(RTTNews) - Insurer ACE Ltd. (ACE: News ) said Tuesday that its third quarter profit surged from last year, driven by higher underwriting income.

The Zurich, Switzerland-based company posted net income available to holders of common shares of $494 million or $1.46 per share for the third quarter, compared to $54 million or $0.16 per share in the prior year quarter.

Income excluding net realized gains rose to $701 million or $2.07 per share from $504 million or $1.50 per share in the year-ago quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.97 per share for the third quarter. Analysts' estimates typically exclude special items.

Gross premiums written declined 4% to $5.0 billion from $5.2 billion in the previous year quarter.

Net premiums written for the quarter fell 4% to $3.2 billion from $3.3 billion, while net premiums earned were $3.4 billion, down 6% from $3.6 billion in the year-ago quarter. Excluding the impact of foreign exchange, net premiums written and earned were flat and decreased 3%, respectively.

Underwriting income surged to $411 million from $111 million in the third quarter of 2008. Net investment income decreased 2% to $511 million. Invested assets increased 7% to $46.7 billion.

The property and casualty (P&C) combined ratio was 88.1%, compared with 97.9% in the previous year quarter..

Insurance-North American net premiums written decreased 6%, with combined ratio of 91.3%, down from 104.1% last year. Excluding the impact of prior year crop insurance, net premiums written were flat.
The Insurance-Overseas General net premiums written decreased 7%, with combined ratio of 87.4%, down from 89.9%. Adjusted for the impact of foreign exchange, net premiums written increased by 2%.

The Global Reinsurance net premiums written increased 18%. The combined ratio was 58.5%, compared with 91.5%.

Life net premiums written increased 7%. Life underwriting income increased 12% to $95 million.

For the nine-month period of 2009, the company reported net income available to holders of common shares of $1.6 billion or $4.73 per share, compared to $1.2 billion or $3.45 per share in the previous year period.

Income excluding net realized gains rose 6% to $2.1 billion or $6.16 per share from $2.0 billion or $5.81 per share in the prior year period.

Net premiums written dropped to $9.9 billion, and net premiums earned declined to $9.9 billion from the year-ago period.

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