2003-10-29 ACE Limited (NYSE: ACE) 8-K

http://www.sec.gov/Archives/edgar/data/896159/000119312503068666/0001193125-03-0686...
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<SEC-DOCUMENT>0001193125-03-068666.txt : 20031029
<SEC-HEADER>0001193125-03-068666.hdr.sgml : 20031029
<ACCEPTANCE-DATETIME>20031028203146
ACCESSION NUMBER:
0001193125-03-068666
CONFORMED SUBMISSION TYPE:
8-K
PUBLIC DOCUMENT COUNT:
3
CONFORMED PERIOD OF REPORT:
20031028
ITEM INFORMATION:
ITEM INFORMATION:
Financial statements and exhibits
FILED AS OF DATE:
20031029
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME:
CENTRAL INDEX KEY:
STANDARD INDUSTRIAL CLASSIFICATION:
IRS NUMBER:
STATE OF INCORPORATION:
FISCAL YEAR END:
ACE LTD
0000896159
FIRE, MARINE & CASUALTY INSURANCE [6331]
000000000
D0
1231
FILING VALUES:
FORM TYPE:
SEC ACT:
SEC FILE NUMBER:
FILM NUMBER:
8-K
1934 Act
001-11778
03962080
BUSINESS ADDRESS:
STREET 1:
STREET 2:
CITY:
STATE:
ZIP:
BUSINESS PHONE:
ACE BLDG
30 WOODBOURNE AVE
HAMILTON HM 08 BERMU
D0
00000
8092955200
MAIL ADDRESS:
STREET 1:
CITY:
STATE:
ZIP:
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
<BODY BGCOLOR="WHITE">
P O BOX HM 1015
HAMITON BERMUDA
D0
00000
<HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left"> UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant To Section 13 or 15 (d) of the Securities Exchange Act of 193
STYLE="margin-top:0px;margin-bottom:0px"> Date of Report (Date of earliest event reported
 ACE LIMITED 
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Exact name of registrant as specified in its charter) 
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="32%">Cayman Islands</TD>
<TD VALIGN="bottom" WIDTH="2%" > </TD>
<TD VALIGN="top" ALIGN="center" WIDTH="32%">1-11778</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="32%">98-0091805</TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="32%">(State or other jurisdiction)</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="32%">(Commission File Number)</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="32%"> (I.R.S. Employer of Incorporation Identification No.)</TD></TR>
</TABLE> ACE Global
Headquarters 17 Woodbourne Avenue Hamilton HM 08 Bermuda (Address of principal executive offices) </
STYLE="margin-top:0px;margin-bottom:0px"> Registrants telephone number, including a
 Not applicable </
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Former name or former address, if changed since last report) <
SIZE="1"> <HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left">

<HR SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">

<TR>
<TD WIDTH="8%" VALIGN="top" ALIGN="left">Item 7.</TD>
<TD WIDTH="1%" VALIGN="top"> </TD>
<TD ALIGN="left" VALIGN="top">Financial Statements, Pro Forma Financial Information and Exhibits. </TD></TR></TABLE> 
SIZE="1"> 
<TR>
<TD WIDTH="8%" VALIGN="top" ALIGN="left">(c) Exhibits</TD>
<TD ALIGN="left" VALIGN="top"></TD></TR></TABLE> 
<TR>
<TD VALIGN="bottom" ALIGN="center">Exhibit Number <HR WIDTH="44" SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="89%"> Description<HR WIDTH="65" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="3%"> 99.1</TD>
<TD VALIGN="bottom" WIDTH="89%">Press release, dated October 28, 2003, reporting third quarter results</TD></TR>
<TR>
<TR>
<TD VALIGN="bottom" WIDTH="89%">Third quarter Financial Supplement</TD></TR>
</TABLE> 
<TR>
<TD WIDTH="8%" VALIGN="top" ALIGN="left">Item 12.</TD>
<TD ALIGN="left" VALIGN="top">Results of Operations and Financial Condition </TD></TR></TABLE> 
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">On October 28, 2003, ACE Limited issued a press release reporting its third quarter 2003 results and the availability of its t
supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference. In accordance with general instruction B.6 of Form 8-K, the information in this report, includin
pursuant to Item 12 and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. 
SIGNATURES 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
duly authorized. <DIV ALIGN="right">
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<TR>
<TD VALIGN="top" COLSPAN="3" WIDTH="90%">ACE LIMITED </TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="8%">By:</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="90%">/s/ Philip V. Bancroft </TD></TR>
<TR>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="bottom" COLSPAN="2"><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top"> </TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="90%"> Philip V. Bancroft Chief Financial Officer</TD></TR>
</TABLE></DIV> DATE: October 28, 2003 
EXHIBIT INDEX 
<TD VALIGN="bottom" ALIGN="center">Number <HR WIDTH="44" SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="44%" ALIGN="center"> Description<HR WIDTH="65" SIZE="1" NOSHADE COLOR="#000000"
<TD VALIGN="bottom" WIDTH="43%" ALIGN="center"> Method of Filing<HR WIDTH="95" SIZE="1" NOSHADE COLOR="#00
<TR>
<TD VALIGN="bottom" WIDTH="44%">Press release, dated October 28, 2003, reporting third quarter results</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%">Furnished herewith</TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TR>
<TD VALIGN="bottom" WIDTH="44%">Third quarter Financial Supplement</TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%">Furnished herewith</TD></TR>
</TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>dex991.htm
<DESCRIPTION>PRESS RELEASE DATED OCTOBER 28, 2003
<TEXT>
<HTML><HEAD>
<TITLE>Press Release dated October 28, 2003</TITLE>
</HEAD>
Exhibit 99.1 
<TR>
<TD VALIGN="top" WIDTH="23%"> [LOGO]</TD>
<TD VALIGN="top" NOWRAP WIDTH="30%"> ACE Limited ACE Global Headquarters 17 Woodbourne Avenue Bermuda Hamilton HM 08 Bermuda</TD>
<TD VALIGN="top" WIDTH="19%"> PO Box HM 1015 H
STYLE="margin-top:0px;margin-bottom:0px">Bermuda 441 295-5200 main 441 292-8675 fax www.acelimited.com</TD>
<TD VALIGN="top" WIDTH="14%"> News Release</TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5" WIDTH="19%"> FOR IMMEDIATE REL
STYLE="margin-top:0px;margin-bottom:-6px"> </TD>
<TD VALIGN="top"> </TD></TR>
<TR>
<TD VALIGN="top" WIDTH="19%">Investor Contact: </TD>
<TD VALIGN="top" WIDTH="14%"> Helen M. Wilson </TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="19%">Media Contact: </TD>
<TD VALIGN="top" WIDTH="14%"> Anna Lowry (441)
278-6683</TD></TR>
</TABLE> ACE LIMITED
REPORTS THIRD QUARTER RESULTS HAMILTON,
2003ACE Limited (NYSE:ACE) today reported that fully diluted net income per share totaled $1.22, which included after-tax net realized gains of $51 million for the quarter. This compared with a net loss of $0.24
year ago after considering $205 million in net realized losses. Income excluding net realized gains (losses) for the third quarter of 2003 was up 105% to a record $304 million, or $1.04 per share, compared with $148 milli
the same quarter last year. (1) 
SIZE="1"> Net premiums written increased 4% to $2.3 billion for the quarter. Out of total net premiums written, consolidat
increased by 27%, while Financial Services declined 78% reflecting the erratic nature of production in this segment. Most of this decline was due to the absence of new loss portfolio transfer and equity CDO premium for th
STYLE="margin-top:0px;margin-bottom:0px"> Brian Duperreault, Chairman and Chief Executive Officer of ACE Li
was another excellent quarter for our Company that once again demonstrated the growing strength of our organization, our global presence and diversified product capability. ACE recorded increased income before net realize
operating segment for the quarter. We remain optimistic about business conditions for the balance of the year and beyond. Other operating highlights were as follows: 
<TR>
<TD WIDTH="4%"> </TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"></TD>
<TD ALIGN="left" VALIGN="top">The P&C combined ratio was 91.6% for the quarter compared with 98.0% a year ago </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Current quarter catastrophe losses totaled $42 million or 1.9% of P&C earned premiums for the quarter, compared with $100 million, or 6.7% of P&C
comparable quarter of 2002 </TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">Operating cash flow amounted to $1.1 billion for the quarter </TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">Net investment income increased 9% to $216 million </TD></TR></TABLE> 
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8/12/11 3:49 PM

<TD ALIGN="left" VALIGN="top">Diluted book value per ordinary share increased to $27.76 from $24.16 at December 30, 2002, up 15% (2) </TD></TR></TABLE> Shareholders equity is $8.3 billion, an increase of 31% from December 31, 2002. Tangible equity amounted to $5.6 billion, a gain of 53% in the first nine months. Total capital resourc
September 30, 2003. ACEs debt to total capital ratio improved to 17.7%. Income before net realized gains as a percent of average equity, including the application of FAS 115, on an annualized basis totaled 15.2% for
excluding FAS 115. 
Page 1/6 
Financial results improved over the prior years results for each segment; details are available in the financial
supplement. Key items include: 
<TR>
<TD ALIGN="left" VALIGN="top">Insurance-North American: Net premiums written rose 23% in the quarter and the combined ratio was 91.9% reflecting the positive contributions made by the
</TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">Insurance-Overseas General: Net premiums written were up 26% as reported and 19% excluding the effect of foreign exchange. The foreign exchange impact on
segments combined ratio improved to 92.9%. We are experiencing particularly strong results in our European and Asia Pacific operations. </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Global Reinsurance: Net premiums written were up 66%, a result of our continued strategy to diversify our reinsurance operations into a multi-line reinsu
excellent combined ratio of 75.0% in the quarter. The company is developing its casualty reinsurance market with segment net written premium year-to-date of $1 billion. We incurred catastrophe losses of $12 million in the
</TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">Financial Services: Net premiums written were $105 million in the third quarter of 2003, principally arising from the Financial Guaranty business. Income
gains (losses) was up 19% in the quarter. The segment had a $26 million pre-tax realized gain on its FAS 133 mark-to-market and reported a combined ratio of 89.5% for the third quarter. </TD></TR></TABLE> Please refer to the ACE Financial Supplement September 30, 2003,
Companys website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, financial guaranty portfolio, investment portfolio an
ACEs website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports fin_supp_september_30_2003.xls. (Due to the length of this URL, it may be necessary to copy and paste this hyperlink i
browsers URL address field.) ACE Limited (NY
quarter earnings conference call and webcast on Wednesday, October 29, 2003 beginning at 8:00 a.m. EST. The call is available via live and archived webcast at www.acelimited.com or by dialing 1-973-582-2745. Please
Investor Information, Calendar of Events for details. A replay of the call will be available from Wednesday, October 29, 2003 until Wednesday, November 12, 2003 at 5:00 p.m. EST. To listen to the replay, dial:
United States) or 1-973-341-3080 (international); passcode 4224312. <FONT FACE="Times Ne
Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. A component of the Standard & Poors 500 stock index, ACE Group conducts its business on a worldwide basis wi
nearly 50 countries. Additional information can be found at: http://www.acelimited.com. <HR WIDTH="10%" SIZE="1" NOSHADE COLOR
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"> </TD>
<TD ALIGN="left" VALIGN="top">1Income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments is a common performance measurement. We believe this presentation enhance
results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments because the amount of these gains (losses) is heavily influenced by, and
to, the availability of market opportunities. This measure should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP). </TD></TR></TABLE
STYLE="margin-top:0px;margin-bottom:0px"> 
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"> </TD>
<TD ALIGN="left" VALIGN="top">2Diluted book value per ordinary share is ordinary shareholders equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the nu
issued. </TD></TR></TABLE> 
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: Any forward-looking statements made in this press release ref
current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertai
results to differ materially from those set forth in these statements. For example, the Companys forward-looking statements could be affected by competition, pricing and policy term trends, the levels of new and ren
market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the i
various asbestos producers and related businesses, new theories of liability, judicial and legislative developments, litigation tactics, the amount and timing of reinsurance recoverable, actual market developments, rating
terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as managements response to these factors, and other factors identified in the
the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation
any forward-looking statements, whether as a result of new information, future events or otherwise. (tables to follow) 
ACE Limited Summary Consolidated Balance Sheets (in millions of U.S. dollars) 
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> September 30 2003<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> December 31 2002<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">(Unaudited)</TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">(Audited)</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="76%"> Assets</TD>
<TD VALIGN="bottom"> </TD></TR>
<TR>
<TD VALIGN="top" WIDTH="76%"> Total investments and cash</TD>
<TD VALIGN="bottom" WIDTH="1%">$</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">22,085</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">18,324</TD></TR>
<TD VALIGN="top" WIDTH="76%"> Reinsurance recoverable</TD>
<TD VALIGN="bottom" WIDTH="1%"> </TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Insurance and reinsurance balances receivable</TD>
<TD VALIGN="top" WIDTH="76%"> Other assets</TD>
<TR>
<TD VALIGN="bottom"><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
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<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD>

