$
—

 
$
679

(1)
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2)
Includes ACE Limited parent company eliminations and certain consolidating adjustments.
(3)
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
General (Policies)
Basis of presentation
ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

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

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2013 Form 10-K.
Investments (Tables)
Schedule Of Amortized Cost And Fair Value Of Fixed Maturities And Related OTTI Recognized In AOCI 
June 30, 2014
Amortized
Cost

 
Gross
Unrealized
Appreciation

 
Gross
Unrealized
Depreciation

 
Fair
Value

 
OTTI Recognized
in AOCI

(in millions of U.S. dollars)
 
 
 
 
Available for sale
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
2,806

 
$
80

 
$
(17
)
 
$
2,869

 
$
—

Foreign
15,084

 
563

 
(38
)
 
15,609

 
(1
)
Corporate securities
17,085

 
981

 
(36
)
 
18,030

 
(3
)
Mortgage-backed securities
11,185

 
308

 
(75
)
 
11,418

 
(10
)
States, municipalities, and political subdivisions
3,559

 
131

 
(15
)
 
3,675

 
—

 
$
49,719

 
$
2,063

 
$
(181
)
 
$
51,601

 
$
(14
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
779

 
$
18

 
$
(2
)
 
$
795

 
$
—

Foreign
809

 
44

 
—

 
853

 
—

Corporate securities
1,828

 
101

 
—

 
1,929

 
—

Mortgage-backed securities
1,187

 
54

 
—

 
1,241

 
—

States, municipalities, and political subdivisions
1,171

 
31

 
(5
)
 
1,197

 
—

 
$
5,774

 
$
248

 
$
(7
)
 
$
6,015

 
$
—


December 31, 2013
Amortized
Cost

 
Gross
Unrealized
Appreciation

 
Gross
Unrealized
Depreciation

 
Fair
Value

 
OTTI Recognized
in AOCI

(in millions of U.S. dollars)
 
 
 
 
Available for sale
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
2,946

 
$
62

 
$
(59
)
 
$
2,949

 
$
—

Foreign
14,336

 
377

 
(122
)
 
14,591

 
—

Corporate securities
16,825

 
777

 
(132
)
 
17,470

 
(6
)
Mortgage-backed securities
10,937

 
184

 
(227
)
 
10,894

 
(34
)
States, municipalities, and political subdivisions
3,362

 
65

 
(77
)
 
3,350

 
—

 
$
48,406

 
$
1,465

 
$
(617
)
 
$
49,254

 
$
(40
)
Held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
820

 
$
16

 
$
(4
)
 
$
832

 
$
—

Foreign
864

 
33

 
—

 
897

 
—

Corporate securities
1,922

 
83

 
—

 
2,005

 
—

Mortgage-backed securities
1,341

 
39

 
(1
)
 
1,379

 
—

States, municipalities, and political subdivisions
1,151

 
16

 
(17
)
 
1,150

 
—

 
$
6,098

 
$
187

 
$
(22
)
 
$
6,263

 
$
—


Schedule Of Fixed Maturities By Contractual Maturity 
 
 
 
June 30

 
 
 
December 31

 
 
 
2014

 
 
 
2013

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

 
Fair Value

 
Amortized Cost

 
Fair Value

Available for sale
 
 
 
 
 
 
 
Due in 1 year or less
$
2,513

 
$
2,537

 
$
2,387

 
$
2,411

Due after 1 year through 5 years
15,095

 
15,692

 
14,139

 
14,602

Due after 5 years through 10 years
15,917

 
16,575

 
16,200

 
16,535

Due after 10 years
5,009

 
5,379

 
4,743

 
4,812

 
38,534

 
40,183

 
37,469

 
38,360

Mortgage-backed securities
11,185

 
11,418

 
10,937

 
10,894

 
$
49,719

 
$
51,601

 
$
48,406

 
$
49,254

Held to maturity
 
 
 
 
 
 
 
Due in 1 year or less
$
483

 
$
489

 
$
401

 
$
405

Due after 1 year through 5 years
2,590

 
2,693

 
2,284

 
2,363

Due after 5 years through 10 years
1,157

 
1,206

 
1,686

 
1,723

Due after 10 years
357

 
386

 
386

 
393

 
4,587

 
4,774

 
4,757

 
4,884

Mortgage-backed securities
1,187

 
1,241

 
1,341

 
1,379

 
$
5,774

 
$
6,015

 
$
6,098

 
$
6,263

Schedule Of Cost And Fair Value Of Equity Securities 
 
June 30


December 31

(in millions of U.S. dollars)
2014


2013

Cost
$
874

 
$
841

Gross unrealized appreciation
77

 
63

Gross unrealized depreciation
(44
)
 
(67
)
Fair value
$
907

 
$
837

Schedule Of Net Realized Gains (Losses) And The Losses Included In Net Realized Gains (Losses) And OCI 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Fixed maturities:
 
 
 
 
 
 
 
OTTI on fixed maturities, gross
$
(9
)
 
$
(6
)
 
$
(15
)
 
$
(7
)
OTTI on fixed maturities recognized in OCI (pre-tax)
1

 
—

 
2

 
—

OTTI on fixed maturities, net
(8
)
 
(6
)
 
(13
)
 
(7
)
Gross realized gains excluding OTTI
54

 
64

 
90

 
126

Gross realized losses excluding OTTI
(26
)
 
(27
)
 
(46
)
 
(52
)
Total fixed maturities
20

 
31

 
31

 
67

Equity securities:
 
 
 
 
 
 
 
OTTI on equity securities
(1
)
 
—

 
(7
)
 
(1
)
Gross realized gains excluding OTTI
2

 
8

 
4

 
10

Gross realized losses excluding OTTI
—

 
(1
)
 
(1
)
 
(3
)
Total equity securities
1

 
7

 
(4
)
 
6

OTTI on other investments
(3
)
 
(1
)
 
(3
)
 
(2
)
Foreign exchange gains (losses)
(14
)
 
(5
)
 
(23
)
 
71

Investment and embedded derivative instruments
(15
)
 
40

 
(40
)
 
58

Fair value adjustments on insurance derivative
2

 
101

 
(46
)
 
429

S&P put options and futures
(72
)
 
(68
)
 
(91
)
 
(318
)
Other derivative instruments
9

 
(1
)
 
7

 
(1
)
Other
(1
)
 
—

 
(8
)
 
—

Net realized gains (losses)
$
(73
)
 
$
104

 
$
(177
)
 
$
310

Schedule Of Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which A Portion Of OTTI Was Recognized In OCI 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Balance of credit losses related to securities still held – beginning of period
$
35

 
$
35

 
$
37

 
$
43

Additions where no OTTI was previously recorded
5

 
4

 
7

 
4

Additions where an OTTI was previously recorded
1

 
2

 
3

 
3

Reductions for securities sold during the period
(17
)
 
(1
)
 
(23
)
 
(10
)
Balance of credit losses related to securities still held – end of period
$
24

 
$
40

 
$
24

 
$
40

Schedule Of Aggregate Fair Value And Gross Unrealized Loss By Length Of Time The Security Has Continuously Been In An Unrealized Loss Position 
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
June 30, 2014
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

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

 
$
—

 
$
1,069

 
$
(19
)
 
$
1,069

 
$
(19
)
Foreign
1,274

 
(11
)
 
1,303

 
(27
)
 
2,577

 
(38
)
Corporate securities
1,118

 
(12
)
 
1,050

 
(24
)
 
2,168

 
(36
)
Mortgage-backed securities
486

 
(4
)
 
2,540

 
(71
)
 
3,026

 
(75
)
States, municipalities, and political subdivisions
366

 
(4
)
 
1,041

 
(16
)
 
1,407

 
(20
)
Total fixed maturities
3,244

 
(31
)
 
7,003

 
(157
)
 
10,247

 
(188
)
Equity securities
45

 
(2
)
 
462

 
(42
)
 
507

 
(44
)
Other investments
39

 
(1
)
 
—

 
—

 
39

 
(1
)
Total
$
3,328

 
$
(34
)
 
$
7,465

 
$
(199
)
 
$
10,793

 
$
(233
)
 
 
0 – 12 Months
 
 
Over 12 Months
 
 
Total
 
December 31, 2013
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

 
Fair Value

 
Gross
Unrealized
Loss

(in millions of U.S. dollars)
 
 
 
 
 
U.S. Treasury and agency
$
1,794

 
$
(57
)
 
$
31

 
$
(6
)
 
$
1,825

 
$
(63
)
Foreign
4,621

 
(114
)
 
201

 
(8
)
 
4,822

 
(122
)
Corporate securities
3,836

 
(118
)
 
194

 
(14
)
 
4,030

 
(132
)
Mortgage-backed securities
5,248

 
(197
)
 
384

 
(31
)
 
5,632

 
(228
)
States, municipalities, and political subdivisions
2,164

 
(90
)
 
84

 
(4
)
 
2,248

 
(94
)
Total fixed maturities
17,663

 
(576
)
 
894

 
(63
)
 
18,557

 
(639
)
Equity securities
498

 
(67
)
 
—

 
—

 
498

 
(67
)
Other investments
67

 
(9
)
 
—

 
—

 
67

 
(9
)
Total
$
18,228

 
$
(652
)
 
$
894

 
$
(63
)
 
$
19,122

 
$
(715
)
Schedule Of Components Of Restricted Assets 
 
June 30

 
December 31

(in millions of U.S. dollars)
2014

 
2013

Trust funds
$
10,554

 
$
11,315

Deposits with non-U.S. regulatory authorities
1,969

 
1,970

Assets pledged under repurchase agreements
1,451

 
1,435

Deposits with U.S. regulatory authorities
1,336

 
1,334

Other pledged assets
459

 
391

 
$
15,769

 
$
16,445

Fair value measurements (Tables)
Financial Instruments Measured At Fair Value On A Recurring Basis 
June 30, 2014
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,677

 
$
1,192

 
$
—

 
$
2,869

Foreign
216

 
15,381

 
12

 
15,609

Corporate securities
—

 
17,826

 
204

 
18,030

Mortgage-backed securities
—

 
11,411

 
7

 
11,418

States, municipalities, and political subdivisions
—

 
3,675

 
—

 
3,675

 
1,893

 
49,485

 
223

 
51,601

Equity securities
414

 
491

 
2

 
907

Short-term investments
1,069

 
1,039

 
—

 
2,108

Other investments
336

 
254

 
2,640

 
3,230

Securities lending collateral
—

 
1,440

 
—

 
1,440

Investment derivative instruments
9

 
—

 
—

 
9

Other derivative instruments
16

 
2

 
—

 
18

Separate account assets
1,349

 
88

 
—

 
1,437

Total assets measured at fair value
$
5,086

 
$
52,799

 
$
2,865

 
$
60,750

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
10

 
$
—

 
$
—

 
$
10

Other derivative instruments
15

 
2

 
—

 
17

GLB(1)
—

 
—

 
241

 
241

Total liabilities measured at fair value
$
25

 
$
2

 
$
241

 
$
268

(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
 
December 31, 2013
Level 1

 
Level 2

 
Level 3

 
Total

(in millions of U.S. dollars)
 
 
 
Assets:
 
 
 
 
 
 
 
Fixed maturities available for sale
 
 
 
 
 
 
 
U.S. Treasury and agency
$
1,626

 
$
1,323

 
$
—

 
$
2,949

Foreign
223

 
14,324

 
44

 
14,591

Corporate securities
—

 
17,304

 
166

 
17,470

Mortgage-backed securities
—

 
10,886

 
8

 
10,894

States, municipalities, and political subdivisions
—

 
3,350

 
—

 
3,350

 
1,849

 
47,187

 
218

 
49,254

Equity securities
373

 
460

 
4

 
837

Short-term investments
953

 
803

 
7

 
1,763

Other investments
305

 
231

 
2,440

 
2,976

Securities lending collateral
—

 
1,632

 
—

 
1,632

Investment derivative instruments
19

 
—

 
—

 
19

Other derivative instruments
—

 
6

 
—

 
6

Separate account assets
1,145

 
81

 
—

 
1,226

Total assets measured at fair value
$
4,644

 
$
50,400

 
$
2,669

 
$
57,713

Liabilities:
 
 
 
 
 
 
 
Investment derivative instruments
$
6

 
$
—

 
$
—

 
$
6

Other derivative instruments
60

 
2

 
—

 
62

GLB(1)
—

 
—

 
193

 
193

Total liabilities measured at fair value
$
66

 
$
2

 
$
193

 
$
261

(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
Schedule Of Fair Value Transfers Between Level 1 and Level 2 [Table Text Block] 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Transfers from Level 1 to Level 2
$
—

 
$
6

 
$
—

 
$
19

Transfers from Level 2 to Level 1
—

 
—

 
—

 
—

Fair Value And Maximum Future Funding Commitments Related To Investments 
 
 
 
 
 
June 30

 
 
 
December 31

 
Expected
Liquidation
Period of Underlying Assets
 
 
 
2014

 
 
 
2013

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

 
Maximum
Future Funding
Commitments

 
Fair
Value

 
Maximum
Future Funding
Commitments

Financial
5 to 9 Years
 
$
274

 
$
119

 
$
256

 
$
129

Real estate
3 to 9 Years
 
322

 
63

 
322

 
92

Distressed
6 to 9 Years
 
265

 
145

 
180

 
230

Mezzanine
6 to 9 Years
 
303

 
222

 
276

 
252

Traditional
3 to 8 Years
 
923

 
448

 
813

 
456

Vintage
1 to 3 Years
 
11

 
—

 
13

 
—

Investment funds
Not Applicable
 
385

 
—

 
428

 
—

 
 
 
$
2,483

 
$
997

 
$
2,288

 
$
1,159

Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations 
(in millions of U.S. dollars, except for percentages)
Fair Value
 
Valuation
Technique
 
Significant
Unobservable Inputs
 
Ranges
June 30, 2014

 
December 31, 2013

 
 
 
GLB(1)
$
241

 
$
193

 
Actuarial model
 
Lapse rate
 
1% – 30%
 
 
 
 
 
 
 
Annuitization rate
 
0% – 55%
(1) 
Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.
Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs 
 
Assets
 
 
Liabilities

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

 
Other
investments

 
GLB(1)

June 30, 2014
Foreign

 
Corporate
securities

 
MBS

 
 
(in millions of U.S. dollars)
 
 
 
 
Balance–Beginning of Period
$
26

 
$
151

 
$
8

 
$
2

 
$
2,611

 
$
243

Transfers into Level 3
2

 
26

 
—

 
—

 
—

 
—

Transfers out of Level 3
(16
)
 
—

 
—

 
—

 
—

 
—

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

 
2

 
—

 
—

 
7

 
—

Net Realized Gains/Losses
1

 
—

 
—

 
—

 
(3
)
 
(2
)
Purchases
—

 
30

 
—

 
—

 
152

 
—

Sales
(1
)
 
(2
)
 
—

 
—

 
(2
)
 
—

Settlements
—

 
(3
)
 
(1
)
 
—

 
(125
)
 
—

Balance–End of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
2,640

 
$
241

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

 
$
—

 
$
—

 
$
—

 
$
(3
)
 
$
(2
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.
  
