Swiss-based insurer ACE Limited (ACE: Quote), Tuesday reported a surge in first-quarter earnings that topped Street estimates, helped mostly by higher premiums, hefty one-time gains, and lower catastrophe losses.
ACE said its total net premiums written for the quarter rose 3.7 percent from last year, and premiums earned was up 2.2 percent.
The company's growth in premiums written was mainly at its Insurance-Overseas General segment which grew 8.4 percent from last year. At Insurance-North America, net premiums written edged up 0.6 percent from last year, while Global Reinsurance net premiums written slid 16.5 percent.
ACE said its property and casualty, or P&C combined ratio for the quarter improved to 89.2 percent from 105.2 percent last year. Combined ratio is a key metric used by insurance firms. A ratio below 100 percent shows that the company is making underwriting profit.
Commenting on the results, CEO Evan Greenberg said, "We and much of the industry benefited from relatively light catastrophe losses in the quarter, particularly compared to prior year. We expect our company's premium growth rate to accelerate as the year progresses."
Catastrophe losses for the quarter decreased to $19 million from $489 million a year ago.
ACE reported first-quarter net income of $973 million or $2.84 per share, compared to $250 million or $0.73 per share last year.
Results for the 2012 quarter included realized gains of $ 272 million.
Excluding realized gains/losses, operating earnings for the quarter were $701 million or $2.05 per share, compared to $259 million or $0.76 per share last year.
On average, 21 analysts polled by Thomson Reuters expected earnings of $1.88 per share for the quarter. Analysts' estimates typically exclude special items.
Net premiums written for the quarter totaled $3.57 billion, compared to $3.45 billion last year.
Analysts expected revenues of $3.54 billion for the quarter.
Net premiums earned for the quarter grew to $3.38 billion from $3.3 billion last year.
Loss expense for the quarter was much lower at $1.8 billion, compared to $2.26 billion last year.
ACE said it is issuing updated guidance for full year 2012 to account for the positive first quarter prior period reserve development and the lower-than-planned catastrophe losses realized in the first quarter.
ACE forecast fiscal 2012 after-tax operating income of $7.03 to $7.43 per share, stating the outlook includes estimated catastrophe losses of $325 million after tax for the second through fourth quarters.
ACE closed Tuesday at $75.24, up $0.74 or 0.99%, on a volume of 2 million million shares on the NYSE. In after hours, the stock gained $0.76 or 1.01%.
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by RTT Staff Writer
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