<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="76%"> Total assets</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="76%"> Liabilities</TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Unpaid losses and loss expenses</TD>
<TD VALIGN="top" WIDTH="76%"> Unearned premiums</TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Other liabilities</TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Total liabilities</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="76%"> Commitments and contingencies</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="76%"> Mezzanine equity</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right"> </TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">311</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="76%"> Shareholders equity</TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Total shareholders equity</TD>
<TR>
<TD VALIGN="top" WIDTH="76%"> Total liabilities, mezzanine equity and shareholders equity</TD>
<TR>
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<TD VALIGN="top" WIDTH="76%"> Diluted book value per ordinary share (2
FACE="Times New Roman" SIZE="2" COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">27.76</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">24.16</TD></TR>
FACE="Times New Roman" SIZE="2">Summary Consolidated Financial Data (in millions of U.S. dollars, exce
and ratios) (Unaudited) 
<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Three Months Ended September 30<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" > </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Nine Months Ended </TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="43%"> Gross premiums written</TD>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right"> 3,451</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%"> </TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%"> </TD></TR>
<TR>
<TD VALIGN="top" WIDTH="43%"> Net premiums written</TD>
<TD VALIGN="top" WIDTH="43%"> Net premiums earned</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Losses and loss expenses</TD>
<TD VALIGN="top" WIDTH="43%"> Life and annuity benefits</TD>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">45</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Policy acquisition costs</TD>
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<TD VALIGN="top" WIDTH="43%"> 
<TD VALIGN="bottom"><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom"><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">(3</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">)</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">)</TD></TR>
<TR>
<TR>
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Roman" SIZE="2">Administrative expenses</TD>
Roman" SIZE="2">Underwriting income</TD>
Roman" SIZE="2">Net investment income</TD>
Roman" SIZE="2">Other income (expense)</TD>
Roman" SIZE="2">Interest expense</TD>
Roman" SIZE="2">Income tax expense</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="43%"> Income excluding net realized gains (losses) (1)</TD>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right"> 304</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Net realized gains (losses)</TD>
<TD VALIGN="top" WIDTH="43%"> Tax effect of net realized gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Net income</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Preference shares dividend</TD>
<TD VALIGN="top" WIDTH="43%"> FELINE PRIDE dividend</TD>
<TR>
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<TD VALIGN="top" WIDTH="43%"> 344</TD>
<TR>
<TR>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">(0.24</TD>
<TR>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">281,890,236</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">%</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">%</TD></TR>
<TR>
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SIZE="2">Net income available to holders of Ordinary Shares</TD>
SIZE="2">Diluted earnings per share:</TD>
SIZE="2">Income excluding net realized gains (losses) Net income</TD>
SIZE="2">Weighted average diluted shares outstanding</TD>
SIZE="2">Loss and loss expense ratio</TD>
SIZE="2">Policy acquisition cost ratio</TD>
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<TD VALIGN="top" WIDTH="43%"> Administrative expense ratio</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Combined ratio</TD>
</TABLE> Ratios exclude life
reinsurance business 
FACE="Times New Roman" SIZE="2">Consolidated Supplemental Segment Information (in millions of U.S. dol
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Unaudited) 
<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Three Months Ended September 30<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Nine Months Ended 
<TD VALIGN="top" WIDTH="67%"> Gross Premiums Written</TD>
<TR>
<TD VALIGN="top" WIDTH="67%"> InsuranceNorth American</TD>
<TD VALIGN="top" WIDTH="67%"> InsuranceOverseas General</TD>
<TR>
<TD VALIGN="top" WIDTH="67%"> Global Reinsurance*</TD>
<TD VALIGN="top" WIDTH="67%"> Financial Services</TD>
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<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Total</TD>
Roman" SIZE="2">Net Premiums Written</TD>
Roman" SIZE="2">InsuranceNorth American</TD>
Roman" SIZE="2">InsuranceOverseas General</TD>
Roman" SIZE="2">Global Reinsurance*</TD>
Roman" SIZE="2">Financial Services</TD>
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<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Total</TD>
Roman" SIZE="2">Net Premiums Earned</TD>
Roman" SIZE="2">InsuranceNorth American</TD>
Roman" SIZE="2">InsuranceOverseas General</TD>
Roman" SIZE="2">Global Reinsurance*</TD>
Roman" SIZE="2">Financial Services</TD>
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<TR>
<TR>
<TR>
<TR>
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SIZE="2">Total</TD>
SIZE="2">Income (Loss) Excluding Net Realized Gains (Losses)InsuranceNorth American</TD>
SIZE="2">InsuranceOverseas General</TD>
SIZE="2">Global Reinsurance*</TD>
SIZE="2">Financial Services</TD>
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<TR>
<TD VALIGN="top" WIDTH="67%"> Corporate</TD>
<TR>
<TD VALIGN="top" WIDTH="67%"> Total</TD>
<TR>
</TABLE> 
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">*</TD>
<TD ALIGN="left" VALIGN="top">Includes both property and casualty reinsurance and life reinsurance </TD></TR></TABLE> # # # 
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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>dex992.htm
<DESCRIPTION>THIRD QUARTER FINANCIAL SUPPLEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Third Quarter Financial Supplement</TITLE>
</HEAD>
Exhibit 99.2 [GRAPHIC APPEARS HERE] Financial Supplement </F
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">September 30, 2003 
<TR>
<TD VALIGN="top" WIDTH="14%"> Investor Contact</TD>
<TD VALIGN="top" WIDTH="29%"> Helen M. Wilson Phone: (441) 299-9283 Fax: (441) 292-8675 email: investorrelations@ace.bm</TD>
<TD VALIGN="top" WIDTH="53%"> This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with th
Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.</TD></TR>
</TABLE> Application of the Safe Harbor of
the Private Securities Litigation Reform Act of 1995: <FONT FACE="Ti
forward-looking statements made in this financial supplement reflect the Companys current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Priv
Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Companys forward-looking statements
recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience which differs from the Companys assumptions, uncertainties in the reserving or settlement process, the imp
coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative developments, litigation tactics, credit developments among reinsurers an
in the Companys filings with the Securities and Exchange Commission, including the Companys Annual Report on Form 10-K for the year ended December 31, 2002, the Companys quarterly reports on Form 10-Q fo
31, 2003 and June 30, 2003 and in the Companys earnings press release, which are available on the Companys website. Readers are cautioned not to place undue reliance on these forward-looking statements, which
on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 
[GRAPHIC APPEARS HERE] ACE Limited Financial Supplement Table of Contents 
<TR>
<TD VALIGN="bottom" ALIGN="center">Page <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> I.</TD>
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<TD VALIGN="bottom" WIDTH="88%"> Financial Highlights</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Consolidated Financial Highlights</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">1</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> II.</TD>
<TD VALIGN="bottom" WIDTH="88%"> Consolidated Results</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Consolidated ResultsConsecutive Quarters</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">2-3</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Computation of Basic and Diluted Earnings Per Share</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Summary Consolidated Balance Sheets</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Consolidated Premiums by Line of Business</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Consolidating Statement of Operations</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> III.</TD>
<TD VALIGN="bottom" WIDTH="88%"> Segment Results</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Insurance-North American</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Insurance-Overseas General</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Global Reinsurance</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Financial Services</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Financial Guaranty Profile</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Financial Services Portfolio</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> IV.</TD>
<TD VALIGN="bottom" WIDTH="88%"> Balance Sheet Details</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Loss Reserve Rollforward</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Asbestos and Environmental Reserves</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Reinsurance Recoverable Analysis</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Investment Portfolio</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Realized and Unrealized Gains (Losses)</TD>
<TR>
<TD VALIGN="bottom" WIDTH="88%"> Capital Structure</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> V.</TD>
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<TD VALIGN="bottom" WIDTH="88%"> 
<TR>
<TR>
<TR>
</TABLE>
Roman" SIZE="2">Other Disclosures</TD>
Roman" SIZE="2"> Non-GAAP Financial Measures and Comprehensive Income</TD>
Roman" SIZE="2"> Diluted Book Value per Ordinary Share</TD>
Roman" SIZE="2"> Statutory Accounting Principles to GAAP Reconciliation</TD>
Roman" SIZE="2"> Glossary</TD>
ALIGN="center">Consolidated Financial Highlights (in millions of
share data and ratios) (Unaudited) 
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center">Three months ended Sept. 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2" ALIGN="center"> % Change 3Q-03 vs. 3Q-02<HR SIZE="1" NOSHADE COLOR="#000000"></TD
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center">Nine months ended Sept. 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2" ALIGN="center"> % Change YTD- 03 vs. YTD-02<HR SIZE="1" NOSHADE COLOR="#000000"></TD><
<TR>
<TD VALIGN="bottom" WIDTH="5%" > </TD></TR>
<TD VALIGN="top" WIDTH="43%">Gross premiums written</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">-2%</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">15%</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="43%">Net premiums written</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">4%</TD>
<TD VALIGN="top" WIDTH="43%">Net premiums earned</TD>
<TR>
<TD VALIGN="top" WIDTH="43%">Net investment income</TD>
<TD VALIGN="top" WIDTH="43%">Income excluding net realized gains (losses)</TD>
15 of 179
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<TR>
<TD VALIGN="top" WIDTH="43%">Net income</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">NM</TD>
<TD VALIGN="top" WIDTH="43%">Comprehensive income</TD>
<TR>
<TD VALIGN="top" WIDTH="43%">Operating cash flow</TD>
<TD VALIGN="top" WIDTH="43%">Combined ratio</TD>
<TR>
<TD VALIGN="top" WIDTH="43%">Loss and loss expense ratio</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">64.6%</TD>
<TD VALIGN="top" WIDTH="43%">Underwriting and administrative expense ratio</TD>
<TR>
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<TD VALIGN="top" WIDTH="43%">Combined ratio</TD>