Assets
 
 
Liabilities

 
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Short-term investments

 
Other
investments

 
GLB(1)

Three Months Ended
Foreign

 
Corporate
securities

 
MBS

 
 
 
June 30, 2013
 
 
 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
35

 
$
118

 
$
13

 
$
2

 
$
—

 
$
2,328

 
$
753

Transfers into Level 3
29

 
5

 
—

 
7

 
7

 
—

 
—

Transfers out of Level 3
(14
)
 
(27
)
 
—

 
—

 
—

 
—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(4
)
 
(1
)
 
—

 
(5
)
 
—

 
13

 
—

Net Realized Gains/Losses
—

 
(1
)
 
—

 
4

 
—

 
(1
)
 
(101
)
Purchases
3

 
23

 
—

 
1

 
2

 
113

 
—

Sales
(1
)
 
—

 
(3
)
 
(5
)
 
—

 
—

 
—

Settlements
—

 
(3
)
 
(1
)
 
—

 
—

 
(104
)
 
—

Balance–End of Period
$
48

 
$
114

 
$
9

 
$
4

 
$
9

 
$
2,349

 
$
652

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

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
(101
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.0 billion at March 31, 2013, which includes a fair value derivative adjustment of $652 million and $753 million, respectively.

 
Assets
 
 
Liabilities

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

 
Short-term investments

 
Other
investments

 
GLB(1)

June 30, 2014
Foreign

 
Corporate
securities

 
MBS

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

 
$
166

 
$
8

 
$
4

 
$
7

 
$
2,440

 
$
193

Transfers into Level 3
2

 
30

 
—

 
—

 
—

 
—

 
—

Transfers out of Level 3
(34
)
 
(22
)
 
—

 
(2
)
 
(7
)
 
—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(1
)
 
2

 
—

 
1

 
—

 
48

 
—

Net Realized Gains/Losses
1

 
—

 
—

 
—

 
—

 
(3
)
 
48

Purchases
2

 
45

 
—

 
1

 
—

 
352

 
—

Sales
(2
)
 
(8
)
 
—

 
(2
)
 
—

 
(3
)
 
—

Settlements
—

 
(9
)
 
(1
)
 
—

 
—

 
(194
)
 
—

Balance–End of Period
$
12

 
$
204

 
$
7

 
$
2

 
$
—

 
$
2,640

 
$
241

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

 
$
—

 
$
—

 
$
—

 
$
—

 
$
(3
)
 
$
48

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

  
Assets
 
 
Liabilities

 
Available-for-Sale Debt Securities
 
 
Equity
securities

 
Short-term investments

Other
investments

 
GLB(1)

Six Months Ended
Foreign

 
Corporate
securities

 
MBS

 
 
 
June 30, 2013
 
 
 
 
 
(in millions of U.S. dollars)
 
 
 
 
 
Balance–Beginning of Period
$
60

 
$
102

 
$
13

 
$
3

 
$
—

$
2,252

 
$
1,119

Transfers into Level 3
32

 
17

 
—

 
7

 
7

—

 
—

Transfers out of Level 3
(41
)
 
(29
)
 
—

 
(1
)
 
—

—

 
—

Change in Net Unrealized Gains (Losses) included in OCI
(4
)
 
—

 
—

 
(5
)
 
—

35

 
—

Net Realized Gains/Losses
1

 
(1
)
 
—

 
4

 
—

(2
)
 
(467
)
Purchases
3

 
33

 
—

 
1

 
2

249

 
—

Sales
(2
)
 
—

 
(3
)
 
(5
)
 
—

(9
)
 
—

Settlements
(1
)
 
(8
)
 
(1
)
 
—

 
—

(176
)
 
—

Balance–End of Period
$
48

 
$
114

 
$
9

 
$
4

 
$
9

$
2,349

 
$
652

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

 
$
—

 
$
—

 
$
—

 
$
—

$
(2
)
 
$
(467
)
(1) 
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.4 billion at December 31, 2012, which includes a fair value derivative adjustment of $652 million and $1.1 billion, respectively.

Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value 
June 30, 2014
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
601

 
$
194

 
$
—

 
$
795

 
$
779

Foreign
—

 
853

 
—

 
853

 
809

Corporate securities
—

 
1,914

 
15

 
1,929

 
1,828

Mortgage-backed securities
—

 
1,241

 
—

 
1,241

 
1,187

States, municipalities, and political subdivisions
—

 
1,197

 
—

 
1,197

 
1,171

 
601

 
5,399

 
15

 
6,015

 
5,774

Partially-owned insurance companies
—

 
—

 
470

 
470

 
470

Total assets
$
601

 
$
5,399

 
$
485

 
$
6,485

 
$
6,244

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
—

 
$
1,870

 
$
—

 
$
1,870

 
$
1,851

Long-term debt
—

 
4,392

 
—

 
4,392

 
4,057

Trust preferred securities
—

 
456

 
—

 
456

 
309

Total liabilities
$
—

 
$
6,718

 
$
—

 
$
6,718

 
$
6,217


December 31, 2013
Fair Value
 
 
Carrying Value

(in millions of U.S. dollars)
Level 1

 
Level 2

 
Level 3

 
Total

 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities held to maturity
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
$
596

 
$
236

 
$
—

 
$
832

 
$
820

Foreign
—

 
897

 
—

 
897

 
864

Corporate securities
—

 
1,990

 
15

 
2,005

 
1,922

Mortgage-backed securities
—

 
1,379

 
—

 
1,379

 
1,341

States, municipalities, and political subdivisions
—

 
1,150

 
—

 
1,150

 
1,151

 
596

 
5,652

 
15

 
6,263

 
6,098

Partially-owned insurance companies
—

 
—

 
470

 
470

 
470

Total assets
$
596

 
$
5,652

 
$
485

 
$
6,733

 
$
6,568

Liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
—

 
$
1,913

 
$
—

 
$
1,913

 
$
1,901

Long-term debt
—

 
4,088

 
—

 
4,088

 
3,807

Trust preferred securities
—

 
438

 
—

 
438

 
309

Total liabilities
$
—

 
$
6,439

 
$
—

 
$
6,439

 
$
6,017

Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts (Tables)
Schedule Of Guaranteed Minimum Death Benefits And Guaranteed Minimum Income Benefits Income And Expense
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

GMDB
 
 
 
 
 
 
 
Net premiums earned
$
18

 
$
20

 
$
37

 
$
40

Policy benefits and other reserve adjustments
$
13

 
$
25

 
$
28

 
$
44

GLB
 
 
 
 
 
 
 
Net premiums earned
$
34

 
$
37

 
$
70

 
$
76

Policy benefits and other reserve adjustments
10

 
2

 
19

 
11

Net realized gains (losses)
2

 
101

 
(48
)
 
470

Gain recognized in income
$
26

 
$
136

 
$
3

 
$
535

Net cash received
$
29

 
$
31

 
$
62

 
$
63

Net (increase) decrease in liability
$
(3
)
 
$
105

 
$
(59
)
 
$
472

Commitments, contingencies, and guarantees (Tables)
Balance Sheet Locations, Fair Values In An Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments 
 
 
 
 
 
June 30, 2014
 
 
 
 
December 31, 2013
 
 
Consolidated
Balance Sheet
Location
 
Fair Value
 
 
Notional
Value/
Payment
Provision

 
Fair Value
 
 
Notional
Value/
Payment
Provision

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

 
Derivative (Liability)

 
 
Derivative Asset

 
Derivative (Liability)

 
Investment and embedded derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
OA / (AP)
 
$
2

 
$
(4
)
 
$
1,296

 
$
3

 
$
(4
)
 
$
1,202

Cross-currency swaps
OA / (AP)
 
—

 
—

 
95

 
—

 
—

 
50

Options/Futures contracts on money market instruments
OA / (AP)
 
2

 
—

 
1,432

 
3

 
—

 
3,910

Futures contracts on notes and bonds
OA / (AP)
 
5

 
(6
)
 
1,372

 
13

 
(2
)
 
871

Convertible securities(1)
FM AFS / ES
 
333

 
—

 
280

 
302

 
—

 
254

 
 
 
$
342

 
$
(10
)
 
$
4,475

 
$
321

 
$
(6
)
 
$
6,287

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

 
$
(15
)
 
$
1,468

 
$
—

 
$
(60
)
 
$
1,692

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

 
—

 
250

 
6

 
—

 
250

Other
OA / (AP)
 
16

 
(2
)
 
72

 
—

 
(2
)
 
8

 
 
 
$
18

 
$
(17
)
 
$
1,790

 
$
6

 
$
(62
)
 
$
1,950

GLB(3)
(AP) / (FPB)
 
$
—

 
$
(486
)
 
$
315

 
$
—

 
$
(427
)
 
$
277


(1) 
Includes fair value of embedded derivatives.
(2) 
Related to GMDB and GLB blocks of business.
(3) 
Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.
Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations 
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars)
2014

 
2013

 
2014

 
2013

Investment and embedded derivative instruments
 
 
 
 
 
 
 
Foreign currency forward contracts
$
(1
)
 
$
12

 
$
(4
)
 
$
17

All other futures contracts and options
(18
)
 
33

 
(40
)
 
40

Convertible securities(1)
4

 
(5
)
 
4

 
1

Total investment and embedded derivative instruments
$
(15
)
 
$
40

 
$
(40
)
 
$
58

GLB and other derivative instruments
 
 
 
 
 
 
 
GLB(2)
$
2

 
$
101

 
$
(46
)
 
$
429

Futures contracts on equities(3)
(71
)
 
(66
)
 
(88
)
 
(303
)
Options on equity market indices(3)
(1
)
 
(2
)
 
(3
)
 
(15
)
Other
9

 
(1
)
 
7

 
(1
)
Total GLB and other derivative instruments
$
(61
)
 
$
32

 
$
(130
)
 
$
110

 
$
(76
)
 
$
72

 
$
(170
)
 
$
168

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

Segment information (Tables)
Operations By Segment 
For the Three Months Ended June 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
Net premiums written
$
1,635

 
$
388

 
$
1,760

 
$
278

 
$
498

 
$
—

 
$
4,559

Net premiums earned
1,542

 
330

 
1,709

 
261

 
490

 
—

 
4,332

Losses and loss expenses
1,016

 
287

 
830

 
109

 
146

 
—

 
2,388

Policy benefits
—

 
—

 
—

 
—

 
144

 
—

 
144

Policy acquisition costs
152

 
23

 
402

 
60

 
121

 
—

 
758

Administrative expenses
175

 
1

 
256

 
14

 
73

 
47

 
566

Underwriting income (loss)
199

 
19

 
221

 
78

 
6

 
(47
)
 
476

Net investment income
265

 
6

 
136

 
80

 
66

 
3

 
556

Net realized gains (losses) including OTTI
(11
)
 
8

 
14

 
(15
)
 
(72
)
 
3

 
(73
)
Interest expense
2

 
—

 
1

 
2

 
3

 
64

 
72

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

 
—

 
—

 
—

 
(17
)
 
—

 
(17
)
Other
(24
)
 
9

 
8

 
(10
)
 
4

 
5

 
(8
)
Income tax expense (benefit)
91

 
5

 
55

 
10

 
12

 
(40
)
 
133

Net income (loss)
$
384

 
$
19

 
$
307

 
$
141

 
$
(2
)
 
$
(70
)
 
$
779

For the Three Months Ended June 30, 2013
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
1,529

 
$
453

 
$
1,630

 
$
292

 
$
487

 
$
—

 
$
4,391

Net premiums earned
1,428

 
351

 
1,563

 
245

 
480

 
—

 
4,067

Losses and loss expenses
950

 
293

 
768

 
93

 
145

 
1

 
2,250

Policy benefits
—

 
—

 
—

 
—

 
110

 
—

 
110

Policy acquisition costs
142

 
20

 
360

 
48

 
95

 
—

 
665

Administrative expenses
159

 
3

 
251

 
12

 
86

 
53

 
564

Underwriting income (loss)
177

 
35

 
184

 
92

 
44

 
(54
)
 
478

Net investment income
250

 
7

 
136

 
71

 
63

 
7

 
534

Net realized gains (losses) including OTTI
28

 
1

 
8

 
31

 
36

 
—

 
104

Interest expense
3

 
—

 
2

 
1

 
4

 
63

 
73

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

 
—

 
—

 
—

 
11

 
—

 
11

Other
(10
)
 
8

 
17

 
2

 
3

 
6

 
26

Income tax expense (benefit)
91

 
8

 
50

 
7

 
10

 
(51
)
 
115

Net income (loss)
$
371

 
$
27

 
$
259

 
$
184

 
$
115

 
$
(65
)
 
$
891


For the Six Months Ended June 30, 2014
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
3,053

 
$
582

 
$
3,531

 
$
586

 
$
992

 
$
—

 
$
8,744

Net premiums earned
3,029

 
433

 
3,321

 
545

 
974

 
—

 
8,302

Losses and loss expenses
1,956

 
413

 
1,647

 
235

 
297

 
1

 
4,549

Policy benefits
—

 
—

 
—

 
—

 
258

 
—

 
258

Policy acquisition costs
311

 
28

 
788

 
127

 
232

 
—

 
1,486

Administrative expenses
336

 
2

 
506

 
28

 
141

 
88

 
1,101

Underwriting income (loss)
426

 
(10
)
 
380

 
155

 
46

 
(89
)
 
908

Net investment income
535

 
13

 
268

 
157

 
130

 
6

 
1,109

Net realized gains (losses) including OTTI
(20
)
 
6

 
4

 
(23
)
 
(148
)
 
4

 
(177
)
Interest expense
5

 
—

 
2

 
3

 
6

 
127

 
143

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

 
—

 
—

 
—

 
(11
)
 
—

 
(11
)
Other
(44
)
 
17

 
2

 
(29
)
 
11

 
12

 
(31
)
Income tax expense (benefit)
174

 
(2
)
 
92

 
20

 
22

 
(80
)
 
226

Net income (loss)
$
806

 
$
(6
)
 
$
556

 
$
295

 
$
—

 
$
(138
)
 
$
1,513


For the Six Months Ended June 30, 2013
Insurance – North American P&C

 
Insurance – North American Agriculture

 
Insurance –
Overseas
General

 
Global
Reinsurance

 
Life

 
Corporate

 
ACE
Consolidated

(in millions of U.S. dollars)
 
