WASHINGTON (dpa-AFX) - Ace Limited (ACE) Tuesday reported an increase in profit for the fourth quarter, helped mainly by higher net realized gains. However, operating profit, which excludes special items, declined from last year, hurt mainly by the losses caused by superstorm Sandy.
Looking ahead to the full year 2013, Ace detailed its earnings outlook which is expected to come in short of current expectations. Following the news, shares of Ace dropped nearly five percent in after hours trade.
Chief Executive Evan Greenberg said, 'Ace had a good fourth quarter, which contributed to an excellent year. Even with the impact of Superstorm Sandy, we produced over $490 million of operating income and increased book value per share 2 percent.'
Catastrophe losses for the quarter including reinstatement premiums were $400 million as compared to $137 million last year. Losses caused by Superstorm Sandy were $393 million.
ACE said its property and casualty, or P&C, combined ratio for the quarter was 105.5 percent. A ratio above 100 percent indicates that the company is paying out more money in claims than it is receiving from premiums.
Zurich-based Ace's fourth-quarter profit rose to $765 million or $2.22 per share from $735 million or $2.15 per share last year.
Net realized gains for the quarter surged to $272 million from $83 million last year.
Operating profit, which excludes realized gains and losses, dropped to $492 million or $1.43 per share from $648 million or $1.90 per share last year.
On average, 23 analysts polled by Thomson Reuters expected earnings of $1.28 per share for the quarter. Analysts' estimates typically exclude special items.
Net premiums earned grew to $3.85 billion from $3.83 billion last year. Net premiums written rose to $3.66 billion from $3.63 billion last year. Eleven analysts had consensus revenue estimate of $3.27 billion for the quarter.
Looking forward to the full year 2013, Ace expects operating income in the range of $6.60 and $7.00 per share.
Analysts currently expect earnings of $7.89 per share for fiscal year 2013.
ACE closed Tuesday's trading at $84.94, up $0.28 or 0.33%, on the NYSE. In after hours, the stock dropped $3.83 or 4.51%.
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