<TR>
<TD VALIGN="top" WIDTH="43%">Annualized ROE</TD>
<TD VALIGN="top" WIDTH="43%">Annualized ROE, excluding FAS 115</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Diluted earnings per share</TD>
<TD VALIGN="top" WIDTH="43%"> Income excluding net realized gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Net income</TD>
<TD VALIGN="top" WIDTH="43%">Diluted book value per ordinary share</TD>
<TR>
<TD VALIGN="top" WIDTH="43%">Diluted tangible book value per ordinary share</TD>
17 of 179
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<TD VALIGN="top" WIDTH="43%"> Weighted average diluted ordinary shares outstanding</TD>
<TR>
<TD VALIGN="top" WIDTH="43%">Debt/ total capitalization</TD>
Page 1 
ALIGN="center">Consolidated ResultsConsecutive Quarters (i
 (Unaudited) 
STYLE="margin-top:0px;margin-bottom:0px">ACE Limited Consolidated 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">3Q-03 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> YTD Full Year Consolidated Property and Casualty</TD>
<TR>
<TD VALIGN="top" COLSPAN="5" WIDTH="6%">Excluding Financial Services (1)</TD>
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<TR>
<TR>
19 of 179
Roman" SIZE="2">Gross premiums written</TD>
Roman" SIZE="2">Net premiums written</TD>
Roman" SIZE="2">Net premiums earned</TD>
Roman" SIZE="2">Losses and loss expenses</TD>
Roman" SIZE="2">Policy acquisition costs</TD>
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<TR>
<TD VALIGN="top" WIDTH="34%"> Administrative expenses</TD>
<TR>
<TD VALIGN="top" WIDTH="34%"> P& C Underwriting income (loss)</TD>
<TR>
<TD VALIGN="top" WIDTH="34%"> Financial Services underwriting income</TD>
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<TR>
<TR>
21 of 179
Roman" SIZE="2">Life underwriting income (loss) excluding investment income</TD>
Roman" SIZE="2">Other income (expense) (2)</TD>
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<TR>
<TD VALIGN="bottom" WIDTH="1%">$</TD>
<TD VALIGN="bottom" WIDTH="2%" ALIGN="right">304</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%"> </TD>
<TD VALIGN="bottom" WIDTH="2%" ALIGN="right">(99</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">)</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%"> </TD></TR>
<TR>
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SIZE="2">Income tax expense (benefit)</TD>
SIZE="2">Income (loss) excluding net realized gains (losses)</TD>
SIZE="2">Net realized gains (losses)</TD>
SIZE="2">Tax effect of net realized gains (losses)</TD>
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<TR>
<TD VALIGN="top" WIDTH="34%"> Net income (loss)</TD>
<TR>
<TD VALIGN="top" WIDTH="34%"> % Change Versus Prior Year Period (1)</TD>
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<TR>
<TD VALIGN="bottom" WIDTH="2%" ALIGN="right">11%</TD>
<TR>
24 of 179
Roman" SIZE="2">Other Ratios (1)</TD>
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<TR>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">-10%</TD>
<TR>
<TD NOWRAP VALIGN="bottom" WIDTH="2%" ALIGN="right">15.2%</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="2%" ALIGN="right">-6.6%</TD>
<TR>
25 of 179
SIZE="2">Net premiums written/gross premiums written</TD>
SIZE="2">Effective tax rate</TD>
SIZE="2">ROE</TD>
SIZE="2">Annualized ROE</TD>
SIZE="2">Annualized ROE, excluding FAS 115</TD>
8/12/11 3:49 PM

<TD NOWRAP VALIGN="bottom" WIDTH="2%" ALIGN="right">-7.1%</TD>
</TABLE><HR WIDTH="10%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">(1)</TD>
<TD ALIGN="left" VALIGN="top">Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. <
<TR>
<TD ALIGN="left" VALIGN="top">Other income (expense) in Q2 and Q3 of 2002 includes debt prepayment expense. The tax effect in 2Q-02 was $4M and 3Q-02 was $5M. </TD></TR>
ALIGN="center">Consolidated ResultsConsecutive Quarters (i
STYLE="margin-top:0px;margin-bottom:0px">ACE Limited Consolidated 
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center">3Q-03 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> YTD 
SIZE="1">2003<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> YTD 
SIZE="1">2002<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> Full Year 2002<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="34%"> Combined ratio</TD>
<TR>
<TD VALIGN="top" WIDTH="34%"> Loss and loss expense ratio</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="6%">64.6%</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%">73.5%</TD></TR>
<TD VALIGN="top" WIDTH="34%"> Policy acquisition cost ratio</TD>
<TR>
<TR>
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<TD VALIGN="bottom" ALIGN="right" WIDTH="6%">91.4%</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%">101.7%</TD></TR>
<TR>
</TABLE> Consolidated Property and
Casualty Excluding Financial Services (1) 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> Full Year 
<TD VALIGN="bottom" ALIGN="right">92.4%</TD>
27 of 179
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<TR>
<TR>
<TD VALIGN="bottom" WIDTH="1%"> </TD>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">91.6%</TD>
<TD VALIGN="bottom" ALIGN="right">123.7%</TD>
<TR>
<TD VALIGN="top" WIDTH="27%"> Large losses and other items</TD>
28 of 179
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<TR>
<TD VALIGN="top" WIDTH="27%"> Catastrophe losses</TD>
<TD VALIGN="bottom" ALIGN="right"> </TD>
<TD VALIGN="bottom" ALIGN="right">100</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">(3)</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">(3)</TD></TR>
<TD VALIGN="top" WIDTH="27%"> Other losses</TD>
<TR>
<TD VALIGN="top" WIDTH="27%"> Prior period development (4)</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. </TD></T
<TR>
<TD ALIGN="left" VALIGN="top">Reported in press release on January 27, 2003. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Reported in press release on September 18, 2002. Total after tax of $90 million includes Overseas General and Global Reinsurance. </TD></TR></TABL
<TR>
<TD ALIGN="left" VALIGN="top">Prior period development for the Financial Services segment was favorable $2 million in 3Q-03, favorable $9 million in 2Q-03, adverse $10 million 1Q-03 a
both 4Q and 3Q 2002. Year to date 2003 is favorable $1 million compared with adverse of $27 million in 2002. Full year 2002 was adverse $30 million. </TD></TR></TABLE> <F
ALIGN="center">Computation of Basic and Diluted Earnings Per Share 
dollars, except share and per share data) (Unaudited) 
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<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Three months ended Sept. 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Nine months ended Sept. 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Numerator</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Income excluding net realized gains (losses)</TD>
<TD VALIGN="top" WIDTH="43%"> Perpetual preferred dividend</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Mezzanine equity dividend</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Income to ordinary shares, excl. net realized gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Net realized gains (losses), net of income tax</TD>
<TR>
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<TD VALIGN="top" WIDTH="43%"> Net income available to the holders of ordinary shares</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="43%"> Rollforward of ordinary shares</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Ordinary sharesbeginning of period</TD>
<TD VALIGN="top" WIDTH="43%"> Mezzanine equity conversion</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Issued under employee stock purchase plan</TD>
<TD VALIGN="top" WIDTH="43%"> Stock (cancelled) granted</TD>
<TD VALIGN="bottom" WIDTH="2%" ALIGN="right">(58,995</TD>
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<TR>
<TD VALIGN="top" WIDTH="43%"> Issued for option exercises</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Ordinary sharesend of period</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="43%"> Denominator</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Weighted average shares outstanding</TD>
<TD VALIGN="top" WIDTH="43%"> Dilutive effect of mezzanine equity</TD>
<TR>
<TD VALIGN="top" WIDTH="43%"> Effect of other dilutive securities</TD>
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<TR>
<TR>
<TR>
<TR>
<TD VALIGN="bottom" WIDTH="1%"> </TD>
<TD VALIGN="bottom" WIDTH="1%" ALIGN="right">93%</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%"> </TD>
<TR>
<TR>
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SIZE="2">Adj. wtd. avg. shares outstanding and assumed conversions</TD>
SIZE="2">Basic earnings (loss) per share</TD>
SIZE="2">Income excluding net realized gains (losses)</TD>
SIZE="2">% Change</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
34 of 179
SIZE="2">Diluted earnings (loss) per share</TD>
SIZE="2">Income excluding net realized gains (losses)</TD>
SIZE="2">% Change</TD>
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<TR>
ALIGN="center">Summary Consolidated Balance Sheets (in millions
 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">September 30 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">June 30 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">March 31 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 31 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="40%"> Assets</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">(Unaudited</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">(Audited</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">(Audited</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="1%">)</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="40%"> Fixed maturities available for sale, at fair value</TD>
<TD VALIGN="top" WIDTH="40%"> Equity securities, at fair value</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Securities on loan, at fair value</TD>
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<TR>
<TR>
<TR>
36 of 179
Roman" SIZE="2">Short-term investments</TD>
Roman" SIZE="2">Other investments, at fair value</TD>
Roman" SIZE="2">Cash</TD>
Roman" SIZE="2">Total investments and cash</TD>
Roman" SIZE="2">Insurance and reinsurance balances receivable</TD>
Roman" SIZE="2">Reinsurance recoverable</TD>
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<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Deferred policy acquisition costs</TD>
Roman" SIZE="2">Prepaid reinsurance premiums</TD>
Roman" SIZE="2">Goodwill</TD>
Roman" SIZE="2">Deferred tax assets</TD>
Roman" SIZE="2">Other assets</TD>
Roman" SIZE="2">Total assets</TD>
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<TR>
<TR>
<TR>
<TR>
38 of 179
Roman" SIZE="2">Liabilities</TD>
Roman" SIZE="2">Unpaid losses and loss expenses</TD>
Roman" SIZE="2">Unearned premiums</TD>
Roman" SIZE="2">Future policy benefits for life and annuity contracts</TD>
Roman" SIZE="2">Insurance and reinsurance balances payable</TD>
Roman" SIZE="2">Contract holder deposit funds</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="40%"> Securities lending collateral</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Accounts payable, accrued expenses and other liabilities</TD>
<TD VALIGN="top" WIDTH="40%"> Short-term debt</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Long-term debt</TD>
<TD VALIGN="top" WIDTH="40%"> Trust preferred securities</TD>
<TR>
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<TD VALIGN="top" WIDTH="40%"> Total liabilities</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Mezzanine equity</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Shareholders equity</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Total shareholders equity, excl. AOCI</TD>
<TD VALIGN="top" WIDTH="40%"> Accumulated other comprehensive income (AOCI)</TD>
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<TR>
<TR>
<TR>
<TR>
41 of 179
Roman" SIZE="2">Total shareholders equity</TD>
Roman" SIZE="2">Total liabilities, mezzanine equity and shareholders equity</TD>
Roman" SIZE="2">Diluted book value per ordinary share</TD>
Roman" SIZE="2">Diluted tangible book value per ordinary share</TD>
8/12/11 3:49 PM