 
 
 
 
 
Net premiums written
$
2,813

 
$
566

 
$
3,250

 
$
571

 
$
989

 
$
—

 
$
8,189

Net premiums earned
2,766

 
403

 
3,022

 
492

 
957

 
—

 
7,640

Losses and loss expenses
1,828

 
325

 
1,515

 
199

 
302

 
7

 
4,176

Policy benefits
—

 
—

 
—

 
—

 
241

 
—

 
241

Policy acquisition costs
285

 
24

 
699

 
96

 
175

 
—

 
1,279

Administrative expenses
284

 
8

 
487

 
24

 
171

 
104

 
1,078

Underwriting income (loss)
369

 
46

 
321

 
173

 
68

 
(111
)
 
866

Net investment income
501

 
13

 
268

 
143

 
126

 
14

 
1,065

Net realized gains (losses) including OTTI
54

 
1

 
42

 
51

 
163

 
(1
)
 
310

Interest expense
1

 
—

 
3

 
2

 
8

 
119

 
133

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

 
—

 
—

 
—

 
7

 
—

 
7

Other
(25
)
 
16

 
16

 
(6
)
 
3

 
16

 
20

Income tax expense (benefit)
185

 
10

 
96

 
15

 
23

 
(92
)
 
237

Net income (loss)
$
763

 
$
34

 
$
516

 
$
356

 
$
316

 
$
(141
)
 
$
1,844


Net Premiums Earned For Segment By Product 
(in millions of U.S. dollars)
Property &
All Other

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Three Months Ended June 30, 2014
 
 
 
Insurance – North American P&C
$
423

 
$
1,018

 
$
101

 
$
1,542

Insurance – North American Agriculture
330

 
—

 
—

 
330

Insurance – Overseas General
727

 
395

 
587

 
1,709

Global Reinsurance
132

 
129

 
—

 
261

Life
—

 
—

 
490

 
490

 
$
1,612

 
$
1,542

 
$
1,178

 
$
4,332

For the Three Months Ended June 30, 2013
 
 
 
 
 
 
 
Insurance – North American P&C
$
368

 
$
967

 
$
93

 
$
1,428

Insurance – North American Agriculture
351

 
—

 
—

 
351

Insurance – Overseas General
658

 
374

 
531

 
1,563

Global Reinsurance
132

 
113

 
—

 
245

Life
—

 
—

 
480

 
480

 
$
1,509

 
$
1,454

 
$
1,104

 
$
4,067

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

 
Casualty

 
Life,
Accident &
Health

 
ACE
Consolidated

For the Six Months Ended June 30, 2014
 
 
 
Insurance – North American P&C
$
828

 
$
1,999

 
$
202

 
$
3,029

Insurance – North American Agriculture
433

 
—

 
—

 
433

Insurance – Overseas General
1,420

 
764

 
1,137

 
3,321

Global Reinsurance
286

 
259

 
—

 
545

Life
—

 
—

 
974

 
974

 
$
2,967

 
$
3,022

 
$
2,313

 
$
8,302

For the Six Months Ended June 30, 2013
 
 
 
 
 
 
 
Insurance – North American P&C
$
715

 
$
1,869

 
$
182

 
$
2,766

Insurance – North American Agriculture
403

 
—

 
—

 
403

Insurance – Overseas General
1,243

 
713

 
1,066

 
3,022

Global Reinsurance
267

 
225

 
—

 
492

Life
—

 
—

 
957

 
957

 
$
2,628

 
$
2,807

 
$
2,205

 
$
7,640

Earnings per share (Tables)
Schedule Of Earnings Per Share, Basic And Diluted
 
Three Months Ended
 
 
Six Months Ended
 
 
June 30
 
 
June 30
 
(in millions of U.S. dollars, except share and per share data)
2014

 
2013

 
2014

 
2013

Numerator:
 
 
 
 
 
 
 
Net income
$
779

 
$
891

 
$
1,513

 
$
1,844

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share:
 
 
 
 
 
 
 
Weighted-average shares outstanding
337,846,228

 
341,047,290

 
338,353,260

 
340,913,450

Denominator for diluted earnings per share:
 
 
 
 

 

Share-based compensation plans
3,286,359

 
3,053,975

 
3,267,499

 
3,120,263

Weighted-average shares outstanding and assumed conversions
341,132,587

 
344,101,265

 
341,620,759

 
344,033,713

Basic earnings per share
$
2.30

 
$
2.61

 
$
4.47

 
$
5.41

Diluted earnings per share
$
2.28

 
$
2.59

 
$
4.43

 
$
5.36

 
 
 
 
 
 
 
 
Potential anti-dilutive share conversions
1,778,040

 
1,811,030

 
1,220,731

 
1,231,105

Information provided in connection with outstanding debt of subsidiaries (Tables)
Condensed Consolidating Balance Sheet 
Condensed Consolidating Balance Sheet at June 30, 2014
(in millions of U.S. dollars)
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
33

 
$
11

 
$
63,576

 
$
—

 
$
63,620

Cash(1)
44

 
1

 
1,026

 
(477
)
 
594

Insurance and reinsurance balances receivable
—

 
—

 
6,169

 
(853
)
 
5,316

Reinsurance recoverable on losses and loss expenses
—

 
—

 
19,609

 
(8,841
)
 
10,768

Reinsurance recoverable on policy benefits
—

 
—

 
1,260

 
(1,026
)
 
234

Value of business acquired
—

 
—

 
514

 
—

 
514

Goodwill and other intangible assets
—

 
—

 
5,522

 
—

 
5,522

Investments in subsidiaries
30,207

 
18,946

 
—

 
(49,153
)
 
—

Due from subsidiaries and affiliates, net
305

 
—

 
—

 
(305
)
 
—

Other assets
4

 
295

 
14,300

 
(3,720
)
 
10,879

Total assets
$
30,593

 
$
19,253

 
$
111,976

 
$
(64,375
)
 
$
97,447

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$
—

 
$
—

 
$
45,589

 
$
(8,412
)
 
$
37,177

Unearned premiums
—

 
—

 
10,154

 
(1,858
)
 
8,296

Future policy benefits
—

 
—

 
5,804

 
(1,026
)
 
4,778

Due to (from) subsidiaries and affiliates, net
—

 
78

 
227

 
(305
)
 
—

Affiliated notional cash pooling programs(1)
—

 
477

 
—

 
(477
)
 
—

Short-term debt
—

 
450

 
1,401

 
—

 
1,851

Long-term debt
—

 
4,045

 
12

 
—

 
4,057

Trust preferred securities
—

 
309

 
—

 
—

 
309

Other liabilities
268

 
1,418

 
12,112

 
(3,144
)
 
10,654

Total liabilities
268

 
6,777

 
75,299

 
(15,222
)
 
67,122

Total shareholders’ equity
30,325

 
12,476

 
36,677

 
(49,153
)
 
30,325

Total liabilities and shareholders’ equity
$
30,593

 
$
19,253

 
$
111,976

 
$
(64,375
)
 
$
97,447


(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
 




Condensed Consolidating Balance Sheet at December 31, 2013

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE Limited
Consolidated

Assets
 
 
 
 
 
 
 
 
 
Investments
$
32

 
$
10

 
$
60,886

 
$
—

 
$
60,928

Cash(1)
—

 
16

 
748

 
(185
)
 
579

Insurance and reinsurance balances receivable
—

 
—

 
5,835

 
(809
)
 
5,026

Reinsurance recoverable on losses and loss expenses
—

 
—

 
20,057

 
(8,830
)
 
11,227

Reinsurance recoverable on policy benefits
—

 
—

 
1,215

 
(997
)
 
218

Value of business acquired
—

 
—

 
536

 
—

 
536

Goodwill and other intangible assets
—

 
—

 
5,404

 
—

 
5,404

Investments in subsidiaries
28,351

 
18,105

 
—

 
(46,456
)
 
—

Due from subsidiaries and affiliates, net
844

 
—

 
—

 
(844
)
 


Other assets
5

 
258

 
13,788

 
(3,459
)
 
10,592

Total assets
$
29,232

 
$
18,389

 
$
108,469

 
$
(61,580
)
 
$
94,510

Liabilities
 
 
 
 
 
 
 
 
 
Unpaid losses and loss expenses
$
—

 
$
—

 
$
45,714

 
$
(8,271
)
 
$
37,443

Unearned premiums
—

 
—

 
9,242

 
(1,703
)
 
7,539

Future policy benefits
—

 
—

 
5,612

 
(997
)
 
4,615

Due to (from) subsidiaries and affiliates, net
—

 
714

 
130

 
(844
)
 
—

Affiliated notional cash pooling programs(1)
185

 
—

 
—

 
(185
)
 
—

Short-term debt
—

 
500

 
1,401

 
—

 
1,901

Long-term debt
—

 
3,795

 
12

 
—

 
3,807

Trust preferred securities
—

 
309

 
—

 
—

 
309

Other liabilities
222

 
1,318

 
11,655

 
(3,124
)
 
10,071

Total liabilities
407

 
6,636

 
73,766

 
(15,124
)
 
65,685

Total shareholders’ equity
28,825

 
11,753

 
34,703

 
(46,456
)
 
28,825

Total liabilities and shareholders’ equity
$
29,232

 
$
18,389

 
$
108,469

 
$
(61,580
)
 
$
94,510

(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Condensed Consolidating Statement Of Operations and Comprehensive Income 
Condensed Consolidating Statements of Operations and Comprehensive Income
For the Three Months Ended June 30, 2014
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
4,559

 
$
—

 
$
4,559

Net premiums earned
—

 
—

 
4,332

 
—

 
4,332

Net investment income
1

 
1

 
554

 
—

 
556

Equity in earnings of subsidiaries
745

 
231

 
—

 
(976
)
 
—

Net realized gains (losses) including OTTI
—

 
8

 
(81
)
 
—

 
(73
)
Losses and loss expenses
—

 
—

 
2,388

 
—

 
2,388

Policy benefits
—

 
—

 
144

 
—

 
144

Policy acquisition costs and administrative expenses
22

 
8

 
1,294

 
—

 
1,324

Interest (income) expense
(9
)
 
70

 
11

 
—

 
72

Other (income) expense
(50
)
 
6

 
19

 
—

 
(25
)
Income tax expense (benefit)
4

 
(25
)
 
154

 
—

 
133

Net income
$
779

 
$
181

 
$
795

 
$
(976
)
 
$
779

Comprehensive income
$
1,348

 
$
511

 
$
1,364

 
$
(1,875
)
 
$
1,348


Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)
For the Three Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
4,391

 
$
—

 
$
4,391

Net premiums earned
—

 
—

 
4,067

 
—

 
4,067

Net investment income
1

 
1

 
532

 
—

 
534

Equity in earnings of subsidiaries
842

 
257

 
—

 
(1,099
)
 
—

Net realized gains (losses) including OTTI
—

 
—

 
104

 
—

 
104

Losses and loss expenses
—

 
—

 
2,250

 
—

 
2,250

Policy benefits
—

 
—

 
110

 
—

 
110

Policy acquisition costs and administrative expenses
12

 
5

 
1,212

 
—

 
1,229

Interest (income) expense
(8
)
 
69

 
12

 
—

 
73

Other (income) expense
(57
)
 
6

 
88

 
—

 
37

Income tax expense (benefit)
5

 
(33
)
 
143

 
—

 
115

Net income
$
891

 
$
211

 
$
888

 
$
(1,099
)
 
$
891

Comprehensive loss
$
(499
)
 
$
(533
)
 
$
(502
)
 
$
1,035

 
$
(499
)


Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)
For the Three Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments (2)

 
ACE
Limited
Consolidated

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

 
$
2,502

 
$
1,889

 
$
—

 
$
4,391

Net premiums earned
—

 
2,331

 
1,736

 
—

 
4,067

Net investment income
1

 
254

 
279

 
—

 
534

Equity in earnings of subsidiaries
842

 
—

 
—

 
(842
)
 
—

Net realized gains (losses) including OTTI
—

 
28

 
76

 
—

 
104

Losses and loss expenses
—

 
1,434

 
816

 
—

 
2,250

Policy benefits
—

 
63

 
47

 
—

 
110

Policy acquisition costs and administrative expenses
12

 
674

 
543

 
—

 
1,229

Interest (income) expense
(8
)
 
74

 
7

 
—

 
73

Other (income) expense
(57
)
 
65

 
29

 
—

 
37

Income tax expense
5

 
92

 
18

 
—

 
115

Net income
$
891

 
$
211

 
$
631

 
$
(842
)
 
$
891

Comprehensive income (loss)
$
(499
)
 
$
(533
)
 
$
1,375

 
$
(842
)
 
$
(499
)
(1) 
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2) 
Includes ACE Limited parent company eliminations.

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
8,744

 
$
—

 
$
8,744

Net premiums earned
—

 
—

 
8,302

 
—

 
8,302

Net investment income
1

 
1

 
1,107

 
—

 
1,109

Equity in earnings of subsidiaries
1,447

 
411

 
—

 
(1,858
)
 
—

Net realized gains (losses) including OTTI
—

 
7

 
(184
)
 
—

 
(177
)
Losses and loss expenses
—

 
—

 
4,549

 
—

 
4,549

Policy benefits
—

 
—

 
258

 
—

 
258

Policy acquisition costs and administrative expenses
39

 
14

 
2,534

 
—

 
2,587

Interest (income) expense
(19
)
 
141

 
21

 
—

 
143

Other (income) expense
(92
)
 
20

 
30

 
—

 
(42
)
Income tax expense (benefit)
7

 
(55
)
 
274

 
—

 
226

Net income
$
1,513

 
$
299

 
$
1,559

 
$
(1,858
)
 
$
1,513

Comprehensive income
$
2,456

 
$
777

 
$
2,502

 
$
(3,279
)
 
$
2,456

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

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

 
$
—

 
$
8,189

 
$
—

 
$
8,189

Net premiums earned
—

 
—

 
7,640

 
—

 
7,640

Net investment income
1

 
2

 
1,062

 
—

 
1,065

Equity in earnings of subsidiaries
1,756

 
445

 
—

 
(2,201
)
 
—

Net realized gains (losses) including OTTI
12

 
—

 
298

 
—

 
310

Losses and loss expenses
—

 
—

 
4,176

 
—

 
4,176

Policy benefits
—

 
—

 
241

 
—

 
241

Policy acquisition costs and administrative expenses
27

 
9

 
2,321

 
—

 
2,357

Interest (income) expense
(15
)
 
131

 
17

 
—

 
133

Other (income) expense
(95
)
 
15

 
107

 
—

 
27

Income tax expense (benefit)
8

 
(66
)
 
295

 
—

 
237

Net income
$
1,844

 
$
358

 
$
1,843

 
$
(2,201
)
 
$
1,844

Comprehensive income (loss)
$
217

 
$
(534
)
 
$
216

 
$
318

 
$
217



Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments (2)

 
ACE
Limited
Consolidated

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

 
$
4,584

 
$
3,605

 
$
—

 
$
8,189

Net premiums earned
—

 
4,337

 
3,303

 
—

 
7,640

Net investment income
1

 
502

 
562

 
—

 
1,065

Equity in earnings of subsidiaries
1,756

 
—

 
—

 
(1,756
)
 
—

Net realized gains (losses) including OTTI
12

 
38

 
260

 
—

 
310

Losses and loss expenses
—

 
2,687

 
1,489

 
—

 
4,176

Policy benefits
—

 
144

 
97

 
—

 
241

Policy acquisition costs and administrative expenses
27

 
1,300

 
1,030

 
—

 
2,357

Interest (income) expense
(15
)
 
141

 
7

 
—

 
133

Other (income) expense
(95
)
 
99

 
23

 
—

 
27

Income tax expense
8

 
148

 
81

 
—

 
237

Net income
$
1,844

 
$
358

 
$
1,398

 
$
(1,756
)
 
$
1,844

Comprehensive income (loss)
$
217

 
$
(534
)
 
$
2,290

 
$
(1,756
)
 
$
217

(1) 
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2) 
Includes ACE Limited parent company eliminations.

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

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
83

 
$
(7
)
 
$
2,020

 
$
—

 
$
2,096

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

 
—

 
(7,963
)
 
3

 
(7,960
)
Purchases of fixed maturities held to maturity
—

 
—

 
(129
)
 
—

 
(129
)
Purchases of equity securities
—

 
—

 
(64
)
 
—

 
(64
)
Sales of fixed maturities available for
sale
—

 
—

 
3,845

 
(3
)
 
3,842

Sales of equity securities
—

 
—

 
45

 
—

 
45

Maturities and redemptions of fixed maturities available for sale
—

 
—

 
3,163

 
—

 
3,163

Maturities and redemptions of fixed maturities held to maturity
—

 
—

 
414

 
—

 
414

Net change in short-term investments
(1
)
 
(1
)
 
(293
)
 
—

 
(295
)
Net derivative instruments settlements
—

 
(7
)
 
(178
)
 
—

 
(185
)
Acquisition of subsidiaries (net of cash acquired of $4)
—

 
—

 
(172
)
 
—

 
(172
)
Other
—

 
(3
)
 
(115
)
 
—

 
(118
)
Net cash flows used for investing activities
(1
)
 
(11
)
 
(1,447
)
 
—

 
(1,459
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(428
)
 
—

 
—

 
—

 
(428
)
Common Shares repurchased
—

 
—

 
(557
)
 
—

 
(557
)
Proceeds from issuance of long-term debt
—

 
699

 
—

 
—

 
699

Repayment of long-term debt
—

 
(500
)
 
—

 
—

 
(500
)
Proceeds from share-based compensation plans, including windfall tax benefits
—

 
—

 
75

 
—

 
75

Advances (to) from affiliates
575

 
(667
)
 
92

 
—

 
—

Net proceeds from (payments to) affiliated notional cash pooling programs(1)
(185
)
 
477

 
—

 
(292
)
 
—

Other
—

 
(6
)
 
92

 
—

 
86

Net cash flows (used for) from financing activities
(38
)
 
3

 
(298
)
 
(292
)
 
(625
)
Effect of foreign currency rate changes on cash and cash equivalents
—

 
—

 
3

 
—

 
3

Net increase (decrease) in cash
44

 
(15
)
 
278

 
(292
)
 
15

Cash – beginning of period(1)
—

 
16

 
748

 
(185
)
 
579

Cash – end of period(1)
$
44

 
$
1

 
$
1,026

 
$
(477
)
 
$
594

(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (Revised)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries

 
Consolidating
Adjustments and Eliminations

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from (used for) operating activities
$
18

 
$
(38
)
 
$
1,828

 
$
—

 
$
1,808

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

 
—

 
(10,907
)
 
103

 
(10,804
)
Purchases of fixed maturities held to maturity
—

 
—

 
(299
)
 
—

 
(299
)
Purchases of equity securities
—

 
—

 
(194
)
 
—

 
(194
)
Sales of fixed maturities available for sale
—

 
—

 
5,499

 
(103
)
 
5,396

Sales of equity securities
—

 
—

 
62

 
—

 
62

Maturities and redemptions of fixed maturities available for sale
—

 
—

 
4,112

 
—

 
4,112

Maturities and redemptions of fixed maturities held to maturity
—

 
—

 
908

 
—

 
908

Net change in short-term investments
—

 
3

 
(140
)
 
—

 
(137
)
Net derivative instruments settlements
—

 
—

 
(317
)
 
—

 
(317
)
Acquisition of subsidiaries (net of cash acquired of $38)
—

 
—

 
(977
)
 
—

 
(977
)
Capital contribution
(119
)
 
(1,010
)
 
—

 
1,129

 
—

Other
—

 
—

 
(126
)
 
—

 
(126
)
Net cash flows used for investing activities
(119
)
 
(1,007
)
 
(2,379
)
 
1,129

 
(2,376
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(169
)
 
—

 
—

 
—

 
(169
)
Common Shares repurchased
—

 
—

 
(212
)
 
—

 
(212
)
Net proceeds from issuance of long-term debt
—

 
947

 
—

 
—

 
947

Advances (to) from affiliates
(352
)
 
352

 
—

 
—

 
—

Net payments to affiliated notional cash pooling programs(1)
513

 
(253
)
 
—

 
(260
)
 
—

Proceeds from exercise of options for Common Shares
6

 
—

 
56

 
—

 
62

Capital contribution
—

 
—

 
1,129

 
(1,129
)
 
—

Other
—

 
—

 
30

 
—

 
30

Net cash flows from (used for) financing activities
(2
)
 
1,046

 
1,003

 
(1,389
)
 
658

Effect of foreign currency rate changes on cash and cash equivalents
—

 
—

 
(26
)
 
—

 
(26
)
Net increase (decrease) in cash
(103
)
 
1

 
426

 
(260
)
 
64

Cash – beginning of period(1)
103

 
2

 
859

 
(349
)
 
615

Cash – end of period(1)
$
—

 
$
3

 
$
1,285

 
$
(609
)
 
$
679


(1) 
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Condensed Consolidating Statement of Cash Flows (As previously reported)
For the Six Months Ended June 30, 2013
ACE
Limited
(Parent
Guarantor)

 
ACE INA
Holdings Inc.
(Subsidiary
Issuer)

 
Other ACE
Limited
Subsidiaries and
Eliminations(1)

 
Consolidating
Adjustments(2)

 
ACE
Limited
Consolidated

(in millions of U.S. dollars)
 
 
 
 
Net cash flows from operating activities
$
95

 
$
876

 
$
837

 
$
—

 
$
1,808

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

 
(6,604
)
 
(4,337
)
 
—

 
(10,941
)
Purchases of fixed maturities held to maturity
—

 
(284
)
 
(15
)
 
—

 
(299
)
Purchases of equity securities
—

 
(161
)
 
(33
)
 
—

 
(194
)
Sales of fixed maturities available for sale
—

 
3,571

 
1,825

 
—

 
5,396

Sales of equity securities
—

 
51

 
11

 
—

 
62

Maturities and redemptions of fixed maturities available for sale
—

 
1,839

 
2,273

 
—

 
4,112

Maturities and redemptions of fixed maturities held to maturity
—

 
613

 
295

 
—

 
908

Net derivative instruments settlements
—

 
10

 
(327
)
 
—

 
(317
)
Advances to affiliates
(429
)
 
—

 
—

 
429

 
—

Acquisition of subsidiaries (net of cash acquired of $38)
—

 
(977
)
 
—

 
—

 
(977
)
Capital contribution
(119
)
 
—

 
—

 
119

 
—

Other
—

 
(154
)
 
28

 
—

 
(126
)
Net cash flows used for investing activities
(548
)
 
(2,096
)
 
(280
)
 
548

 
(2,376
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Dividends paid on Common Shares
(169
)
 
—

 
—

 
—

 
(169
)
Common Shares repurchased
—

 
—

 
(212
)
 
—

 
(212
)
Proceeds from issuance of long-term debt
—

 
947

 
—

 
—

 
947

Proceeds from share-based compensation plans, including windfall tax benefits
6

 
(4
)
 
60

 
—

 
62

Advances from affiliates
—

 
352

 
77

 
(429
)
 
—

Capital contribution
—

 
—

 
119

 
(119
)
 
—

Other
—

 
30

 
—

 
—

 
30

Net cash flows from (used for) financing activities
(163
)
 
1,325

 
44

 
(548
)
 
658

Effect of foreign currency rate changes on cash and cash equivalents
—

 
(37
)
 
11

 
—

 
(26
)
Net increase (decrease) in cash
(616
)
 
68

 
612

 
—

 
64

Cash – beginning of period(3)
103

 
515

 
(3
)
 
—

 
615

Cash – end of period(3)
$
(513
)
 
$
583

 
$
609

 
$
—

 
$
679

(1)
Includes all other subsidiaries of ACE Limited and intercompany eliminations.
(2)
Includes ACE Limited parent company eliminations and certain consolidating adjustments.
(3)
ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
Acquisitions (Detail) (USD $)
1 Months Ended 1 Months Ended
Jun. 17, 2014
Apr. 30, 2013
Fianzas Monterrey [Member]
Apr. 2, 2013
Fianzas Monterrey [Member]
May 31, 2013
ABA Seguros [Member]
May 2, 2013
ABA Seguros [Member]
Jun. 17, 2014
The Siam Commercial Samaggi Insurance PCL [Member]
Apr. 28, 2014
The Siam Commercial Samaggi Insurance PCL [Member]
Jul. 4, 2014
Large Corporate P&C Business Of Itau Seguros [Member]
Subsequent Event [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
Acquisition purchase price
 
$ 293,000,000 
 
$ 690,000,000 
 
 
 
 
Business Acquisition, Percentage of Voting Interests Acquired
 
 
 
 
 
 
60.86% 
 
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage
 
 
 
 
 
32.17% 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill Amount
 
 
137,000,000 
 
285,000,000 
 
46 
 
Business Acquisition, Purchase Price Allocation, Intangible Assets Other than Goodwill
 
 
73,000,000 
 
140,000,000 
 
80 
 
Business Acquisition, Cost of Acquired Entity, Expected Cash Consideration
 
 
 
 
 
 
$ 176,000,000 
$ 685,000,000 
Business Combination Total Ownership Percentage
93.03% 
 
 
 
 
 
 
 
Investments (Narrative) (Detail) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Security
Jun. 30, 2013
Jun. 30, 2014
Security
Jun. 30, 2013
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
 
 
 
Net unrealized appreciation (depreciation) included in OCI
$ 1,000,000 
$ 1,000,000 
$ 5,000,000 
$ 25,000,000 
 
Net unrealized depreciation included in AOCI
1,000,000 
 
1,000,000 
 
4,000,000 
Percentage of mortgage-backed securities represented by investments in US government agency bonds
83.00% 
 
83.00% 
 
83.00% 
Credit losses recognized in net income for corporate securities
6,000,000 
6,000,000 
10,000,000 
7,000,000 
 
Credit losses recognized in net income for mortgage-backed securities
0 
0 
 
 
 
Number of fixed maturities in an unrealized loss position
3,253 
 
3,253 
 
 
Total number of fixed maturities
25,285 
 
25,285 
 
 
Largest single unrealized loss in the fixed maturities
3,000,000 
 
3,000,000 
 
 
Number of equity securities in an unrealized loss position
52 
 
52 
 
 
Total number of equity securities
186 
 
186 
 
 
Largest single unrealized loss in the equity securities
42,000,000 
 
42,000,000 
 
 
Restricted assets in fixed maturities and short-term investments
15,700,000,000 
 
15,700,000,000 
 
16,300,000,000 
Restricted assets in cash
$ 84,000,000 
 
$ 84,000,000 
 
$ 162,000,000 
Moodys Historical Mean Recovery Rate
 
 
42.00% 
 
 
Company Assumed Recovery Rate
 
 
32.00% 
 
 
Unrealized Loss as a Percentage of Amortized Cost
8.00% 
 
8.00% 
 
 
Investments (Schedule Of Fixed Maturities By Contractual Maturity) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
Available for sale, Due in 1 year or less, Amortized Cost
$ 2,513 
$ 2,387 
Available for sale, Due after 1 year through 5 years, Amortized Cost
15,095 
14,139 
Available for sale, Due after 5 years though 10 years, Amortized Cost
15,917 
16,200 
Available for sale, Due after 10 years, Amortized Cost
5,009 
4,743 
Available for sale, Subtotal, Amortized Cost
38,534 
37,469 
Available for sale, Mortgage-backed securities, Amortized Cost
11,185 
10,937 
Available for sale, Amortized Cost
49,719 
48,406 
Available for sale, Fair Value
51,601 
49,254 
Held to maturity, Due in 1 year or less, Amortized Cost
483 
401 
Held to maturity, Due after 1 year through 5 years, Amortized Cost
2,590 
2,284 
Held to maturity, Due after 5 years through 10 years, Amortized Cost
1,157 
1,686 
Held to maturity, Due after 10 years, Amortized Cost
357 
386 
Held to maturity, Subtotal, Amortized Cost
4,587 
4,757 
Held to maturity, Mortgage backed securities, Amortized Cost
1,187 
1,341 
Available for sale, Due in 1 year or less, Fair Value
2,537 
2,411 
Available for sale, Due after 1 year through 5 years, Fair Value
15,692 
14,602 
Available for sale, Due after 5 years through 10 years, Fair Value
16,575 
16,535 
Available for sale, Due after 10 years, Fair Value
5,379 
4,812 
Available for sale, Subtotal, Fair Value
40,183 
38,360 
Available for sale, Mortgage backed securities, Fair Value
11,418 
10,894 
Held to maturity, Due in 1 year or less, Fair Value
489 
405 
Held to maturity, Due after 1 year through 5, Fair Value
2,693 
2,363 
Held to maturity, Due after 5 years through 10 years, Fair Value
1,206 
1,723 
Held to maturity, Due after 10 years, Fair Value
386 
393 
Held to maturity, Subtotal, Fair Value
4,774 
4,884 
Held to maturity, Mortgage backed securities, Fair Value
1,241 
1,379 
Held-to-maturity Securities
5,774 
6,098 
Held to maturity, Fair Value
$ 6,015 
$ 6,263 
Investments (Schedule Of Cost And Fair Value Of Equity Securities) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
Cost
$ 874 
$ 841 
Gross unrealized appreciation
77 
63 
Gross unrealized depreciation
(44)
(67)
Fair value
$ 907 
$ 837 
Investments (Net Realized Gains (Losses) And Losses Included In Net Realized Gains (Losses) And Other Comprehensive Income) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
 