ALIGN="center">Consolidated Premiums Line of Business (in millio
STYLE="margin-top:0px;margin-bottom:0px">ACE Limited Consolidated 
<TR>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center"> YTD % of Total Consolidated<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center"> YTD % of Total Consolidated<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> % Change YTD-03 vs. YTD-02<HR SIZE="1" NOSHADE COLOR="#00000
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">Full Year 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="44%"> Net Premiums Written</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Property and all other</TD>
<TD VALIGN="top" WIDTH="44%"> Casualty</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Personal accident</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Total P&C</TD>
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<TR>
<TD VALIGN="top" WIDTH="44%"> Global Relife</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Financial guaranty</TD>
<TD VALIGN="top" WIDTH="44%"> Financial solutions</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Total Consolidated</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Net Premiums Earned</TD>
<TR>
<TD VALIGN="bottom" WIDTH="44%"> Property and all other</TD>
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<TD VALIGN="bottom" WIDTH="44%"> Casualty</TD>
<TR>
<TD VALIGN="bottom" WIDTH="44%"> Personal accident</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Total P&C</TD>
<TR>
<TD VALIGN="bottom" WIDTH="44%"> Global Relife</TD>
<TR>
<TD VALIGN="bottom" WIDTH="44%"> Financial guaranty</TD>
<TD VALIGN="bottom" WIDTH="44%"> Financial solutions</TD>
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<TR>
<TD VALIGN="top" WIDTH="44%"> Total Consolidated</TD>
<TR>
ALIGN="center">Consolidating Statement of Operations Three months ended September 30, 2003 and 2002 (i
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> Insurance North American<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
FACE="Times New Roman" SIZE="1">Overseas General<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Global Reinsurance <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Corporate & Other <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Consolidated P&C <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Financial Services <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">ACE Consolidated <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="21%"> September 30, 2003</TD>
<TR>
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<TR>
<TR>
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<TR>
<TD VALIGN="top" WIDTH="21%"> Underwriting income (loss)</TD>
<TR>
<TD VALIGN="top" WIDTH="21%"> Life underwriting income</TD>
<TR>
<TD VALIGN="top" WIDTH="21%"> Net investment incomeproperty and casualty</TD>
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<TD VALIGN="top" WIDTH="21%"> Other income (expense)</TD>
<TD VALIGN="bottom" ALIGN="right">(1</TD>
<TR>
<TD VALIGN="top" WIDTH="21%"> Interest expense</TD>
<TD VALIGN="top" WIDTH="21%"> Income tax expense (benefit)</TD>
<TR>
<TD VALIGN="top" WIDTH="21%"> Income (loss) excluding net realized gains (losses)</TD>
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<TR>
<TR>
<TD VALIGN="top" WIDTH="21%"> Net income (loss)</TD>
<TR>
49 of 179
8/12/11 3:49 PM

<TR>
<TR>
50 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
51 of 179
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="21%"> Life underwriting income (loss)</TD>
<TR>
<TR>
52 of 179
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<TR>
<TR>
<TR>
53 of 179
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<TR>
ALIGN="center">Consolidating Statement of Operations Nine months ended September 30, 2003 and 2002 (in
<TR>
FACE="Times New Roman" SIZE="1">North American<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
FACE="Times New Roman" SIZE="1">Overseas General<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Global Reinsurance <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Corporate & Other <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Consolidated P&C <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Financial Services <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">ACE Consolidated <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
54 of 179
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<TR>
<TR>
<TR>
55 of 179
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<TR>
<TR>
56 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
57 of 179
8/12/11 3:49 PM

<TR>
<TR>
58 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
59 of 179
8/12/11 3:49 PM

<TR>
<TR>
60 of 179
8/12/11 3:49 PM
<TR>
<TR>
61 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
62 of 179
Roman" SIZE="2">Income tax expense (benefit)</TD>
Roman" SIZE="2">Income (loss) excluding net realized gains (losses)</TD>
Roman" SIZE="2">Net realized gains (losses)</TD>
8/12/11 3:49 PM

<TR>
<TR>
ALIGN="center">Segment ResultsConsecutive Quarters (in mil
STYLE="margin-top:0px;margin-bottom:0px">Insurance-North American 
<TR>
63 of 179
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<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">YTD 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Full Year 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="right">1,640</TD>
<TR>
<TR>
64 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
65 of 179
Roman" SIZE="2">Underwriting income (loss)</TD>
Roman" SIZE="2">Net investment incomeproperty and casualty</TD>
8/12/11 3:49 PM

<TR>
<TR>
66 of 179
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="23%"> Income (loss) excluding net realized gains (losses)</TD>
<TD VALIGN="bottom" ALIGN="right">(236</TD>
<TD VALIGN="bottom" ALIGN="right">97</TD>
<TR>
<TR>
67 of 179
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<TR>
<TR>
68 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
<TD VALIGN="top" NOWRAP WIDTH="23%"> Administrative expense ratio</TD>
SIZE="2">Combined ratio</TD>
Roman" SIZE="2">Large losses and other items</TD>
Roman" SIZE="2">Large losses (before tax)</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="23%"> % Change Versus Prior Year Period</TD>
<TD VALIGN="bottom" ALIGN="right">49%</TD>
<TR>
70 of 179
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<TR>
<TD VALIGN="top" WIDTH="23%"> Other Ratios</TD>
<TD VALIGN="top" WIDTH="23%"> Net premiums written/gross premiums written</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Reported in press release on January 27, 2003. </TD></TR></TABLE> 
STYLE="margin-top:0px;margin-bottom:0px">Insurance - Overseas General 
<TR>
71 of 179
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<TR>
<TR>
<TR>
72 of 179
8/12/11 3:49 PM

<TR>
<TR>
73 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
74 of 179
8/12/11 3:49 PM

<TR>
<TR>
75 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
76 of 179
Roman" SIZE="2">Combined ratio</TD>
Roman" SIZE="2">Loss and loss expense ratio</TD>
Roman" SIZE="2">Policy acquisition cost ratio</TD>
Roman" SIZE="2">Administrative expense ratio</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="23%"> Large losses (before tax)</TD>
<TR>
<TD VALIGN="top" WIDTH="23%"> % Change Versus Prior Year Period</TD>
77 of 179
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<TR>
<TR>
78 of 179
Roman" SIZE="2">Other Ratios</TD>
8/12/11 3:49 PM
<TD VALIGN="top" WIDTH="23%"> Net premiums written/gross premiums written</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Reported in press release on September 18, 2002. Total after tax of $90M includes $61M in Overseas General and $29M in Global Reinsurance. </TD></
[GRAPHIC APPEARS HERE] 
ACE Limited Segment ResultsConsecutive Quarters2 
dollars) (Unaudited) </F
STYLE="margin-top:0px;margin-bottom:0px">InsuranceOverseas General 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Full Year 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="28%"> Gross premiums written</TD>
<TR>
<TD VALIGN="top" WIDTH="28%"> ACE Global Markets</TD>
<TD VALIGN="top" WIDTH="28%"> ACE International</TD>
79 of 179
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<TR>
<TR>
<TR>
80 of 179
SIZE="2">Total</TD>
SIZE="2">Net premiums written</TD>
SIZE="2">ACE Global Markets</TD>
SIZE="2">ACE International</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TR>
81 of 179
SIZE="2">Net premiums earned</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="28%"> Total</TD>
<TR>
<TD VALIGN="top" WIDTH="28%"> Net premiums written/gross premiums written</TD>
<TR>
82 of 179
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<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">54.2%</TD></TR>
<TR>
<TR>
<TR>
83 of 179
SIZE="2">Total NPW/GPW</TD>
SIZE="2">Loss ratio</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TR>
84 of 179
SIZE="2">Total loss ratio</TD>
SIZE="2">Expense ratio</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="28%"> Total expense ratio</TD>
<TR>
<TD VALIGN="top" WIDTH="28%"> Combined ratio</TD>
85 of 179
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<TR>
<TR>
<TD VALIGN="top" WIDTH="28%"> Total combined ratio</TD>
<TR>
STYLE="margin-top:0px;margin-bottom:0px">Global Reinsurance 
86 of 179
8/12/11 3:49 PM
<TR>
<TD VALIGN="top" WIDTH="29%"> Property and casualty</TD>
<TR>
<TR>
87 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
88 of 179
Roman" SIZE="2">P&C underwriting income (loss)</TD>
Roman" SIZE="2">Life</TD>
8/12/11 3:49 PM

<TR>
<TR>
89 of 179
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="29%"> Net investment income</TD>
<TR>
<TD VALIGN="top" WIDTH="29%"> Life underwriting income (loss)</TD>
<TR>
<TD VALIGN="top" WIDTH="29%"> Total underwriting income</TD>
90 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
91 of 179
8/12/11 3:49 PM

<TR>
<TR>
92 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
93 of 179
Roman" SIZE="2">P&C combined ratio</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="29%"> P&C combined ratio</TD>
<TR>
<TD VALIGN="top" WIDTH="29%"> Large losses (before tax)</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Reported in press release on September 18, 2002. Total after tax of $90M million includes $61M in Overseas General and $29M in Global Reinsurance. Global ReinsuranceProperty & Casualty </
<TR>
94 of 179
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<TD VALIGN="top" WIDTH="28%"> % Change Versus Prior Year Period</TD>
<TR>
<TD VALIGN="bottom" WIDTH="2%" ALIGN="right">93%</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="28%"> Other Ratios</TD>
95 of 179
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<TR>
<TR>
<TR>
<TR>
<TR>
96 of 179
SIZE="2">Net premiums written/gross premiums written</TD>
SIZE="2">Global ReinsuranceBy Division</TD>
SIZE="2">Gross premiums written</TD>
SIZE="2">Tempest Europe</TD>
SIZE="2">Tempest USA</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="28%"> Tempest Bermuda</TD>
<TR>
<TD VALIGN="top" WIDTH="28%"> Total GPW</TD>
<TR>
<TD VALIGN="top" WIDTH="28%"> Net premiums written</TD>
<TR>
97 of 179
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<TR>
<TR>
<TR>
98 of 179
SIZE="2">Tempest Bermuda</TD>
SIZE="2">Total NPW</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TR>
99 of 179
SIZE="2">Net premiums earned</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TR>
100 of 179
SIZE="2">Total NPE</TD>
SIZE="2">Net premiums written/gross premiums written</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="28%"> Total NPW/GPW</TD>
<TR>
STYLE="margin-top:0px;margin-bottom:0px">Financial Services 
<TR>
101 of 179
8/12/11 3:49 PM

<TR>
<TR>
102 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TR>
103 of 179
Roman" SIZE="2">Underwriting income (loss)</TD>
Roman" SIZE="2">Other income</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="31%"> Income tax expense</TD>
<TR>
104 of 179
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="31%"> Tax effect of net realized gains (losses)</TD>
<TR>
<TR>
105 of 179
8/12/11 3:49 PM

<TR>
<TR>
106 of 179
Roman" SIZE="2">Combined ratio</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TD VALIGN="top" WIDTH="31%"> Loss portfolio transfers(1)</TD>
107 of 179
8/12/11 3:49 PM
<TR>
<TD VALIGN="bottom" ALIGN="right">-78%</TD>
<TR>
<TR>
108 of 179
Roman" SIZE="2">% Change Versus Prior Year Period</TD>
Roman" SIZE="2">Other Ratios</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="31%"> Net premiums written/gross premiums written</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued
</TD></TR></TABLE> 
STYLE="margin-top:0px;margin-bottom:0px">Financial Services 
<TR>
<TD VALIGN="top" WIDTH="26%"> Gross premiums written</TD>
<TR>
109 of 179
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<TR>
<TR>
<TR>
110 of 179
SIZE="2">Financial solutions</TD>
SIZE="2">Total GPW</TD>
SIZE="2">Net premiums written</TD>
SIZE="2">Financial guaranty</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="26%"> Total NPW</TD>
<TR>
<TD VALIGN="top" WIDTH="26%"> Net premiums earned</TD>
111 of 179
8/12/11 3:49 PM

<TR>
<TR>
<TD VALIGN="top" WIDTH="26%"> Total NPE</TD>
<TR>
112 of 179
8/12/11 3:49 PM

<TR>
<TR>
113 of 179
SIZE="2">Loss ratio</TD>
SIZE="2">Total loss ratio</TD>
8/12/11 3:49 PM