 
OTTI on fixed maturities, gross
$ (9)
$ (6)
$ (15)
$ (7)
OTTI on fixed maturities recognized in OCI (pre-tax)
1 
0 
2 
0 
OTTI on fixed maturities, net
(8)
(6)
(13)
(7)
Fixed maturities, Gross realized gains excluding OTTI
54 
64 
90 
126 
Fixed maturities, Gross realized losses excluding OTTI
(26)
(27)
(46)
(52)
Total fixed maturities
20 
31 
31 
67 
OTTI on equity securities
(1)
0 
(7)
(1)
Equity securities, Gross realized gains excluding OTTI
2 
8 
4 
10 
Equity securities, Gross realized losses excluding OTTI
0 
(1)
(1)
(3)
Total equity securities
1 
7 
(4)
6 
OTTI on other investments
(3)
(1)
(3)
(2)
Foreign exchange gains (losses)
(14)
(5)
(23)
71 
Investment and embedded derivative instruments
(15)
40 
(40)
58 
Fair value adjustments on insurance derivative
2 
101 
(46)
429 
S&P put options and futures
(72)
(68)
(91)
(318)
Other derivative instruments
9 
(1)
7 
(1)
Other
(1)
0 
(8)
0 
Total net realized gains (losses)
$ (73)
$ 104 
$ (177)
$ 310 
Investments (Aggregate Fair Value And Gross Unrealized Loss By Length Of Time Security Has Continuously Been In Unrealized Loss Position) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
$ 3,328 
$ 18,228 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(34)
(652)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
7,465 
894 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(199)
(63)
Investment securities, Unrealized loss position, Total Fair Value
10,793 
19,122 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(233)
(715)
US Treasury and Government [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
0 
1,794 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
0 
(57)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
1,069 
31 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(19)
(6)
Investment securities, Unrealized loss position, Total Fair Value
1,069 
1,825 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(19)
(63)
Foreign Government Debt Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
1,274 
4,621 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(11)
(114)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
1,303 
201 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(27)
(8)
Investment securities, Unrealized loss position, Total Fair Value
2,577 
4,822 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(38)
(122)
Corporate Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
1,118 
3,836 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(12)
(118)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
1,050 
194 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(24)
(14)
Investment securities, Unrealized loss position, Total Fair Value
2,168 
4,030 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(36)
(132)
Collateralized Mortgage Backed Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
486 
5,248 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(4)
(197)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
2,540 
384 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(71)
(31)
Investment securities, Unrealized loss position, Total Fair Value
3,026 
5,632 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(75)
(228)
US States and Political Subdivisions Debt Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
366 
2,164 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(4)
(90)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
1,041 
84 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(16)
(4)
Investment securities, Unrealized loss position, Total Fair Value
1,407 
2,248 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(20)
(94)
Fixed Maturities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
3,244 
17,663 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(31)
(576)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
7,003 
894 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(157)
(63)
Investment securities, Unrealized loss position, Total Fair Value
10,247 
18,557 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(188)
(639)
Equity Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
45 
498 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(2)
(67)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
462 
0 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
(42)
0 
Investment securities, Unrealized loss position, Total Fair Value
507 
498 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
(44)
(67)
Other Long-term Investments [Member]
 
 
Investment [Line Items]
 
 
Investment securities, Unrealized loss position, 0-12 Months, Fair Value
39 
67 
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss
(1)
(9)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value
0 
0 
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss
0 
0 
Investment securities, Unrealized loss position, Total Fair Value
39 
67 
Investment securities, Unrealized loss position, Total Gross Unrealized Loss
$ (1)
$ (9)
Investments (Schedule Of Components Of Restricted Assets) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
Trust funds
$ 10,554 
$ 11,315 
Deposits with non-U.S. regulatory authorities
1,969 
1,970 
Assets pledged under repurchase agreements
1,451 
1,435 
Deposits with U.S. regulatory authorities
1,336 
1,334 
Other pledged assets
459 
391 
Total restricted assets
$ 15,769 
$ 16,445 
Fair Value Measurements (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Fair Value Measurements Of Financial Instruments [Line Items]
 
 
 
 
Level 1 to Level 2 Transfers
$ 0 
$ 6 
$ 0 
$ 19 
Level 2 to Level 1 Transfers
0 
0 
0 
0 
Guaranteed Living Benefits, Net Income Impact From Model Refinement
$ 1 
 
$ (2)
 
Redemption Notice Periods Lower Range [Member]
 
 
 
 
Fair Value Measurements Of Financial Instruments [Line Items]
 
 
 
 
Notice period for redemption for alternative investments investment funds, days
 
 
5 days 
 
Redemption Notice Periods Upper Range [Member]
 
 
 
 
Fair Value Measurements Of Financial Instruments [Line Items]
 
 
 
 
Notice period for redemption for alternative investments investment funds, days
 
 
120 days 
 
Fair Value Measurements (Financial Instruments Measured At Fair Value On Recurring Basis) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
$ 51,601 
$ 49,254 
Equity securities, at fair value
907 
837 
Short-term investments
2,108 
1,763 
Other investments
3,230 
2,976 
Securities lending collateral
1,440 
1,632 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
1,893 
1,849 
Equity securities, at fair value
414 
373 
Short-term investments
1,069 
953 
Other investments
336 
305 
Investment derivative instruments, assets
9 
19 
Other derivative instruments, assets
16 
0 
Separate account assets
1,349 
1,145 
Total assets measured at fair value
5,086 
4,644 
Investment derivative instruments, liabilities
10 
6 
Other derivative instruments, liability
15 
60 
GLB
0 1
0 1
Total liabilities measured at fair value
25 
66 
Fair Value, Inputs, Level 1 [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
1,677 
1,626 
Fair Value, Inputs, Level 1 [Member] |
Foreign [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
216 
223 
Fair Value, Inputs, Level 1 [Member] |
Corporate Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
49,485 
47,187 
Equity securities, at fair value
491 
460 
Short-term investments
1,039 
803 
Other investments
254 
231 
Securities lending collateral
1,440 
1,632 
Other derivative instruments, assets
2 
6 
Separate account assets
88 
81 
Total assets measured at fair value
52,799 
50,400 
Investment derivative instruments, liabilities
0 
0 
Other derivative instruments, liability
2 
2 
GLB
0 1
0 1
Total liabilities measured at fair value
2 
2 
Fair Value, Inputs, Level 2 [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
1,192 
1,323 
Fair Value, Inputs, Level 2 [Member] |
Foreign [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
15,381 
14,324 
Fair Value, Inputs, Level 2 [Member] |
Corporate Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
17,826 
17,304 
Fair Value, Inputs, Level 2 [Member] |
Mortgage Backed-Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
11,411 
10,886 
Fair Value, Inputs, Level 2 [Member] |
States, Municipalities, And Political Subdivisions [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
3,675 
3,350 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
223 
218 
Equity securities, at fair value
2 
4 
Short-term investments
0 
7 
Other investments
2,640 
2,440 
Other derivative instruments, assets
0 
0 
Total assets measured at fair value
2,865 
2,669 
Investment derivative instruments, liabilities
0 
0 
Other derivative instruments, liability
0 
0 
GLB
241 1
193 1
Total liabilities measured at fair value
241 
193 
Fair Value, Inputs, Level 3 [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Foreign [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
12 
44 
Fair Value, Inputs, Level 3 [Member] |
Corporate Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
204 
166 
Fair Value, Inputs, Level 3 [Member] |
Mortgage Backed-Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
7 
8 
Fair Value, Inputs, Level 3 [Member] |
States, Municipalities, And Political Subdivisions [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
0 
0 
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
51,601 
49,254 
Equity securities, at fair value
907 
837 
Short-term investments
2,108 
1,763 
Other investments
3,230 
2,976 
Securities lending collateral
1,440 
1,632 
Investment derivative instruments, assets
9 
19 
Other derivative instruments, assets
18 
6 
Separate account assets
1,437 
1,226 
Total assets measured at fair value
60,750 
57,713 
Investment derivative instruments, liabilities
10 
6 
Other derivative instruments, liability
17 
62 
GLB
241 1
193 1
Total liabilities measured at fair value
268 
261 
Estimate of Fair Value, Fair Value Disclosure [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
2,869 
2,949 
Estimate of Fair Value, Fair Value Disclosure [Member] |
Foreign [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
15,609 
14,591 
Estimate of Fair Value, Fair Value Disclosure [Member] |
Corporate Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
18,030 
17,470 
Estimate of Fair Value, Fair Value Disclosure [Member] |
Mortgage Backed-Securities [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
11,418 
10,894 
Estimate of Fair Value, Fair Value Disclosure [Member] |
States, Municipalities, And Political Subdivisions [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed maturities available for sale at fair value
$ 3,675 
$ 3,350 
Fair Value Measurements (Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Mar. 31, 2014
Dec. 31, 2013
Mar. 31, 2013
Dec. 31, 2012
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
Valuation Technique
 
 
Actuarial model 1
 
 
 
 
 
Minimum [Member]
 
 
 
 
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
Significant Unobservable Inputs Lapse rate
1.00% 1
 
1.00% 1
 
 
 
 
 
Significant Unobservable Inputs Annuitization rate
 
 
0.00% 1
 
 
 
 
 
Maximum [Member]
 
 
 
 
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
Significant Unobservable Inputs Lapse rate
30.00% 1
 
30.00% 1
 
 
 
 
 
Significant Unobservable Inputs Annuitization rate
 
 
55.00% 1
 
 
 
 
 
Guaranteed Minimum Income Benefit [Member]
 
 
 
 
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value
$ 241 2
$ 652 2
$ 241 2
$ 652 2
$ 243 2
$ 193 2
$ 753 2
$ 1,119 2
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings
(2)2
(101)2
48 2
(467)2
 
 
 
 
Fair Value
241 1
 
241 1
 
 
193 
 
 
Short-term Investments [Member]
 
 
 
 
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value
0 
9 
0 
9 
 
7 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases
 
$ 2 
$ 0 
$ 2 
 
 
 
 
Fair Value Measurements (Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Mar. 31, 2014
Dec. 31, 2013
Mar. 31, 2013
Dec. 31, 2012
Equity Securities [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
$ 0 
$ 7 
$ 0 
$ 7 
 
 
 
 
Balance- Beginning of Period, Assets
2 
2 
4 
3 
 
 
 
 
Transfers out of Level 3, Assets
0 
0 
(2)
(1)
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
0 
(5)
1 
(5)
 
 
 
 
Net Realized Gains/Losses, Assets
 
4 
 
4 
 
 
 
 
Purchases, Assets
0 
1 
1 
1 
 
 
 
 
Sales, Assets
0 
(5)
(2)
(5)
 
 
 
 
Settlements, Assets
 
0 
 
 
 
 
 
 
Balance-End of Period, Assets
2 
4 
2 
4 
 
 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
 
0 
 
 
 
 
 
 
Short-term Investments [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
7 
0 
7 
 
 
 
 
Balance- Beginning of Period, Assets
 
0 
7 
0 
 
 
 
 
Transfers out of Level 3, Assets
 
0 
(7)
0 
 
 
 
 
Purchases, Assets
 
2 
0 
2 
 
 
 
 
Balance-End of Period, Assets
0 
9 
0 
9 
 
 
 
 
Other Long-term Investments [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
0 
0 
0 
0 
 
 
 
 
Balance- Beginning of Period, Assets
2,611 
2,328 
2,440 
2,252 
 
 
 
 
Transfers out of Level 3, Assets
 
0 
 
 
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
7 
13 
48 
35 
 
 
 
 
Net Realized Gains/Losses, Assets
(3)
(1)
(3)
(2)
 
 
 
 
Purchases, Assets
152 
113 
352 
249 
 
 
 
 
Sales, Assets
(2)
0 
(3)
(9)
 
 
 
 
Settlements, Assets
(125)
(104)
(194)
(176)
 
 
 
 
Balance-End of Period, Assets
2,640 
2,349 
2,640 
2,349 
 
 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets
(3)
(1)
(3)
(2)
 
 
 
 
Available-for-sale Securities [Member] |
Foreign [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
2 
29 
2 
32 
 
 
 
 
Balance- Beginning of Period, Assets
26 
35 
44 
60 
 
 
 
 
Transfers out of Level 3, Assets
(16)
(14)
(34)
(41)
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
0 
(4)
(1)
(4)
 
 
 
 
Net Realized Gains/Losses, Assets
1 
0 
1 
1 
 
 
 
 
Purchases, Assets
0 
3 
2 
3 
 
 
 
 
Sales, Assets
(1)
(1)
(2)
(2)
 
 
 
 
Settlements, Assets
0 
0 
0 
(1)
 
 
 
 
Balance-End of Period, Assets
12 
48 
12 
48 
 
 
 
 
Available-for-sale Securities [Member] |
Corporate Debt Securities [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
26 
5 
30 
17 
 
 
 
 
Balance- Beginning of Period, Assets
151 
118 
166 
102 
 
 
 
 
Transfers out of Level 3, Assets
0 
(27)
(22)
(29)
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
2 
(1)
2 
0 
 
 
 
 
Net Realized Gains/Losses, Assets
0 
(1)
0 
(1)
 
 
 
 
Purchases, Assets
30 
23 
45 
33 
 
 
 
 
Sales, Assets
(2)
0 
(8)
0 
 
 
 
 
Settlements, Assets
(3)
(3)
(9)
(8)
 
 
 
 
Balance-End of Period, Assets
204 
114 
204 
114 
 
 
 
 
Available-for-sale Securities [Member] |
Mortgage Backed-Securities [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
0 
0 
0 
0 
 
 
 
 
Balance- Beginning of Period, Assets
8 
13 
8 
13 
 
 
 
 
Transfers out of Level 3, Assets
0 
0 
0 
0 
 
 
 
 
Change in Net Unrealized Gains (Losses) included in OCI, Assets
 
0 
 
 
 
 
 
 
Net Realized Gains/Losses, Assets
 
0 
 
 
 
 
 
 
Purchases, Assets
0 
0 
0 
0 
 
 
 
 
Sales, Assets
0 
(3)
0 
(3)
 
 
 
 
Settlements, Assets
(1)
(1)
(1)
(1)
 
 
 
 
Balance-End of Period, Assets
7 
9 
7 
9 
 
 
 