<TR>
<TR>
<TR>
114 of 179
SIZE="2">Expense ratio</TD>
SIZE="2">Total expense ratio</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="26%"> Combined ratio</TD>
<TR>
<TR>
115 of 179
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<TD VALIGN="top" WIDTH="26%"> Total combined ratio</TD>
<TR>
ALIGN="center">Financial Guaranty Profile (in millions of U.S. d
<TR>
<TD VALIGN="bottom" COLSPAN="9" ALIGN="center">Gross Par Written (7) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="13" ALIGN="center">Net Par Outstanding/Average Ratings <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center">Three months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center">Nine months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD COLSPAN="13" VALIGN="bottom"> </TD></TR>
<TR>
<TD VALIGN="bottom" ROWSPAN="2" WIDTH="17%"> Sector<HR WIDTH="35" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="9" ALIGN="center">September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">December 31, 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Par Outstanding <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">% of total <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">Average Rating <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center"> % of total<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center"> Average <FO
SIZE="1">Rating<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="17%"> Municipal Exposure</TD>
116 of 179
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<TR>
<TD VALIGN="top" WIDTH="17%"> Tax Backed</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A+</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A+</TD></TR>
<TD VALIGN="top" WIDTH="17%"> Municipal Utilities</TD>
<TR>
<TD VALIGN="top" WIDTH="17%"> Special Revenue</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A</TD></TR>
<TD VALIGN="top" WIDTH="17%"> Healthcare</TD>
<TR>
<TD VALIGN="top" WIDTH="17%"> Structured Municipal (1)</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AAA</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AAA</TD></TR>
<TD VALIGN="top" WIDTH="17%"> Other Municipal (2)</TD>
117 of 179
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<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A-</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A-</TD></TR>
<TR>
<TR>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AA+</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AA+</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">A</TD>
118 of 179
SIZE="2">Total Municipal</TD>
SIZE="2">Non-Municipal Exposure</TD>
SIZE="2">Senior Layer CDOs (3)</TD>
SIZE="2">Consumer Receivables (4)</TD>
8/12/11 3:49 PM
<TD VALIGN="top" WIDTH="17%"> Single Name Corporate CDS</TD>
<TR>
<TD VALIGN="top" WIDTH="17%"> Commercial Receivables (5)</TD>
<TD VALIGN="top" WIDTH="17%"> Other Structured Finance (6)</TD>
<TR>
<TD VALIGN="top" WIDTH="17%"> Funded Equity CDOs (3)</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">NM</TD></TR>
<TR>
<TD VALIGN="top" NOWRAP WIDTH="17%"> Total Non-Municipal</TD>
119 of 179
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<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AA-</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">AA-</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="17%"> Total Exposure</TD>
<TR>
<TR>
<TD ALIGN="left" VALIGN="top">Structured Municipal: includes excess of loss reinsurance on portfolios of municipal credits where the company attached in excess of the AAA rating level
<TR>
<TD ALIGN="left" VALIGN="top">Other Municipal: primarily includes first mortgage bonds on investor-owned utilities and government-sponsored project finance. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">For ACE, collateralized debt obligations (CDOs) are structured financings backed by a pool of investment grade assets. These financings are typical
tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches. Market supply and demand
and the amount and position in the structure where ACE chooses to participate. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Consumer Receivables: principally includes auto loan receivables, residential mortgage-backed securities and credit card receivables. </TD></TR></
<TR>
<TD ALIGN="left" VALIGN="top">Commercial Receivables: principally includes equipment leases and commercial mortgage-backed securities. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Other Structured Finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions. </TD></TR></TAB
<TR>
<TD ALIGN="left" VALIGN="top">Gross par approximates net par as the company is a net line writer. </TD></TR></TABLE> 
STYLE="margin-top:0px;margin-bottom:0px">NoteRatings are internally determined based on rating agency guidelines Financial Guaranty Profile2 (in millions of
STYLE="margin-top:0px;margin-bottom:0px">Distribution by Ratings of Financial Guaranty Portfolio </
<TR>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center">At September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Par Outstanding <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">% of total <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="73%"> AAA</TD>
120 of 179
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<TR>
<TD VALIGN="top" WIDTH="73%"> AA</TD>
<TD VALIGN="top" WIDTH="73%"> A</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> BBB</TD>
<TD VALIGN="top" WIDTH="73%"> Below investment grade</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> Funded equity</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> Total</TD>
<TR>
</TABLE> Geographic Distribution of
Financial Guaranty Portfolio as of September 30, 2003 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Par Outstanding <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">% of total <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="78%"> Domestic</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> California</TD>
<TD VALIGN="top" WIDTH="78%"> New York</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Texas</TD>
<TD VALIGN="top" WIDTH="78%"> Illinois</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Florida</TD>
<TD VALIGN="top" WIDTH="78%"> Pennsylvania</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> New Jersey</TD>
<TD VALIGN="top" WIDTH="78%"> Massachusetts</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Puerto Rico</TD>
<TD VALIGN="top" WIDTH="78%"> Washington</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> OtherMuni</TD>
121 of 179
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="78%"> OtherNon Muni</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Total Domestic</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Overall Net Par Outstanding</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> International</TD>
<TD VALIGN="top" WIDTH="78%"> United Kingdom</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Australia</TD>
<TD VALIGN="top" WIDTH="78%"> Italy</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> France</TD>
<TD VALIGN="top" WIDTH="78%"> Brazil</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Other</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Total International</TD>
<TR>
<TD VALIGN="top" WIDTH="78%"> Net Par Outstanding</TD>
<TR>
ALIGN="center">Financial Services Portfolio 25 Largest Municipal
(in millions of U.S. dollars) (Unaudited) 
<TR>
<TD VALIGN="bottom" WIDTH="81%"> Obligor Name<HR SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Par In Force (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">Rating <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="81%"> California State General Obligation & Leases</TD>
122 of 179
8/12/11 3:49 PM

<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">BBB</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">A-</TD></TR>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">AA</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">A</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">A+</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">AA-</TD></TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
123 of 179
SIZE="2">Long Island Power Authority</TD>
SIZE="2">New Jersey State General Obligation & Leases</TD>
SIZE="2">New York City General Obligation</TD>
SIZE="2">Denver Colorado Airport System</TD>
SIZE="2">Chicago Illinois General Obligation</TD>
SIZE="2">Puerto Rico Electric Power Authority</TD>
SIZE="2">Massachusetts State GO & Bay Transportation & Leases</TD>
SIZE="2">New York State Metro Trans AuthTrans Revenue</TD>
SIZE="2">New York City Municipal Water Finance Authority</TD>
SIZE="2">San Francisco California Airport</TD>
SIZE="2">New York State General Obligation & Leases</TD>
SIZE="2">Jefferson County Alabama Sewer</TD>
SIZE="2">Energy Northwest (FKA WPPSS)</TD>
SIZE="2">Puerto Rico General Obligation & Leases</TD>
SIZE="2">Houston Texas Water & Sewer System</TD>
SIZE="2">Dade County Florida Water & Sewer System</TD>
SIZE="2">Los Angeles County Metro TransSales Tax1st</TD>
SIZE="2">Mental Health Services FacilitiesNew York</TD>
SIZE="2">Intermountain Power Agency</TD>
SIZE="2">Illinois State General Obligation & Leases</TD>
SIZE="2">Chicago Illinois Public BuildingBoard of Education</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="81%"> Municipal Electric Authority of GeorgiaSenior</TD>
<TR>
<TD VALIGN="top" WIDTH="81%"> New Jersey State Turnpike</TD>
<TD VALIGN="top" WIDTH="81%"> District of Columbia General Obligation</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company </TD></TR></TABLE> Financial Services Portfolio (in millions of U.S.
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Unaudited) 25 Largest Asset-Backed Exposures (NonMunicipal) 
<TR>
<TD VALIGN="bottom" WIDTH="85%"> Obligor Name<HR WIDTH="75" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Par In Force <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="85%"> Absolute CDO OF ABS</TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">AAA</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="85%"> Triplas CDO OF ABS</TD>
<TD VALIGN="top" WIDTH="85%"> Sears Credit Card Master Trust 2002-3 Class ACredit Cards</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> SALS 2002-6 (Super Senior)Synthetic CDO</TD>
<TD VALIGN="top" WIDTH="85%"> Taurus 2001-06Synthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Bistro 2001-09AAA TrancheSynthetic CDO</TD>
<TD VALIGN="top" WIDTH="85%"> Dresdner 20011Synthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Houston CDO Portfolio 2000-1</TD>
<TD VALIGN="top" WIDTH="85%"> Stars 2001-3Synthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Merrill Lynch Dots 4Synthetic CDO</TD>
<TD VALIGN="top" WIDTH="85%"> Providian Gateway Master TrustCredit Cards</TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">BB+</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="85%"> CDO ^2CDO of CDOs</TD>
<TD VALIGN="top" WIDTH="85%"> Merrill Lynch Synthetic CDO Taurus 8</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Magrathea VSynthetic CDO</TD>
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<TD VALIGN="top" WIDTH="85%"> Lehman Sprint 2001-1 Super SeniorSynthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Taurus 2001-01Synthetic CDO</TD>
<TD VALIGN="top" WIDTH="85%"> Lehman Synthetic CDO Portfolio 2000-1</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> ING Equity Trust (Pilgrim Principal Protection)</TD>
<TD VALIGN="top" WIDTH="85%"> Bistro 2000-07 Class A-1Synthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> Halcyon Synthetic CDO</TD>
<TD VALIGN="top" WIDTH="85%"> Europa II Limited Class A1Synthetic CDO</TD>
<TR>
<TD VALIGN="top" WIDTH="85%"> EMMOCA IV PortfolioSynthetic CDO</TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">AA+</TD></TR>
<TD VALIGN="top" WIDTH="85%"> Metris Master Credit Card TrustCredit Cards</TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="4%">BB</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="85%"> Lusitano Global Synthetic CDO Class A-2</TD>
<TD VALIGN="top" WIDTH="85%"> TIAA Commercial Real Estate CDO 2002-1 Limited</TD>
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Unaudited) Largest Single Name Corporate CDS 
<TR>
<TD VALIGN="bottom" WIDTH="82%"> Obligor Name<HR WIDTH="77" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Par In Force (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="82%"> General Electric Company</TD>
<TR>
<TD VALIGN="top" WIDTH="82%"> General Motors Corporation</TD>
<TD VALIGN="top" WIDTH="82%"> ABN AMRO Bank NV</TD>
<TR>
<TD VALIGN="top" WIDTH="82%"> Japan Republic Sovereign Obligation</TD>
<TD VALIGN="top" WIDTH="82%"> American International Group, Inc. (AIG)</TD>
<TR>
<TD VALIGN="top" WIDTH="82%"> Fortis NV</TD>
<TD VALIGN="top" WIDTH="82%"> Allianz AG</TD>
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<TR>
<TD VALIGN="top" WIDTH="82%"> FNMAFannie Mae</TD>
<TD VALIGN="top" WIDTH="82%"> France Telecom</TD>
<TR>
<TD VALIGN="top" WIDTH="82%"> Merrill Lynch & Company</TD>
<TD VALIGN="top" WIDTH="82%"> Deutsche Telekom AG</TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="5%">BBB+</TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> Gross Par Written (2)<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD COLSPAN="2" VALIGN="bottom"> </TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Three months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Nine months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center"> Net Par Outstanding<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="66%"> Rating<HR WIDTH="36" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> September 30, $</TD>
<TD NOWRAP VALIGN="bottom" WIDTH="2%" ALIGN="right"> </TD>
<TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="66%"> Total</TD>
<TR>
<TR>
<TD ALIGN="left" VALIGN="top">Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company </TD></TR></TABLE>
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<TR>
<TD ALIGN="left" VALIGN="top">Gross par approximates net par as the company is a net line writer </TD></TR></TABLE> &
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Unaudited) Maturity Profile of Select Par Insured Categories 
<TR>
<TD VALIGN="bottom" COLSPAN="14" ALIGN="center">(Outstanding Net Par) <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">2003 (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">2007 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="55%"> Senior Layer CDOs</TD>
<TR>
<TD VALIGN="top" WIDTH="55%"> Beginning outstanding par</TD>
<TD VALIGN="top" WIDTH="55%"> Scheduled runoff amount</TD>
<TR>
<TD VALIGN="top" WIDTH="55%"> Ending outstanding par</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">16,494</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">8,153</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="55%"> Single Name Corporate CDS</TD>
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<TR>
<TR>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">629</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="55%"> Funded Equity CDOs</TD>
<TR>
<TR>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">50</TD></TR>
<TR>
<TD ALIGN="left" VALIGN="top">Beginning balance as of September 30, 2003 </TD></TR></TABLE> 
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<TR>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> Gross Par Written (2)<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="3" ALIGN="center"> Net Par Outstanding<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="66%"> CDOs<HR WIDTH="37" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Three months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Nine months ended <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="bottom" WIDTH="66%"> Rating<HR WIDTH="36" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> Sept. 30, 
<TR>
<TR>
<TD VALIGN="top" WIDTH="66%"> Funded Equity</TD>
<TR>
<TD VALIGN="top" WIDTH="66%"> Total</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Gross par approximates net par as the company is a net line writer </TD></TR></TABLE> &
ALIGN="center">Loss Reserve Rollforward (in millions of U.S. dol
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">
129 of 179
SIZE="1">Total <HR SIZE="1" NOSHADE COLOR="#000000"></TD>