 
Guaranteed Minimum Income Benefit [Member]
 
 
 
 
 
 
 
 
Schedule Of Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value
241 1
652 1
241 1
652 1
243 1
193 1
753 1
1,119 1
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings
(2)1
(101)1
48 1
(467)1
 
 
 
 
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Liabilities
(2)
(101)
48 
(467)
 
 
 
 
Reported liabilities
$ 486 
$ 880 
$ 486 
$ 880 
 
$ 427 
$ 1,000 
$ 1,400 
Fair Value Measurements (Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Financial Instruments Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
$ 6,015 
$ 6,263 
Partially-owned insurance companies
470 
470 
Total assets
6,485 
6,733 
Short-term debt
1,870 
1,913 
Long-term debt
4,392 
4,088 
Trust preferred securities
456 
438 
Total liabilities
6,718 
6,439 
Financial Instruments Fair Value [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
795 
832 
Financial Instruments Fair Value [Member] |
Foreign [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
853 
897 
Financial Instruments Fair Value [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,929 
2,005 
Financial Instruments Fair Value [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,241 
1,379 
Financial Instruments Fair Value [Member] |
US States and Political Subdivisions Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,197 
1,150 
Fair Value, Inputs, Level 1 [Member] |
Financial Instruments Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
601 
596 
Total assets
601 
596 
Fair Value, Inputs, Level 1 [Member] |
Financial Instruments Fair Value [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
601 
596 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
5,399 
5,652 
Total assets
5,399 
5,652 
Short-term debt
1,870 
1,913 
Long-term debt
4,392 
4,088 
Trust preferred securities
456 
438 
Total liabilities
6,718 
6,439 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
194 
236 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member] |
Foreign [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
853 
897 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,914 
1,990 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,241 
1,379 
Fair Value, Inputs, Level 2 [Member] |
Financial Instruments Fair Value [Member] |
US States and Political Subdivisions Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,197 
1,150 
Fair Value, Inputs, Level 3 [Member] |
Financial Instruments Fair Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
15 
15 
Partially-owned insurance companies
470 
470 
Total assets
485 
485 
Fair Value, Inputs, Level 3 [Member] |
Financial Instruments Fair Value [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Financial Instruments Fair Value [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
15 
15 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
5,774 
6,098 
Partially-owned insurance companies
470 
470 
Total assets
6,244 
6,568 
Short-term debt
1,851 
1,901 
Long-term debt
4,057 
3,807 
Trust preferred securities
309 
309 
Total liabilities
6,217 
6,017 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member] |
U.S. Treasury And Agency [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
779 
820 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member] |
Foreign [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
809 
864 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,828 
1,922 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member] |
Collateralized Mortgage Backed Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
1,187 
1,341 
Carrying (Reported) Amount, Fair Value Disclosure [Member] |
Financial Instruments Carrying Value [Member] |
US States and Political Subdivisions Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Fixed maturities held to maturity
$ 1,171 
$ 1,151 
Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Schedule Of Guaranteed Minimum Benefits Income And Expense) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
$ 4,332 
$ 4,067 
$ 8,302 
$ 7,640 
Policy benefits and other reserve adjustments
144 
110 
258 
241 
Net realized gains (losses)
(73)
104 
(177)
310 
Guaranteed Minimum Death Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
18 
20 
37 
40 
Policy benefits and other reserve adjustments
13 
25 
28 
44 
Guaranteed Minimum Income Benefit [Member]
 
 
 
 
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
Net premiums earned
34 
37 
70 
76 
Policy benefits and other reserve adjustments
10 
2 
19 
11 
Net realized gains (losses)
2 
101 
(48)
470 
Gain recognized in income
26 
136 
3 
535 
Net cash received
29 
31 
62 
63 
Net (increase) decrease in liability
$ (3)
$ 105 
$ (59)
$ 472 
Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2014
Guaranteed Minimum Death Benefit [Member]
Dec. 31, 2013
Guaranteed Minimum Death Benefit [Member]
Jun. 30, 2014
Guaranteed Minimum Income Benefit [Member]
Dec. 31, 2013
Guaranteed Minimum Income Benefit [Member]
Jun. 30, 2013
Guaranteed Minimum Income Benefit [Member]
Mar. 31, 2013
Guaranteed Minimum Income Benefit [Member]
Dec. 31, 2012
Guaranteed Minimum Income Benefit [Member]
Jun. 30, 2014
Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]
Dec. 31, 2013
Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]
Jun. 30, 2014
Guaranteed Living Benefits [Member]
Dec. 31, 2013
Guaranteed Living Benefits [Member]
Guaranteed Minimum Benefits [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Reported liabilities
 
$ 107 
$ 100 
$ 486 
$ 427 
$ 880 
$ 1,000 
$ 1,400 
 
 
 
 
Fair value derivative adjustment in liability
 
 
 
241 
193 
 
 
 
 
 
 
 
Net amount at risk
 
601 
586 
 
 
 
 
 
 
 
173 
136 
Mortality percentage according to Annuity 2000 mortality table
 
 
 
 
 
 
 
 
 
 
100.00% 
 
Discounting assumption used in the calculation of the benefit reserve averaging - lower range
 
1.50% 
 
 
 
 
 
 
3.00% 
 
3.50% 
 
Discounting assumption used in the calculation of the benefit reserve averaging - upper range
 
2.50% 
 
 
 
 
 
 
4.00% 
 
4.50% 
 
Total claim amount payable, if all of the Company's cedants' policyholders covered were to die immediately
 
676 
 
 
 
 
 
 
64 
 
 
 
GMBD net amount of risk
 
 
 
 
 
 
 
 
69 
73 
 
 
GLB net amount of risk
 
 
 
 
 
 
 
 
$ 142 
$ 141 
 
 
Average attained age of all policyholders under all benefits reinsured, years
69 years 
 
 
 
 
 
 
 
 
 
 
 
Debt (Details) (USD $)
In Millions, unless otherwise specified
May 1, 2014
ACE INA Senior Notes Due May 2015 [Member]
May 1, 2014
Senior Notes [Member]
ACE INA Senior Notes Due May 2024 [Member]
Jun. 30, 2014
ACE INA Senior Notes Due June 2014 [Member]
Debt Instrument [Line Items]
 
 
 
Debt Instrument, Face Amount
 
$ 700 
 
Debt Instrument, Interest Rate, Stated Percentage
5.60% 
3.35% 
5.875% 
Make Whole Premium Additional Percent
 
0.15% 
 
Long-term Debt, Current Maturities
$ 450 
 
$ 500 
Commitments, Contingencies, And Guarantees (Balance Sheet Locations, Fair Values In Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
$ 1,296 
$ 1,202 
Cross Currency Swap [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
95 
50 
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,432 
3,910 
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,372 
871 
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
280 1
254 1
Investment And Embedded Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
4,475 
6,287 
Derivative Instruments Fair Value
342 
321 
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,468 2
1,692 2
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
250 2
250 2
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
72 
8 
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
1,790 
1,950 
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional Value/Payment Provision
315 3
277 3
Other Assets [Member] |
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
2 
3 
Other Assets [Member] |
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
2 
3 
Other Assets [Member] |
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
5 
13 
Other Assets [Member] |
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
0 2
0 2
Other Assets [Member] |
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
2 2
6 2
Other Assets [Member] |
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
16 
 
Other Assets [Member] |
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
18 
6 
Other Assets [Member] |
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
0 3
0 3
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Foreign Exchange Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(4)
(4)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures Contracts On Money Market Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
0 
0 
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Futures contracts on notes and bonds [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(6)
(2)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
0 1
0 1
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Investment And Embedded Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(10)
(6)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Single-Stock Future [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(15)2
(60)2
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Options On Equity Market Indices [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
0 2
0 2
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Other Derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(2)
(2)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] |
Other Derivative Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
(17)
(62)
Fixed Maturities Available For Sale [Member] |
Convertibles and Bonds with Warrants Attached [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
333 1
302 1
Accounts Payable Future Policy Benefits [Member] |
Guaranteed Living Benefits [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Instruments Fair Value
$ (486)3
$ (427)3
Commitments, Contingencies, And Guarantees (Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
$ (76)
$ 72 
$ (170)
$ 168 
Foreign Exchange Future [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(1)
12 
(4)
17 
All Other Futures Contracts And Options [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(18)
33 
(40)
40 
Convertibles and Bonds with Warrants Attached [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
4 1
(5)1
4 1
1 1
Investment And Embedded Derivative Instruments [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(15)
40 
(40)
58 
Guaranteed Living Benefits [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
2 2
101 2
(46)2
429 2
Single-Stock Future [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(71)3
(66)3
(88)3
(303)3
Options On Equity Market Indices [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(1)3
(2)3
(3)3
(15)3
Guaranteed Living Benefit And Other Derivative Instruments [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
(61)
32 
(130)
110 
Other Derivatives [Member]
 
 
 
 
Commitments Contingencies And Guarantees [Line Items]
 
 
 
 
Net realized gains (losses)
$ 9 
$ (1)
$ 7 
$ (1)
Commitments, Contingencies, And Guarantees (Narrative) (Detail) (USD $)
3 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
 
 
Carrying value of limited partnerships and partially-owned investment companies included in other investments
$ 2,100,000,000 
 
Funding commitments relating to limited partnerships and partially-owned investment companies
1,000,000,000 
 
Repurchase obligations
1,401,000,000 
1,401,000,000 
Securities lending payable
1,441,000,000 
1,633,000,000 
Securities lending collateral
1,440,000,000 
1,632,000,000 
Unrecognized tax benefits
27,000,000 
 
Derivative liability subject to a master netting agreement
14,000,000 
41,000,000 
Amount of credit facility not renewed by the company
$ 500,000,000 
 
Shareholders' Equity (Detail)
3 Months Ended 6 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended 1 Months Ended
Jun. 30, 2014
USD ($)
Jun. 30, 2014
CHF
Jun. 30, 2013
USD ($)
Jun. 30, 2013
CHF
Jun. 30, 2014
USD ($)
Jun. 30, 2014
CHF
Jun. 30, 2013
USD ($)
Jun. 30, 2013
CHF
Dec. 31, 2013
CHF
Nov. 30, 2013
November 2013 Stock Repurchase Plan [Member]
USD ($)
Jun. 30, 2014
November 2013 Stock Repurchase Plan [Member]
USD ($)
Jun. 30, 2014
November 2013 Stock Repurchase Plan [Member]
USD ($)
Jul. 29, 2014
November 2013 Stock Repurchase Plan [Member]
Subsequent Event [Member]
USD ($)
Equity, Class of Treasury Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Share repurchase amount
 
 
 
 
 
 
 
 
 
 
$ 237,000,000 
$ 569,000,000 
$ 133,000,000 
Repurchase of outstanding common shares, shares
 
 
 
 
 
 
 
 
 
 
2,306,000 
5,793,882 
1,281,630 
Share repurchase authorization remains
 
 
 
 
 
 
 
 
 
 
 
1,370,000,000 
1,240,000,000 
Common Shares in treasury, shares
6,606,823 
6,606,823 
 
 
6,606,823 
6,606,823 
 
 
3,038,477 
 
 
 
 
Stock repurchase program, authorized amount
 
 
 
 
 
 
 
 
 
$ 2,000,000,000 
 
 
 
Increase to dividend approved by shareholders in January
 
 
 
 
$ 0.12 
 
 
 
 
 
 
 
 
Dividends declared per common share
$ 0.65 
 0.58 
$ 0.51 
 0.48 
$ 1.40 
 1.23 
$ 1.00 
 0.94 
 
 
 
 
 
Par Value Reduction
 
 
 
 
$ 0.51 
 
 
 
 
 
 
 
 
Common Shares, par value
 
 26.01 
 
 
 
 26.01 
 
 
 27.04 
 
 
 
 
Share-Based Compensation (Detail) (USD $)
6 Months Ended 0 Months Ended
Jun. 30, 2014
Feb. 27, 2014
Stock Options [Member]
Feb. 27, 2014
Restricted Stock [Member]
Feb. 27, 2014
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock option vesting period in years
3 years 
 
 
 
Stock option term in years
10 years 
 
 
 
Stock options granted
 
1,779,074 
 
 
Weighted-average grant date fair value for stock options granted
 
$ 18.00 
 
 
Restricted stock award and units vesting period in years
4 years 
 
 
 
Restricted stock awards granted to employees and officers of the company
 
 
1,492,290 
 
Restricted stock units awarded to employees and officers of the company
 
 
 
276,992 
Grant date fair value of awards except for options granted to employees and officers of the company
 
 
$ 96.76 
$ 96.76 
Segment Information (Operations By Segment) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
$ 4,559 
$ 4,391 
$ 8,744 
$ 8,189 
Net premiums earned
4,332 
4,067 
8,302 
7,640 
Losses and loss expenses
2,388 
2,250 
4,549 
4,176 
Policy benefits
144 
110 
258 
241 
Policy acquisition costs
758 
665 
1,486 
1,279 
Administrative expenses
566 
564 
1,101 
1,078 
Underwriting income (loss)
476 
478 
908 
866 
Net investment income
556 
534 
1,109 
1,065 
Net realized gains (losses) including OTTI
(73)
104 
(177)
310 
Interest expense
72 
73 
143 
133 
(Gains) losses from fair value changes in separate account assets
(17)
11 
(11)
7 
Other
(8)
26 
(31)
20 
Other (income) expense
(25)
37 
(42)
27 
Income tax expense (benefit)
133 
115 
226 
237 
Net income (loss)
779 
891 
1,513 
1,844 
Insurance - North American P&C [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
1,635 
1,529 
3,053 
2,813 
Net premiums earned
1,542 
1,428 
3,029 
2,766 
Losses and loss expenses
1,016 
950 
1,956 
1,828 
Policy acquisition costs
152 
142 
311 
285 
Administrative expenses
175 
159 
336 
284 
Underwriting income (loss)
199 
177 
426 
369 
Net investment income
265 
250 
535 
501 
Net realized gains (losses) including OTTI
(11)
28 
(20)
54 
Interest expense
2 
3 
5 
1 
Other
(24)
(10)
(44)
(25)
Income tax expense (benefit)
91 
91 
174 
185 
Net income (loss)
384 
371 
806 
763 
Insurance - North American Agriculture [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Underwriting Income Including Losses Related to Crop Derivatives
27 
 
 
 
Net premiums written
388 
453 
582 
566 
Net premiums earned
330 
351 
433 
403 
Losses and loss expenses
287 
293 
413 
325 
Policy acquisition costs
23 
20 
28 
24 
Administrative expenses
1 
3 
2 
8 
Underwriting income (loss)
19 
35 
(10)
46 
Net investment income
6 
7 
13 
13 
Net realized gains (losses) including OTTI
8 
1 
6 
1 
Interest expense
0 
0 
0 
0 
Other
9 
8 
17 
16 
Income tax expense (benefit)
5 
8 
(2)
10 
Net income (loss)
19 
27 
(6)
34 
Crop Derivative Gain or Loss
8 
 
 
 
Insurance - Overseas General [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
1,760 
1,630 
3,531 
3,250 
Net premiums earned
1,709 
1,563 
3,321 
3,022 
Losses and loss expenses
830 
768 
1,647 
1,515 
Policy acquisition costs
402 
360 
788 
699 
Administrative expenses
256 
251 
506 
487 
Underwriting income (loss)
221 
184 
380 
321 
Net investment income
136 
136 
268 
268 
Net realized gains (losses) including OTTI
14 
8 
4 
42 
Interest expense
1 
2 
2 
3 
Other
8 
17 
2 
16 
Income tax expense (benefit)
55 
50 
92 
96 
Net income (loss)
307 
259 
556 
516 
Global Reinsurance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net premiums written
278 
292 
586 
571 
Net premiums earned
261 
245 
545 
492 
Losses and loss expenses
109 
93 
235 
199 
Policy acquisition costs
60 
48 
127 
96 
Administrative expenses
14 
12 
28 
24 
Underwriting income (loss)
78 
92 
155 
173 
Net investment income
80 
71 
157 
143 
Net realized gains (losses) including OTTI
(15)
31 
(23)
51 
Interest expense
2 
1 
3 
2 
Other
(10)
2 
(29)
(6)
Income tax expense (benefit)
10 
7 
20 
15 
Net income (loss)
141 
184 
295 
356 
Life [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Life underwriting income
89 
 
 
 
Net premiums written
498 
487 
992 
989 
Net premiums earned
490 
480 
974 
957 
Losses and loss expenses
146 
145 
297 
302 
Policy benefits
144 
110 
258 
241 
Policy acquisition costs
121 
95 
232 
175 
Administrative expenses
73 
86 
141 
171 
Underwriting income (loss)
6 
44 
46 
68 
Net investment income
66 
63 
130 
126 
Net realized gains (losses) including OTTI
(72)
36 
(148)
163 
Interest expense
3 
4 
6 
8 
(Gains) losses from fair value changes in separate account assets
(17)
11 
(11)
7 
Other
4 
3 
11 
3 
Income tax expense (benefit)
12 
10 
22 
23 
Net income (loss)
(2)
115 
0 
316 
Corporate And Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Losses and loss expenses
0 
1 
1 
7 
Policy acquisition costs
 
0 
 
0 
Administrative expenses
47 
53 
88 
104 
Underwriting income (loss)
(47)
(54)
(89)
(111)
Net investment income
3 
7 
6 
14 
Net realized gains (losses) including OTTI
3 
0 
4 
(1)
Interest expense
64 
63 
127 
119 
Other
5 
6 
12 
16 
Income tax expense (benefit)
(40)
(51)
(80)
(92)
Net income (loss)
$ (70)
$ (65)
$ (138)
$ (141)
Segment Information (Net Premiums Earned For Segment By Product) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
$ 1,612 
$ 1,509 
$ 2,967 
$ 2,628 
Casualty
1,542 
1,454 
3,022 
2,807 
Life, Accident & Health
1,178 
1,104 
2,313 
2,205 
Net premiums earned
4,332 
4,067 
8,302 
7,640 
Insurance - North American P&C [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
423 
368 
828 
715 
Casualty
1,018 
967 
1,999 
1,869 
Life, Accident & Health
101 
93 
202 
182 
Net premiums earned
1,542 
1,428 
3,029 
2,766 
Insurance - North American Agriculture [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
330 
351 
433 
403 
Casualty
0 
0 
0 
0 
Life, Accident & Health
0 
0 
0 
0 
Net premiums earned
330 
351 
433 
403 
Insurance - Overseas General [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
727 
658 
1,420 
1,243 
Casualty
395 
374 
764 
713 
Life, Accident & Health
587 
531 
1,137 
1,066 
Net premiums earned
1,709 
1,563 
3,321 
3,022 
Global Reinsurance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Property & All Other
132 
132 
286 
267 
Casualty
129 
113 
259 
225 
Net premiums earned
261 
245 
545 
492 
Life [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Life, Accident & Health
490 
480 
974 
957 
Net premiums earned
$ 490 
$ 480 
$ 974 
$ 957 
Earnings Per Share (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 779 
$ 891 
$ 1,513 
$ 1,844 
Weighted-average shares outstanding
337,846,228 
341,047,290 
338,353,260 
340,913,450 
Share-based compensation plans
3,286,359 
3,053,975 
3,267,499 
3,120,263 
Adjusted weighted-average shares outstanding and assumed conversions
341,132,587 
344,101,265 
341,620,759 
344,033,713 
Basic earnings per share (US$ per share)
$ 2.30 
$ 2.61 
$ 4.47 
$ 5.41 
Diluted earnings per share (US$ per share)
$ 2.28 
$ 2.59 
$ 4.43 
$ 5.36 
Potential anti-dilutive share conversions
1,778,040 
1,811,030 
1,220,731 
1,231,105 
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Balance Sheet) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Jun. 30, 2013
Dec. 31, 2012
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
$ 63,620 
$ 60,928 
 
 
Cash
594 1 2
579 1 3
679 4
615 4
Insurance and reinsurance balances receivable
5,316 
5,026 
 
 
Reinsurance recoverable on losses and loss expenses
10,768 
11,227 
 
 
Reinsurance recoverable on policy benefits
234 
218 
 
 
Value of business acquired
514 
536 
 
 
Goodwill and other intangible assets
5,522 
5,404 
 
 
Other assets
10,879 
10,592 
 
 
Total assets
97,447 
94,510 
 
 
Unpaid losses and loss expenses
37,177 
37,443 
 
 
Unearned premiums
8,296 
7,539 
 
 
Future policy benefits
4,778 
4,615 
 
 
Short-term debt
1,851 
1,901 
 
 
Long-term debt
4,057 
3,807 
 
 
Trust preferred securities
309 
309 
 
 
Other liabilities
10,654 
10,071 
 
 
Total liabilities
67,122 
65,685 
 
 
Total shareholders' equity
30,325 
28,825 
27,295 
 
Total liabilities and shareholders’ equity
97,447 
94,510 
 
 
Scenario, Previously Reported [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Cash
 
 
679 
615 
ACE Limited (Parent Guarantor)
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
33 
32 
 
 
Cash
44 1 2
0 1 3
0 4
103 4
Investments in subsidiaries
30,207 
28,351 
 
 
Due from subsidiaries and affiliates, net
305 
844 
 
 
Other assets
4 
5 
 
 
Total assets
30,593 
29,232 
 
 
Affiliated notional cash pooling programs
0 2
185 3
 
 
Trust preferred securities
 
0 
 
 
Other liabilities
268 
222 
 
 
Total liabilities
268 
407 
 
 
Total shareholders' equity
30,325 
28,825 
 
 
Total liabilities and shareholders’ equity
30,593 
29,232 
 
 
ACE Limited (Parent Guarantor) |
Scenario, Previously Reported [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Cash
 
 
(513)5
103 5
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
11 
10 
 
 
Cash
1 1 2
16 1 3
3 4
2 4
Insurance and reinsurance balances receivable
0 
0 
 
 
Reinsurance recoverable on losses and loss expenses
0 
0 
 
 
Reinsurance recoverable on policy benefits
0 
0 
 
 
Value of business acquired
0 
0 
 
 
Goodwill and other intangible assets
0 
0 
 
 
Investments in subsidiaries
18,946 
18,105 
 
 
Other assets
295 
258 
 
 
Total assets
19,253 
18,389 
 
 
Unpaid losses and loss expenses
0 
0 
 
 
Unearned premiums
0 
0 
 
 
Future policy benefits
0 
0 
 
 
Due to subsidiaries and affiliates, net
78 
714 
 
 
Short-term debt
450 
500 
 
 
Affiliated notional cash pooling programs
477 2
0 3
 
 
Long-term debt
4,045 
3,795 
 
 
Trust preferred securities
309 
309 
 
 
Other liabilities
1,418 
1,318 
 
 
Total liabilities
6,777 
6,636 
 
 
Total shareholders' equity
12,476 
11,753 
 
 
Total liabilities and shareholders’ equity
19,253 
18,389 
 
 
ACE INA Holdings Inc (Subsidiary Issuer) |
Scenario, Previously Reported [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Cash
 
 
583 5
515 5
Other ACE Limited Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
63,576 
60,886 
 
 
Cash
1,026 1 2
748 1 3
1,285 4
859 4
Insurance and reinsurance balances receivable
6,169 
5,835 
 
 
Reinsurance recoverable on losses and loss expenses
19,609 
20,057 
 
 
Reinsurance recoverable on policy benefits
1,260 
1,215 
 
 
Value of business acquired
514 
536 
 
 
Goodwill and other intangible assets
5,522 
5,404 
 
 
Other assets
14,300 
13,788 
 
 
Total assets
111,976 
108,469 
 
 
Unpaid losses and loss expenses
45,589 
45,714 
 
 
Unearned premiums
10,154 
9,242 
 
 
Future policy benefits
5,804 
5,612 
 
 
Due to subsidiaries and affiliates, net
227 
130 
 
 
Short-term debt
1,401 
1,401 
 
 
Affiliated notional cash pooling programs
0 2
0 3
 
 
Long-term debt
12 
12 
 
 
Trust preferred securities
 
0 
 
 
Other liabilities
12,112 
11,655 
 
 
Total liabilities
75,299 
73,766 
 
 
Total shareholders' equity
36,677 
34,703 
 
 
Total liabilities and shareholders’ equity
111,976 
108,469 
 
 
Other ACE Limited Subsidiaries |
Scenario, Previously Reported [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Cash
 
 
609 5 6
(3)5 6
Consolidating Adjustments and Eliminations
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Investments
0 
0 
 
 
Cash
(477)1 2
(185)1 3
(609)4
(349)4
Insurance and reinsurance balances receivable
(853)
(809)
 
 
Reinsurance recoverable on losses and loss expenses
(8,841)
(8,830)
 
 
Reinsurance recoverable on policy benefits
(1,026)
(997)
 
 
Value of business acquired
0 
0 
 
 
Goodwill and other intangible assets
0 
0 
 
 
Investments in subsidiaries
(49,153)
(46,456)
 
 
Due from subsidiaries and affiliates, net
(305)
(844)
 
 
Other assets
(3,720)
(3,459)
 
 
Total assets
(64,375)
(61,580)
 
 
Unpaid losses and loss expenses
(8,412)
(8,271)
 
 
Unearned premiums
(1,858)
(1,703)
 
 
Future policy benefits
(1,026)
(997)
 
 
Due to subsidiaries and affiliates, net
(305)
(844)
 
 
Short-term debt
0 
0 
 
 
Affiliated notional cash pooling programs
(477)2
(185)3
 
 
Long-term debt
 
0 
 
 
Trust preferred securities
 
0 
 
 
Other liabilities
(3,144)
(3,124)
 
 
Total liabilities
(15,222)
(15,124)
 
 
Total shareholders' equity
(49,153)
(46,456)
 
 
Total liabilities and shareholders’ equity
(64,375)
(61,580)
 
 
Consolidating Adjustments and Eliminations |
Scenario, Previously Reported [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Cash
 
 
$ 0 5 7
$ 0 7
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Operations) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
$ 4,559 
$ 4,391 
$ 8,744 
$ 8,189 
Net premiums earned
4,332 
4,067 
8,302 
7,640 
Net investment income
556 
534 
1,109 
1,065 
Net realized gains (losses) including OTTI
(73)
104 
(177)
310 
Losses and loss expenses
2,388 
2,250 
4,549 
4,176 
Policy benefits
144 
110 
258 
241 
Policy acquisition costs and administrative expenses
1,324 
1,229 
2,587 
2,357 
Interest (income) expense
72 
73 
143 
133 
Other (income) expense
(25)
37 
(42)
27 
Income tax expense (benefit)
133 
115 
226 
237 
Net income (loss)
779 
891 
1,513 
1,844 
Comprehensive income (loss)
1,348 
(499)
2,456 
217 
ACE Limited (Parent Guarantor)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net investment income
1 
1 
1 
1 
Equity in earnings of subsidiaries
745 
842 
1,447 
1,756 
Net realized gains (losses) including OTTI
0 
0 
0 
12 
Policy acquisition costs and administrative expenses
22 
12 
39 
27 
Interest (income) expense
(9)
(8)
(19)
(15)
Other (income) expense
(50)
(57)
(92)
(95)
Income tax expense (benefit)
4 
5 
7 
8 
Net income (loss)
779 
891 
1,513 
1,844 
Comprehensive income (loss)
1,348 
(499)
2,456 
217 
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
0 
0 
0 
0 
Net premiums earned
0 
0 
0 
0 
Net investment income
1 
1 
1 
2 
Equity in earnings of subsidiaries
231 
257 
411 
445 
Net realized gains (losses) including OTTI
8 
0 
7 
0 
Losses and loss expenses
0 
0 
0 
0 
Policy benefits
0 
0 
0 
0 
Policy acquisition costs and administrative expenses
8 
5 
14 
9 
Interest (income) expense
70 
69 
141 
131 
Other (income) expense
6 
6 
20 
15 
Income tax expense (benefit)
(25)
(33)
(55)
(66)
Net income (loss)
181 
211 
299 
358 
Comprehensive income (loss)
511 
(533)
777 
(534)
Other ACE Limited Subsidiaries
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
4,559 
4,391 
8,744 
8,189 
Net premiums earned
4,332 
4,067 
8,302 
7,640 
Net investment income
554 
532 
1,107 
1,062 
Net realized gains (losses) including OTTI
(81)
104 
(184)
298 
Losses and loss expenses
2,388 
2,250 
4,549 
4,176 
Policy benefits
144 
110 
258 
241 
Policy acquisition costs and administrative expenses
1,294 
1,212 
2,534 
2,321 
Interest (income) expense
11 
12 
21 
17 
Other (income) expense
19 
88 
30 
107 
Income tax expense (benefit)
154 
143 
274 
295 
Net income (loss)
795 
888 
1,559 
1,843 
Comprehensive income (loss)
1,364 
(502)
2,502 
216 
Consolidating Adjustments and Eliminations
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Equity in earnings of subsidiaries
(976)
(1,099)
(1,858)
(2,201)
Net income (loss)
(976)
(1,099)
(1,858)
(2,201)
Comprehensive income (loss)
(1,875)
1,035 
(3,279)
318 
Scenario, Previously Reported [Member]
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
 