SIZE="1">Ongoing <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Run-off (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Unpaid Losses <HR SIZE="1" NOSHADE COLOR="#000000"></TD>

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<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Gross <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Ceded <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="26%"> Balance at December 31, 2001</TD>
<TR>
<TD VALIGN="top" WIDTH="26%"> Losses and loss expenses incurred</TD>
<TD VALIGN="top" WIDTH="26%"> Losses and loss expenses paid</TD>
<TR>
<TD VALIGN="top" WIDTH="26%"> Other (incl. foreign exch. revaluation)</TD>
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<TR>
<TD VALIGN="top" WIDTH="26%"> Balance at March 31, 2002</TD>
<TR>
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<TR>
<TR>
132 of 179
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<TD VALIGN="top" WIDTH="26%"> Balance at June 30, 2002</TD>
<TR>
<TR>
133 of 179
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<TR>
<TD VALIGN="top" WIDTH="26%"> Balance at September 30, 2002</TD>
<TR>
134 of 179
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<TR>
<TR>
135 of 179
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<TR>
<TR>
136 of 179
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<TR>
<TR>
137 of 179
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<TR>
<TR>
138 of 179
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<TR>
139 of 179
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<TR>
<TR>
140 of 179
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<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The run-off reserves primarily include Brandywine group, the Commercial Insurance ServiceMiddle Market Workers Comp. reserves and the pre-199
reserves. Prior year split between gross and ceded reserves and loss activity in ongoing and run-off categories has been revised to properly reflect intercompany reinsurance eliminations. </TD></TR></TABLE> Asbestos and Environmental Reserves (in millions
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Asbestos <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center">Asbestos <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center">Gross 3 year survival ratio <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">Gross 1 year survival ratio <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">11.3x</TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="4%">12.0x</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="52%"> Prior period development</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
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<TR>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Environmental & Other Latent Exposures <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TR>
<TR>
<TR>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
144 of 179
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ALIGN="center">Reinsurance Recoverable Analysis (in millions of
STYLE="margin-top:0px;margin-bottom:0px">Net Reinsurance Recoverable by Division 
<TD VALIGN="top" WIDTH="56%"> Reinsurance recoverable on paid losses & loss expenses</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="56%"> Active operations</TD>
<TD VALIGN="top" WIDTH="56%"> Brandywine (1)</TD>
<TR>
<TD VALIGN="top" WIDTH="56%"> Westchester (2)</TD>
<TR>
<TR>
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<TR>
<TR>
<TR>
<TR>
<TR>
146 of 179
Roman" SIZE="2">Reinsurance recoverable on unpaid losses & loss expenses</TD>
Roman" SIZE="2">Active operations</TD>
Roman" SIZE="2">Brandywine (1)</TD>
Roman" SIZE="2">Westchester (2)</TD>
Roman" SIZE="2">Total</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
147 of 179
Roman" SIZE="2">Gross reinsurance recoverable</TD>
Roman" SIZE="2">Bad debt reserve</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
148 of 179
Roman" SIZE="2">Net reinsurance recoverable</TD>
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<TD VALIGN="top" WIDTH="56%"> Brandywine (1)</TD>
<TR>
<TD VALIGN="top" WIDTH="56%"> Westchester (2)</TD>
<TR>
<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The Companys obligations with respect to further funding of the Brandywine run-off are limited pursuant to the Brandywine Restructuring Order under
excess of loss reinsurance agreement. (Refer to the Asbestos and Environmental Claims section of the Managements Discussion and Analysis of Financial Conditions and Results of Operations inco
10-K for the year ended December 31, 2002 for additional information about the order and other Company obligations.) At September 30, 2003, approximately $492 million in losses and recoverable bad debt reserves were ceded
loss reinsurance agreement leaving a remaining limit of approximately $308 million. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At September 30, 2003,
reinsurance cover was approximately $600 million. </TD></TR></TABLE>
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"> Note:</TD>
<TD ALIGN="left" VALIGN="top">Active operations include the run-off operations of CIS. </TD></TR></TABLE> </FON
ALIGN="center">Reinsurance Recoverable Analysis2 (in milli
STYLE="margin-top:0px;margin-bottom:0px">Reinsurance Recoverable for Active Operations </FON
<TR>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center">June 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="73%"> Categories<HR WIDTH="60" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Recoverable <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Bad Debt <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">% of Gross <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="73%"> Top 10 reinsurers</TD>
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<TR>
<TD VALIGN="top" WIDTH="73%"> Other reinsurers balances >$20 million</TD>
<TD VALIGN="top" WIDTH="73%"> Other reinsurers balances <$20 million</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> Mandatory pools and government agencies</TD>
<TD VALIGN="top" WIDTH="73%"> Structured settlements</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> Captives</TD>
<TR>
<TD VALIGN="top" WIDTH="73%"> Total </TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="5%">4.9%</TD></TR>
<TR>
</TABLE> At June 30, 2003, $5.6
billion of the active operations recoverables were from rated reinsurers, of which 87% were rated A- or better by Standard & Poors. The Company held collateral of $2.1 billion, of which $1.4 billion was ma
existing recoverables. 
<TR>
<TD VALIGN="bottom" WIDTH="32%">Top 10 Reinsurers (net of collateral)</TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="32%">Other Reinsurers Balances Greater Than $20 million (net of collateral)</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> American International Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> ABB Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> FM Global Group</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> AXA</TD>
<TD VALIGN="bottom" WIDTH="32%"> AIOI Insurance</TD>
<TD VALIGN="bottom" WIDTH="32%"> Groupama</TD></TR>
<TD VALIGN="top" WIDTH="32%"> Berkshire Hathaway Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> Allianz Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> Independence Blue Cross (Amerihealth)</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="32%"> ING - Internationale Nederlanden Group</TD></TR>
<TD VALIGN="top" NOWRAP WIDTH="32%"> GE Global Insurance Group (Employers Re)</TD>
<TD VALIGN="bottom" WIDTH="32%"> Arch Capital</TD>
<TD VALIGN="bottom" WIDTH="32%"> Liberty Mutual Insurance Companies</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Hannover</TD>
<TD VALIGN="bottom" WIDTH="32%"> AVIVA</TD>
<TD VALIGN="bottom" WIDTH="32%"> Nisshin Fire and Marine</TD></TR>
<TD VALIGN="top" WIDTH="32%"> Lloyds of London</TD>
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<TD VALIGN="bottom" WIDTH="32%"> Chubb Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> Overseas Partners Ltd.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Munich Re</TD>
<TD VALIGN="bottom" WIDTH="32%"> CIGNA</TD>
<TD VALIGN="bottom" WIDTH="32%"> PMA Capital Insurance Company</TD></TR>
<TD VALIGN="top" WIDTH="32%"> St. Paul Companies</TD>
<TD VALIGN="bottom" WIDTH="32%"> CNA Insurance Companies</TD>
<TD VALIGN="bottom" WIDTH="32%"> QBE Insurance</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Swiss Re Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> Converium Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> RenaissanceRe Holdings Ltd</TD></TR>
<TD VALIGN="top" WIDTH="32%"> XL Capital Group</TD>
<TD VALIGN="top" WIDTH="32%"> DaimlerChrysler Group</TD>
<TD VALIGN="bottom" NOWRAP WIDTH="32%"> Royal & Sun Alliance Insurance Group plc</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="32%"> Dorinco Reinsurance Co.</TD>
<TD VALIGN="bottom" WIDTH="32%"> SCOR Group</TD></TR>
<TD VALIGN="bottom" WIDTH="32%"> Electric Insurance Company</TD>
<TD VALIGN="bottom" WIDTH="32%"> Toa Reinsurance Company</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="32%"> EQUITAS</TD>
<TD VALIGN="bottom" WIDTH="32%"> Trenwick Group</TD></TR>
<TD VALIGN="bottom" WIDTH="32%"> Everest Re Group</TD>
<TD VALIGN="bottom" WIDTH="32%"> WR Berkley Corp</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="32%"> Fairfax Financial</TD>
<TD VALIGN="bottom" WIDTH="32%"> Zurich Financial Services Group</TD></TR>
STYLE="margin-top:0px;margin-bottom:0px">Consolidated Reinsurance Recoverable 
<TR>
<TR>
<TD VALIGN="bottom" WIDTH="72%"> Categories<HR WIDTH="60" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Recoverable <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Bad Debt <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center">% of Gross <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="72%"> Top 10 reinsurers</TD>
<TR>
<TD VALIGN="top" WIDTH="72%"> Other reinsurers balances >$20 million</TD>
<TD VALIGN="top" WIDTH="72%"> Other reinsurers balances <$20 million</TD>
<TR>
<TD VALIGN="top" WIDTH="72%"> Mandatory pools and government agencies</TD>
<TR>
<TD VALIGN="top" WIDTH="72%"> Captives</TD>
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<TR>
<TD VALIGN="top" WIDTH="72%"> Total</TD>
<TR>
</TABLE> At June 30, 2003,
$10.0 billion of consolidated recoverables were from rated reinsurers, of which 91% were rated A- or better by Standard & Poors. </FON
<TR>
<TD VALIGN="bottom">Top 10 Reinsurers (net of collateral)</TD>
<TD VALIGN="bottom" COLSPAN="3">Other Reinsurers Balances Greater Than $20 million (net of collateral)</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">American International Group</TD>
<TD VALIGN="bottom" WIDTH="25%">ABB Group</TD>
<TD VALIGN="bottom" WIDTH="26%">Independence Blue Cross (Amerihealth)</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">AXA</TD>
<TD VALIGN="bottom" WIDTH="25%">AIOI Insurance</TD>
<TD VALIGN="bottom" WIDTH="26%">INGInternationale Nederlanden Group</TD></TR>
<TD VALIGN="top" WIDTH="33%">Berkshire Hathaway Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="25%">Allianz Group</TD>
<TD VALIGN="bottom" WIDTH="26%">IRBBrasil Resseguros S.A.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">EQUITAS</TD>
<TD VALIGN="bottom" WIDTH="25%">Arch Capital</TD>
<TD VALIGN="bottom" WIDTH="26%">Liberty Mutual Insurance Companies</TD></TR>
<TD VALIGN="top" WIDTH="33%">GE Global Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="25%">AVIVA</TD>
<TD VALIGN="bottom" WIDTH="26%">Markel Corporation Group</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">Hannover</TD>
<TD VALIGN="bottom" WIDTH="25%">Chubb Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="26%">Nisshin Fire and Marine</TD></TR>
<TD VALIGN="top" WIDTH="33%">Lloyds of London</TD>
<TD VALIGN="bottom" WIDTH="25%">CIGNA</TD>
<TD VALIGN="bottom" WIDTH="26%">Overseas Partners Ltd.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">Munich Re</TD>
<TD VALIGN="bottom" WIDTH="25%">CNA Insurance Companies</TD>
<TD VALIGN="bottom" WIDTH="26%">PMA Capital Insurance Company</TD></TR>
<TD VALIGN="top" WIDTH="33%">St. Paul Companies</TD>
<TD VALIGN="bottom" WIDTH="25%">Converium Group</TD>
<TD VALIGN="bottom" WIDTH="26%">QBE Insurance</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="33%">Swiss Re Group</TD>
<TD VALIGN="bottom" WIDTH="25%">DaimlerChrysler Group</TD>
<TD VALIGN="bottom" WIDTH="26%">RenaissanceRe Holdings Ltd</TD></TR>
<TD VALIGN="bottom" WIDTH="25%">Dominion Ins. Co. Ltd.</TD>
<TD VALIGN="bottom" WIDTH="26%">Royal & Sun Alliance Insurance Group plc</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="25%">Dorinco Reinsurance Co.</TD>
<TD VALIGN="bottom" WIDTH="26%">SCOR Group</TD></TR>
<TD VALIGN="bottom" WIDTH="25%">Electric Insurance Company</TD>
<TD VALIGN="bottom" WIDTH="26%">Sompo Japan</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="25%">Everest Re Group</TD>
<TD VALIGN="bottom" WIDTH="26%">Toa Reinsurance Company</TD></TR>
<TD VALIGN="bottom" WIDTH="25%">Fairfax Financial</TD>
<TD VALIGN="bottom" WIDTH="26%">Travelers Property Casualty Group</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="25%">FM Global Group</TD>
<TD VALIGN="bottom" WIDTH="26%">Trenwick Group</TD></TR>
<TD VALIGN="bottom" WIDTH="25%">Gerling Group</TD>
152 of 179
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<TD VALIGN="bottom" WIDTH="26%">White Mountains Insurance Group</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="25%"> Great American P&C Insurance Companies</TD>
<TD VALIGN="bottom" WIDTH="26%">WR Berkley Corp</TD></TR>
<TD VALIGN="bottom" WIDTH="25%">Groupama</TD>
<TD VALIGN="bottom" WIDTH="26%">XL Capital Group</TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="25%">Hartford Insurance Group</TD>
<TD VALIGN="bottom" WIDTH="26%">Zurich Financial Services Group</TD></TR>
STYLE="margin-top:0px;margin-bottom:0px">Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses <FON
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">General Collections (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Other (2) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Total <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="69%"> Gross balance at December 31, 2002</TD>
<TR>
<TD VALIGN="top" WIDTH="69%"> Bad debt reserve at 12/31/02</TD>
<TD VALIGN="top" WIDTH="69%"> % of gross</TD>
<TR>
<TD VALIGN="top" WIDTH="69%"> Net balance at December 31, 2002</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="69%"> Gross balance at March 31, 2003</TD>
<TD VALIGN="top" WIDTH="69%"> Bad debt reserve at 3/31/03</TD>
<TR>
<TD VALIGN="top" WIDTH="69%"> % of gross</TD>
<TR>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
154 of 179
SIZE="2">Net balance at March 31, 2003</TD>
SIZE="2">Gross balance at June 30, 2003</TD>
SIZE="2">Bad debt reserve at 6/30/03</TD>
SIZE="2">% of gross</TD>
SIZE="2">Net balance at June 30, 2003</TD>
SIZE="2">Gross balance at September 30, 2003</TD>
SIZE="2">Bad debt reserve at 9/30/03</TD>
SIZE="2">% of gross</TD>
SIZE="2">Net balance at September 30, 2003</TD>
8/12/11 3:49 PM
<TD ALIGN="left" VALIGN="top">General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or c
debt reserves based primarily on the application of historical loss. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of th
credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees. </TD></TR></TABLE> 
ALIGN="center">Investment Portfolio1 (in millions of U.S.
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 31 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="56%"> Market Value</TD>
<TR>
<TD VALIGN="top" WIDTH="56%"> Fixed maturities</TD>
<TD VALIGN="top" WIDTH="56%"> Securities on loan</TD>
<TR>
<TD VALIGN="top" WIDTH="56%"> Short-term investments</TD>
<TD VALIGN="top" WIDTH="56%"> Cash</TD>
<TR>
<TR>
<TD VALIGN="top" WIDTH="56%"> Asset Allocation by Market Value</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
156 of 179
SIZE="2">Treasury</TD>
SIZE="2">Agency</TD>
SIZE="2">Corporate</TD>
SIZE="2">Mortgage-backed securities</TD>
SIZE="2">Asset-backed securities</TD>
SIZE="2">Municipal</TD>
SIZE="2">Non-US</TD>
SIZE="2">Cash & cash equivalent</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
157 of 179
SIZE="2">Credit Quality by Market Value</TD>
SIZE="2">AAA</TD>
SIZE="2">AA</TD>
SIZE="2">A</TD>
SIZE="2">BBB</TD>
SIZE="2">BB</TD>
SIZE="2">B</TD>
SIZE="2">Other</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
158 of 179
SIZE="2">Cost/Amortized Cost</TD>
SIZE="2">Fixed maturities</TD>
SIZE="2">Securities on loan</TD>
SIZE="2">Short term investments</TD>
SIZE="2">Cash</TD>
SIZE="2">Subtotal</TD>
SIZE="2">Equity securities</TD>
SIZE="2">Other investments</TD>
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<TR>
<TR>
<TD VALIGN="top" WIDTH="56%"> Avg. duration of fixed maturities, adj. for int. rate swaps</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">3.4 years</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">3.1 years</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="56%"> Avg. market yield of fixed maturities</TD>
<TD VALIGN="top" WIDTH="56%"> Avg. credit quality</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">AA</TD>
<TD VALIGN="bottom" WIDTH="4%" ALIGN="right">AA</TD></TR>
ACE Limited (in millions of U.S. dollars) (Unaudited) Investment portfolio Top 10 ExposuresFixed Maturity Investments and Single Name Credit Default Swaps 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="83%"> General Electric</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> General Motors</TD>
<TD VALIGN="top" WIDTH="83%"> Citigroup Inc</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> Verizon Communications</TD>
<TD VALIGN="top" WIDTH="83%"> AIG</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> HSBC Holdings Plc</TD>
<TD VALIGN="top" WIDTH="83%"> Ford Motor Co</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> Goldman Sachs Group</TD>
<TD VALIGN="top" WIDTH="83%"> Morgan Stanley</TD>
159 of 179
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<TR>
<TD VALIGN="top" WIDTH="83%"> Merrill Lynch</TD>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">March 31, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 31, 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TR>
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<TR>
<TD VALIGN="top" WIDTH="83%"> Bank of America</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> Wachovia Corp</TD>
<TD VALIGN="top" WIDTH="83%"> Wells Fargo</TD>
<TR>
<TD VALIGN="top" WIDTH="83%"> JP Morgan Chase</TD>
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">ACE Limited (in millions of U.S. dollars) (Unaudited) 
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Three months ended September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Nine months ended September 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Realized Gains (Losses) (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Unrealized Gains (Losses) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Impact <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" WIDTH="32%"> Investment Portfolio Gains (Losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Interest rate swaps</TD>
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<TR>
<TD VALIGN="top" WIDTH="32%"> Equity securities</TD>
<TD VALIGN="top" WIDTH="32%"> Equity and fixed income derivatives</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Foreign exchange gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Total inv. portfolio gains (losses)</TD>
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<TR>
<TD VALIGN="top" WIDTH="32%"> Credit default swaps (FAS 133 adjustment)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Total gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Income tax (expense) benefit</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Net gains (losses)</TD>
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<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The quarter includes impairments of $6M for fixed maturities and $7M for equities and $4M for other. Year to date includes impairments of $25M for fixed
equities and $20M for other. </TD></TR></TABLE> 
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Three months ended September 30, 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Nine months ended September 30, 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Investment Portfolio Gains (Losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Interest rate swaps</TD>
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<TR>
<TR>
<TR>
165 of 179
Roman" SIZE="2">Equity securities</TD>
Roman" SIZE="2">Equity and fixed income derivatives</TD>
Roman" SIZE="2">Foreign exchange gains (losses)</TD>
Roman" SIZE="2">Other</TD>
Roman" SIZE="2">Total inv. portfolio gains (losses)</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="32%"> Credit default swaps (FAS 133 adjustment)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Total gains (losses)</TD>
<TR>
<TD VALIGN="top" WIDTH="32%"> Income tax (expense) benefit</TD>
<TR>
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<TD VALIGN="top" WIDTH="32%"> Net gains (losses)</TD>
<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The quarter includes impairments of $33M for fixed maturities and $53M for equities. Year to date includes impairments of $76M for fixed maturities and $
</TD></TR></TABLE> 
 (in millions of U.S. dollars) 
<TR>
<TD VALIGN="top" WIDTH="48%"> Total short-term debt</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Total long-term debt (1)</TD>
<TR>
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<TD VALIGN="top" WIDTH="48%"> Total debt</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Total trust preferreds (2)</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Mezzanine equity (3)</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Perpetual preferred (4)</TD>
<TD VALIGN="top" WIDTH="48%"> Ordinary shareholders equity</TD>
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<TR>
<TR>
<TR>
<TR>
169 of 179
Roman" SIZE="2">Total shareholders equity</TD>
Roman" SIZE="2">Total capitalization</TD>
Roman" SIZE="2">Tangible shareholders equity (5)</TD>
Roman" SIZE="2">Leverage ratios</TD>
Roman" SIZE="2">Debt/ total capitalization</TD>
8/12/11 3:49 PM