4,391 
 
8,189 
Net premiums earned
 
4,067 
 
7,640 
Net investment income
 
534 
 
1,065 
Net realized gains (losses) including OTTI
 
104 
 
310 
Losses and loss expenses
 
2,250 
 
4,176 
Policy benefits
 
110 
 
241 
Policy acquisition costs and administrative expenses
 
1,229 
 
2,357 
Interest (income) expense
 
73 
 
133 
Other (income) expense
 
37 
 
27 
Income tax expense (benefit)
 
115 
 
237 
Net income (loss)
 
891 
 
1,844 
Comprehensive income (loss)
 
(499)
 
217 
Scenario, Previously Reported [Member] |
ACE Limited (Parent Guarantor)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net investment income
 
1 
 
1 
Equity in earnings of subsidiaries
 
842 
 
1,756 
Net realized gains (losses) including OTTI
 
0 
 
12 
Policy acquisition costs and administrative expenses
 
12 
 
27 
Interest (income) expense
 
(8)
 
(15)
Other (income) expense
 
(57)
 
(95)
Income tax expense (benefit)
 
5 
 
8 
Net income (loss)
 
891 
 
1,844 
Comprehensive income (loss)
 
(499)
 
217 
Scenario, Previously Reported [Member] |
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
 
2,502 
 
4,584 
Net premiums earned
 
2,331 
 
4,337 
Net investment income
 
254 
 
502 
Equity in earnings of subsidiaries
 
0 
 
0 
Net realized gains (losses) including OTTI
 
28 
 
38 
Losses and loss expenses
 
1,434 
 
2,687 
Policy benefits
 
63 
 
144 
Policy acquisition costs and administrative expenses
 
674 
 
1,300 
Interest (income) expense
 
74 
 
141 
Other (income) expense
 
65 
 
99 
Income tax expense (benefit)
 
92 
 
148 
Net income (loss)
 
211 
 
358 
Comprehensive income (loss)
 
(533)
 
(534)
Scenario, Previously Reported [Member] |
Other ACE Limited Subsidiaries
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Net premiums written
 
1,889 1
 
3,605 1
Net premiums earned
 
1,736 1
 
3,303 1
Net investment income
 
279 1
 
562 1
Net realized gains (losses) including OTTI
 
76 1
 
260 1
Losses and loss expenses
 
816 1
 
1,489 1
Policy benefits
 
47 1
 
97 1
Policy acquisition costs and administrative expenses
 
543 1
 
1,030 1
Interest (income) expense
 
7 1
 
7 1
Other (income) expense
 
29 1
 
23 1
Income tax expense (benefit)
 
18 1
 
81 1
Net income (loss)
 
631 1
 
1,398 1
Comprehensive income (loss)
 
1,375 1
 
2,290 1
Scenario, Previously Reported [Member] |
Consolidating Adjustments and Eliminations
 
 
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
 
 
Equity in earnings of subsidiaries
 
(842)2
 
(1,756)2
Net income (loss)
 
(842)2
 
(1,756)2
Comprehensive income (loss)
 
$ (842)2
 
$ (1,756)2
Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Cash Flows) (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
$ 2,096 
$ 1,808 
Purchases of fixed maturities available for sale
(7,960)
(10,804)
Purchases of fixed maturities held to maturity
(129)
(299)
Purchases of equity securities
(64)
(194)
Sales of fixed maturities available for sale
3,842 
5,396 
Sales of equity securities
45 
62 
Maturities and redemptions of fixed maturities available for sale
3,163 
4,112 
Maturities and redemptions of fixed maturities held to maturity
414 
908 
Payments to Acquire Short-term Investments
(295)
(137)
Net derivative instruments settlements
(185)
(317)
Acquisition of subsidiaries
(172)
(977)
Cash Acquired from Acquisition
4 
38 
Other
(118)
(126)
Net cash flows used for investing activities
(1,459)
(2,376)
Dividends paid on Common Shares
(428)
(169)
Common Shares repurchased
(557)
(212)
Proceeds from issuance of long-term debt
699 
947 
Repayment of long-term debt
(500)
0 
Proceeds from share-based compensation plans, including windfall tax benefits
75 
62 
Other
86 
30 
Net cash flows (used for) from financing activities
(625)
658 
Effect of foreign currency rate changes on cash and cash equivalents
3 
(26)
Net increase in cash
15 
64 
Cash – beginning of period
579 1 2
615 3
Cash – end of period
594 1 4
679 3
ACE Limited (Parent Guarantor)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
83 
18 
Sales of fixed maturities available for sale
 
0 
Payments to Acquire Short-term Investments
(1)
 
Net derivative instruments settlements
0 
0 
Payment Of Contributions To Subsidiary
 
(119)
Net cash flows used for investing activities
(1)
(119)
Dividends paid on Common Shares
(428)
(169)
Proceeds from share-based compensation plans, including windfall tax benefits
0 
6 
Advances To From Affiliates Financing Activities
575 
(352)
Net proceeds from (payments to) affiliated notional cash pooling program
(185)1
513 3
Other
 
0 
Net cash flows (used for) from financing activities
(38)
(2)
Net increase in cash
44 
(103)
Cash – beginning of period
0 1 2
103 3
Cash – end of period
44 1 4
0 3
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
(7)
(38)
Purchases of fixed maturities available for sale
0 
0 
Purchases of fixed maturities held to maturity
0 
0 
Purchases of equity securities
0 
0 
Sales of fixed maturities available for sale
0 
0 
Sales of equity securities
0 
0 
Maturities and redemptions of fixed maturities available for sale
0 
0 
Maturities and redemptions of fixed maturities held to maturity
0 
0 
Payments to Acquire Short-term Investments
(1)
3 
Net derivative instruments settlements
(7)
0 
Acquisition of subsidiaries
0 
0 
Payment Of Contributions To Subsidiary
 
(1,010)
Other
(3)
0 
Net cash flows used for investing activities
(11)
(1,007)
Proceeds from issuance of long-term debt
699 
947 
Repayment of long-term debt
(500)
 
Proceeds from share-based compensation plans, including windfall tax benefits
0 
0 
Advances To From Affiliates Financing Activities
(667)
352 
Net proceeds from (payments to) affiliated notional cash pooling program
477 1
(253)3
Other
(6)
0 
Net cash flows (used for) from financing activities
3 
1,046 
Effect of foreign currency rate changes on cash and cash equivalents
0 
0 
Net increase in cash
(15)
1 
Cash – beginning of period
16 1 2
2 3
Cash – end of period
1 1 4
3 3
Other ACE Limited Subsidiaries
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
2,020 
1,828 
Purchases of fixed maturities available for sale
(7,963)
(10,907)
Purchases of fixed maturities held to maturity
(129)
(299)
Purchases of equity securities
(64)
(194)
Sales of fixed maturities available for sale
3,845 
5,499 
Sales of equity securities
45 
62 
Maturities and redemptions of fixed maturities available for sale
3,163 
4,112 
Maturities and redemptions of fixed maturities held to maturity
414 
908 
Payments to Acquire Short-term Investments
(293)
(140)
Net derivative instruments settlements
(178)
(317)
Acquisition of subsidiaries
(172)
(977)
Payment Of Contributions To Subsidiary
 
0 
Other
(115)
(126)
Net cash flows used for investing activities
(1,447)
(2,379)
Dividends paid on Common Shares
0 
 
Common Shares repurchased
(557)
(212)
Repayment of long-term debt
0 
 
Proceeds from share-based compensation plans, including windfall tax benefits
75 
56 
Advances To From Affiliates Financing Activities
92 
 
Capital contribution
 
1,129 
Net proceeds from (payments to) affiliated notional cash pooling program
0 1
0 3
Other
92 
30 
Net cash flows (used for) from financing activities
(298)
1,003 
Effect of foreign currency rate changes on cash and cash equivalents
3 
(26)
Net increase in cash
278 
426 
Cash – beginning of period
748 1 2
859 3
Cash – end of period
1,026 1 4
1,285 3
Consolidating Adjustments and Eliminations
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
0 
0 
Purchases of fixed maturities available for sale
3 
103 
Purchases of fixed maturities held to maturity
0 
0 
Purchases of equity securities
0 
0 
Sales of fixed maturities available for sale
(3)
(103)
Sales of equity securities
0 
0 
Maturities and redemptions of fixed maturities available for sale
0 
0 
Maturities and redemptions of fixed maturities held to maturity
0 
0 
Payments to Acquire Short-term Investments
 
0 
Net derivative instruments settlements
0 
0 
Acquisition of subsidiaries
0 
0 
Payment Of Contributions To Subsidiary
 
1,129 
Other
0 
0 
Net cash flows used for investing activities
0 
1,129 
Dividends paid on Common Shares
0 
 
Common Shares repurchased
0 
0 
Repayment of long-term debt
0 
 
Proceeds from share-based compensation plans, including windfall tax benefits
0 
0 
Advances To From Affiliates Financing Activities
0 
0 
Capital contribution
 
(1,129)
Net proceeds from (payments to) affiliated notional cash pooling program
(292)1
(260)3
Other
 
0 
Net cash flows (used for) from financing activities
(292)
(1,389)
Effect of foreign currency rate changes on cash and cash equivalents
0 
0 
Net increase in cash
(292)
(260)
Cash – beginning of period
(185)1 2
(349)3
Cash – end of period
(477)1 4
(609)3
Scenario, Previously Reported [Member]
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
 
1,808 
Purchases of fixed maturities available for sale
 
(10,941)
Purchases of fixed maturities held to maturity
 
(299)
Purchases of equity securities
 
(194)
Sales of fixed maturities available for sale
 
5,396 
Sales of equity securities
 
62 
Maturities and redemptions of fixed maturities available for sale
 
4,112 
Maturities and redemptions of fixed maturities held to maturity
 
908 
Net derivative instruments settlements
 
(317)
Acquisition of subsidiaries
 
(977)
Other
 
(126)
Net cash flows used for investing activities
 
(2,376)
Dividends paid on Common Shares
 
(169)
Common Shares repurchased
 
(212)
Proceeds from issuance of long-term debt
 
947 
Proceeds from share-based compensation plans, including windfall tax benefits
 
62 
Other
 
30 
Net cash flows (used for) from financing activities
 
658 
Effect of foreign currency rate changes on cash and cash equivalents
 
(26)
Net increase in cash
 
64 
Cash – beginning of period
 
615 
Cash – end of period
 
679 
Scenario, Previously Reported [Member] |
ACE Limited (Parent Guarantor)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
 
95 
Maturities and redemptions of fixed maturities held to maturity
 
0 
Net derivative instruments settlements
 
0 
Payments To From Affiliates
 
(429)
Payment Of Contributions To Subsidiary
 
(119)5
Net cash flows used for investing activities
 
(548)
Dividends paid on Common Shares
 
(169)
Proceeds from issuance of long-term debt
 
0 
Proceeds from share-based compensation plans, including windfall tax benefits
 
6 
Advances To From Affiliates Financing Activities
 
0 
Capital contribution
 
0 
Net cash flows (used for) from financing activities
 
(163)
Net increase in cash
 
(616)
Cash – beginning of period
 
103 6
Cash – end of period
 
(513)6
Scenario, Previously Reported [Member] |
ACE INA Holdings Inc (Subsidiary Issuer)
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
 
876 
Purchases of fixed maturities available for sale
 
(6,604)
Purchases of fixed maturities held to maturity
 
(284)
Purchases of equity securities
 
(161)
Sales of fixed maturities available for sale
 
3,571 
Sales of equity securities
 
51 
Maturities and redemptions of fixed maturities available for sale
 
1,839 
Maturities and redemptions of fixed maturities held to maturity
 
613 
Net derivative instruments settlements
 
10 
Payments To From Affiliates
 
0 
Acquisition of subsidiaries
 
(977)
Payment Of Contributions To Subsidiary
 
0 
Other
 
(154)
Net cash flows used for investing activities
 
(2,096)
Proceeds from issuance of long-term debt
 
947 
Proceeds from share-based compensation plans, including windfall tax benefits
 
(4)
Advances To From Affiliates Financing Activities
 
352 
Capital contribution
 
0 
Other
 
30 
Net cash flows (used for) from financing activities
 
1,325 
Effect of foreign currency rate changes on cash and cash equivalents
 
(37)
Net increase in cash
 
68 
Cash – beginning of period
 
515 6
Cash – end of period
 
583 6
Scenario, Previously Reported [Member] |
Other ACE Limited Subsidiaries
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Net cash flows from operating activities
 
837 
Purchases of fixed maturities available for sale
 
(4,337)7
Purchases of fixed maturities held to maturity
 
(15)
Purchases of equity securities
 
(33)7
Sales of fixed maturities available for sale
 
1,825 7
Sales of equity securities
 
11 7
Maturities and redemptions of fixed maturities available for sale
 
2,273 7
Maturities and redemptions of fixed maturities held to maturity
 
295 7
Net derivative instruments settlements
 
(327)7
Payments To From Affiliates
 
0 7
Payment Of Contributions To Subsidiary
 
0 7
Other
 
28 
Net cash flows used for investing activities
 
(280)7
Common Shares repurchased
 
(212)7
Proceeds from issuance of long-term debt
 
0 7
Proceeds from share-based compensation plans, including windfall tax benefits
 
60 7
Advances To From Affiliates Financing Activities
 
77 7
Capital contribution
 
119 7
Net cash flows (used for) from financing activities
 
44 7
Effect of foreign currency rate changes on cash and cash equivalents
 
11 7
Net increase in cash
 
612 7
Cash – beginning of period
 
(3)6 7
Cash – end of period
 
609 6 7
Scenario, Previously Reported [Member] |
Consolidating Adjustments and Eliminations
 
 
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
 
 
Purchases of fixed maturities available for sale
 
0 5
Purchases of equity securities
 
0 5
Sales of fixed maturities available for sale
 
0 5
Sales of equity securities
 
0 5
Maturities and redemptions of fixed maturities available for sale
 
0 5
Maturities and redemptions of fixed maturities held to maturity
 
0 5
Net derivative instruments settlements
 
0 5
Payments To From Affiliates
 
429 5
Payment Of Contributions To Subsidiary
 
119 5
Net cash flows used for investing activities
 
548 5
Common Shares repurchased
 
0 5
Proceeds from issuance of long-term debt
 
0 5
Proceeds from share-based compensation plans, including windfall tax benefits
 
0 5
Advances To From Affiliates Financing Activities
 
(429)5
Capital contribution
 
(119)5
Net cash flows (used for) from financing activities
 
(548)5
Effect of foreign currency rate changes on cash and cash equivalents
 
0 5
Net increase in cash
 
0 5
Cash – beginning of period
 
0 5
Cash – end of period
 
$ 0 5 6