<TD VALIGN="top" WIDTH="48%"> Debt plus trust preferreds/ total capitalization</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Debt/ tangible equity</TD>
<TD VALIGN="top" NOWRAP WIDTH="48%"> Debt plus trust preferreds and mezzanine equity/ tangible equity</TD>
<TR>
<TD VALIGN="top" WIDTH="48%"> Debt plus total preferred stock/ total capitalization</TD>
<TR>
<TD ALIGN="left" VALIGN="top">$50 million of ACE INA subordinated notes due 2009 was repaid in both the second and third quarters of 2002. An additional $500 million of Senior Debt wa
March 2002. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">$400 million of ACE INA Rhino Preferred Securities due 2002 was repaid in the second and third quarters of 2002. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">The FELINE PRIDES converted in the second quarter of 2003. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Preferred shares $575 million, net of issuance costs $18 million. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Tangible equity is equal to shareholders equity less goodwill. </TD></TR></TABLE> Non-GAAP Financial Measures and Comprehensive Income (in millions of U
(Unaudited) Regulation GNon-GAAP Financial Measures </FON
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be def
companies, are important for an understanding of our overall results of operations; however, they should not be viewed as a substitute for measures determined in accordance with GAAP. A reconciliation of book value per sh
per ordinary share is provided on page 33. The following non-GAAP measure is a common performance measurement and is defined as net income (loss) excluding net realized gains (losses) on investments and the tax effect of
on investments. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments because the amount of these gains (losses)
and fluctuates in part, according to the availability of market opportunities. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income excluding net
should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP). 
<TR>
170 of 179
SIZE="1">3Q-03 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>

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<TD VALIGN="top" WIDTH="40%"> Net income (loss), as reported</TD>
<TR>
<TR>
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standard</TD>
<TR>
<TR>
172 of 179
SIZE="2">Income (loss) excluding net realized gains (losses) and the cumulative effect of adopting a new acc
SIZE="2">Consolidated Statement of Comprehensive Income</TD>
SIZE="2">Net income (loss)</TD>
SIZE="2">Net unrealized appreciation (depreciation) on investments</TD>
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="40%"> Unrealized appreciation (depreciation) on investments</TD>
<TD VALIGN="top" WIDTH="40%"> Reclassification adjustment for net realized gains (losses) included in net income</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Cumulative translation adjustment</TD>
<TD VALIGN="top" WIDTH="40%"> Minimum pension liability adjustment</TD>
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<TR>
<TD VALIGN="top" WIDTH="40%"> Income tax (expense) benefit related to other comprehensive income items</TD>
<TR>
<TD VALIGN="top" WIDTH="40%"> Other comprehensive income (loss)</TD>
<TR>
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<TD VALIGN="top" WIDTH="40%"> Comprehensive income (loss)</TD>
<TR>
ALIGN="center">Diluted Book Value per Ordinary Share (in million
share and per share data) (Unaudited) Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share 
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">June 30 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">March 30 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 31 2002 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" WIDTH="44%"> Shareholders equity</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Net proceeds from assumed conversions of options</TD>
<TD VALIGN="top" WIDTH="44%"> Proceeds from issuance of preferred shares</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right"> </TD></TR>
<TR>
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<TD VALIGN="top" WIDTH="44%"> Conversion of mezzanine equity</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Numerator for diluted book value per share calculation</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Less: goodwill</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Numerator for diluted tangible book value per share</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Ordinary shares outstandingend of period</TD>
<TD VALIGN="bottom" WIDTH="3%" ALIGN="right">262,679,356</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="44%"> Shares issued from assumed conversions of options</TD>
<TD VALIGN="top" WIDTH="44%"> Shares issued on conversion of mezzanine equity</TD>
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<TR>
<TD VALIGN="top" WIDTH="44%"> Denominator for diluted and diluted tangible book value</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Book value per ordinary share</TD>
<TR>
<TD VALIGN="top" WIDTH="44%"> Diluted book value per ordinary share</TD>
<TD VALIGN="top" WIDTH="44%"> Diluted tangible book value per ordinary share</TD>
ALIGN="center">Statutory Accounting Principals to GAAP Reconciliation Reconciliation of Reinsurance Recoverable <
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">A significant amount of detail on a large portion of our reinsurance recoverables are disclosed in our US statutory annual rep
reconciliation of the amount reported in these reports to our total recoverable as of December 31, 2002 reported for GAAP purposes: 
<TR>
<TR>
purposes</TD>
177 of 179
Roman" SIZE="2">Total amounts reported for statutory purposes</TD>
Roman" SIZE="2">Less: the portion of the total balance that is intercompany and therefore eliminated for GAAP purposes
Roman" SIZE="2">Plus: amounts ceded to NICO which are not reported as reinsurance recoverables for statutory purposes<
Roman" SIZE="2">Plus: the amount of reserve and recoverable discounting included for statutory purposes which is added
8/12/11 3:49 PM

<TR>
<TD VALIGN="top" WIDTH="90%"> Total GAAP recoverables disclosed in US statutory reports</TD>
<TR>
<TD VALIGN="top" WIDTH="90%"> Other legal entities (1)</TD>
<TR>
<TD VALIGN="top" WIDTH="90%"> Total amounts reported for GAAP purposes (2)</TD>
<TR>
<TD VALIGN="top" WIDTH="90%"> Percentage disclosed in detail in US statutory annual reports</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Not subject to US statutory reporting requirements </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">The variance between the Statutory and GAAP balance relates to differences in accounting rules. Statutory rules allow the inclusion of affiliated balance
certain reserves and related recoverables. The statutory balance also excludes retroactive reinsurance contracts (NICO). </TD></TR></TABLE> </
 
<TD VALIGN="top" WIDTH="32%"> Annualized ROE:</TD>
<TD VALIGN="bottom" WIDTH="64%">Annualized return on ordinary shareholders equity income (loss) excluding net realized gains (losses) less perpetual preferred and mezzanine equi
average ordinary shareholders equity for the period. To annualize a quarterly rate multiply by four.</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Combined ratio:</TD>
<TD VALIGN="bottom" WIDTH="64%">The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial ser
operations.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Diluted book value per ordinary share:</TD>
<TD VALIGN="bottom" WIDTH="64%">Ordinary shareholders equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstandi
assumed issued.</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Diluted tangible book value per ordinary share:</TD>
<TD VALIGN="bottom" WIDTH="64%">Ordinary shareholders equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of sh
number of options assumed issued.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Effective tax rate:</TD>
<TD VALIGN="bottom" WIDTH="64%">Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> FAS 115:</TD>
<TD VALIGN="bottom" WIDTH="64%">Unrealized gains (losses) on investments and the deferred tax component included in shareholders equity.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Life underwriting income:</TD>
<TD VALIGN="bottom" WIDTH="64%">Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses.</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> NM:</TD>
<TD VALIGN="bottom" WIDTH="64%">Not meaningful.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Return on ordinary shareholders equity (ROE):</TD>
<TD VALIGN="bottom" WIDTH="64%">Income (loss) excluding net realized gains (losses) less perpetual preferred securities and mezzanine equity dividends divided by average ordinary shar
equity.</TD></TR>
<TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Ordinary shareholders equity:</TD>
<TD VALIGN="bottom" WIDTH="64%">Shareholders equity less perpetual preferred shares.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Property and casualty combined ratios:</TD>
<TD VALIGN="bottom" WIDTH="64%">Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios exclude life reinsurance business and financial services
<TR>
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<TR>
<TD VALIGN="top" WIDTH="32%"> Tangible equity:</TD>
<TD VALIGN="bottom" WIDTH="64%">Shareholders equity less goodwill.</TD></TR>
<TR>
<TD VALIGN="top" WIDTH="32%"> Total capitalization:</TD>
<TD VALIGN="bottom" WIDTH="64%">Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders equity.</TD></TR>
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</TEXT>
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-----BEGIN PRIVACY-ENHANCED MESSAGE----Proc-Type: 2001,MIC-CLEAR

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">

<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>

<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD>

<TD VALIGN="bottom"><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

Roman" SIZE="2">Administrative expenses</FONT></P></TD>

Roman" SIZE="2">Underwriting income</FONT></P></TD>

Roman" SIZE="2">Net investment income</FONT></P></TD>

Roman" SIZE="2">Other income (expense)</FONT></P></TD>

Roman" SIZE="2">Interest expense</FONT></P></TD>

Roman" SIZE="2">Income tax expense</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="11%" ><FONT SIZE="1">&nbsp;</FONT></TD>

<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD>

SIZE="2">Net income available to holders of Ordinary Shares</FONT></P></TD>

SIZE="2"><B><I>Diluted earnings per share:</I></B></FONT></P></TD>

SIZE="2">Weighted average diluted shares outstanding</FONT></P></TD>

SIZE="2">Loss and loss expense ratio</FONT></P></TD>

SIZE="2">Policy acquisition cost ratio</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>

Roman" SIZE="2"><B><U>Net Premiums Written</U></B></FONT></P></TD>

Roman" SIZE="2">Insurance&#151;North American</FONT></P></TD>

Roman" SIZE="2">Insurance&#151;Overseas General</FONT></P></TD>

Roman" SIZE="2">Global Reinsurance*</FONT></P></TD>

Roman" SIZE="2">Financial Services</FONT></P></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

Roman" SIZE="2"><B><U>Net Premiums Earned</U></B></FONT></P></TD>

Roman" SIZE="2">Insurance&#151;North American</FONT></P></TD>

Roman" SIZE="2">Insurance&#151;Overseas General</FONT></P></TD>

Roman" SIZE="2">Global Reinsurance*</FONT></P></TD>

Roman" SIZE="2">Financial Services</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="2%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">373</FONT></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1">&nbsp;</FONT></TD>

<TD VALIGN="bottom" WIDTH="2%" ><FONT SIZE="1">&nbsp;</FONT></TD>

Roman" SIZE="2"><B>Other Disclosures</B></FONT></P></TD>

Roman" SIZE="2">&#151;&nbsp;&nbsp;Non-GAAP Financial Measures and Comprehensive Income</FONT></P></TD>

Roman" SIZE="2">&#151;&nbsp;&nbsp;Diluted Book Value per Ordinary Share</FONT></P></TD>

Roman" SIZE="2">&#151;&nbsp;&nbsp;Statutory Accounting Principles to GAAP Reconciliation</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>

<TD VALIGN="top" WIDTH="43%"><FONT FACE="Times New Roman" SIZE="2">Combined ratio</FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>

<TD VALIGN="top" WIDTH="34%"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New

Roman" SIZE="2">Gross premiums written</FONT></P></TD>

Roman" SIZE="2">Net premiums written</FONT></P></TD>

Roman" SIZE="2">Net premiums earned</FONT></P></TD>

Roman" SIZE="2">Losses and loss expenses</FONT></P></TD>

Roman" SIZE="2">Policy acquisition costs</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="2%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">281</FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

Roman" SIZE="2">Life underwriting income (loss) excluding investment income</FONT></P></TD>

Roman" SIZE="2">Net investment income</FONT></P></TD>

Roman" SIZE="2">Other income (expense) (2)</FONT></P></TD>

Roman" SIZE="2">Interest expense</FONT></P></TD>

SIZE="2">Income tax expense (benefit)</FONT></P></TD>

SIZE="2"><B>Income (loss) excluding net realized gains (losses)</B></FONT></P></TD>

SIZE="2">Net realized gains (losses)</FONT></P></TD>

SIZE="2">Tax effect of net realized gains (losses)</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1">&nbsp;</FONT></TD>

Roman" SIZE="2">Gross premiums written</FONT></P></TD>

Roman" SIZE="2">Net premiums written</FONT></P></TD>

Roman" SIZE="2">Net premiums earned</FONT></P></TD>

<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="11%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1"> </FONT></TD>

Roman" SIZE="2">InsuranceNorth American</FONT></P></TD>

Roman" SIZE="2">InsuranceOverseas General</FONT></P></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

Roman" SIZE="2">InsuranceNorth American</FONT></P></TD>

Roman" SIZE="2">InsuranceOverseas General</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="2%" ><FONT SIZE="1"> </FONT></TD>

Roman" SIZE="2"> Non-GAAP Financial Measures and Comprehensive Income</FONT></P></TD>

Roman" SIZE="2"> Diluted Book Value per Ordinary Share</FONT></P></TD>

Roman" SIZE="2"> Statutory Accounting Principles to GAAP Reconciliation</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom"><FONT SIZE="1"> </FONT></TD></TR>

<TD VALIGN="bottom" WIDTH="4%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="7%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="7%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="11%" ><FONT SIZE="1"> </FONT></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD></TR>

<TD VALIGN="bottom" WIDTH="11%" ><FONT SIZE="1"> </FONT></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="7%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="7%" ><FONT SIZE="1"> </FONT></TD>

Roman" SIZE="2">Total shareholders equity</FONT></P></TD>

Roman" SIZE="2">Total liabilities, mezzanine equity and shareholders equity</FONT></P></TD>

<TD VALIGN="bottom" WIDTH="5%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="8%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="8%" ><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom"><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom"><FONT SIZE="1"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="1%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD NOWRAP VALIGN="bottom" WIDTH="1%"><FONT FACE="Times New Roman" SIZE="2"> </FONT></TD>

<TD VALIGN="bottom" WIDTH="7%" ><FONT SIZE="1"> </FONT></TD>