2004-07-28 ACE Limited (NYSE: ACE) 8-K

http://www.sec.gov/Archives/edgar/data/896159/000119312504125504/0001193125-04-1255...
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<SEC-DOCUMENT>0001193125-04-125504.txt : 20040728
<SEC-HEADER>0001193125-04-125504.hdr.sgml : 20040728
<ACCEPTANCE-DATETIME>20040727195716
ACCESSION NUMBER:
0001193125-04-125504
CONFORMED SUBMISSION TYPE:
8-K
PUBLIC DOCUMENT COUNT:
4
CONFORMED PERIOD OF REPORT:
20040727
ITEM INFORMATION:
ITEM INFORMATION:
Financial statements and exhibits
FILED AS OF DATE:
20040728
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
04934326
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 <HR WIDTH="21%" SIZE="1" NOSHADE COLOR="#000000"> 
SIZE="1"> FORM 8-K </FO
SIZE="1" NOSHADE COLOR="#000000"> Current Re
STYLE="margin-top:0px;margin-bottom:0px"> Pursuant To Section 13 or 15 (d) of the </F
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">Securities Exchange Act of 1934 
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">Date of Report (Date of earliest event reported) July 27, 2004 <HR WIDTH="21%" SIZE="1" NOSHADE COLOR="#000000"> ACE LIMITED (Exact name of registrant as specified in its charter) <HR WIDTH="21%" SIZE="1" NOSHADE COLOR="#000000"> 
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">
<TR>
<TD WIDTH="33%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center">Cayman Islands</TD>
<TD VALIGN="bottom"> </TD>
<TD VALIGN="top" ALIGN="center">1-11778</TD>
<TD VALIGN="top" ALIGN="center">98-0091805</TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center">(State or other jurisdiction)</TD>
<TD VALIGN="top" ALIGN="center">(Commission File Number)</TD>
<TD VALIGN="top" ALIGN="center"> (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">
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. 
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(c)</TD>
<TD ALIGN="left" VALIGN="top">Exhibits </TD></TR></TABLE> 
<TR>
<TR>
<TD VALIGN="bottom">Exhibit Number <HR WIDTH="42" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom"> Description<HR WIDTH="61" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top">99.1</TD>
<TD VALIGN="bottom">Press release, dated July 27, 2004, reporting second quarter results</TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="bottom">Second quarter 2004 Financial Supplement</TD></TR>
</TABLE> Item 12. Results of Operations
and Financial Condition O
issued a press release reporting its second quarter 2004 results and the availability of its second quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhi
are hereby incorporated herein by reference. <FONT FACE="Times New Roman
with general instruction B.6 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 12 and shall not be deemed filed for the purposes of Section 18 of the Securities Exc
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>
<TR>
<TD VALIGN="top" COLSPAN="3"> ACE LIMITED</TD></TR>
<TR>
<TR>
<TD VALIGN="top"> By:</TD>
<TD VALIGN="bottom"> /s/ Philip V. Bancroft<HR WIDTH="96%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></T
<TR>
<TD VALIGN="top"> </TD>
<TD VALIGN="bottom" ALIGN="center"> Philip V. Bancroft</TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center"> Chief Financial Officer</TD></TR>
</TABLE></DIV> DATE: July 27, 2004 
EXHIBIT INDEX 
<TR>
<TR>
<TD VALIGN="bottom">Number <HR WIDTH="42" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom"> Description<HR WIDTH="61" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD>
<TD VALIGN="bottom"> Method of Filing<HR WIDTH="92" SIZE="1" NOSHADE ALIGN="left" COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom">Press release, dated July 27, 2004, reporting second quarter results</TD>
<TD VALIGN="bottom">Furnished herewith</TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TR>
<TD VALIGN="bottom">Second quarter 2004 Financial Supplement</TD>
<TD VALIGN="bottom">Furnished herewith</TD></TR>
</TABLE> 
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>dex991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<HTML><HEAD>
<TITLE>Press release</TITLE>
</HEAD>
Exhibit 99.1 
<TR>
<TD VALIGN="top">ACE LIMITED</TD>
<TD VALIGN="top">PO BOX HM 1015</TD>
<TD VALIGN="top"> </TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3">ACE Global Headquarters</TD>
<TD VALIGN="top">Hamilton HM DX</TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3">17 Woodbourne AvenueBermuda</TD>
<TR>
<TD VALIGN="top" COLSPAN="3">Hamilton HM 08</TD>
<TR>
<TD VALIGN="top">Bermuda</TD>
<TD VALIGN="top">441 295-5200 main</TD>
<TR>
<TD VALIGN="top">441 292-8675 fax</TD>
<TR>
<TR>
<TD VALIGN="top">www.acelimited.com</TD>
</TABLE> 
<IMG SRC="g35976g55m90.jpg" ALT="LOGO"> FOR IMMEDIATE RELEASE 
<TR>
<TR>
<TD VALIGN="top"> Investor Contact:</TD>
<TD VALIGN="bottom"> Helen M. Wilson</TD></TR>
<TR>
<TD VALIGN="bottom"> (441) 299-9283</TD></TR>
<TR>
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<TD VALIGN="bottom"> </TD></TR>

<TR>
<TD VALIGN="top"> Media Contact:</TD>
<TD VALIGN="bottom"> Anna Lowry</TD></TR>
<TR>
<TD VALIGN="bottom"> (441) 278-6683</TD></TR>
</TABLE> ACE LIMITED REPORTS SECOND QUARTER RESULTS HAMILTON, Bermuda, July 27, 2004ACE Limited (NYSE: ACE) today reported net income for the second quarter ended June 30, 2004 of $413 million or $1.41 per share, compared with n
$1.32 per share for the same quarter last year. Income excluding net realized gains (losses) for the second quarter increased 33% to $380 million, or $1.29 per share, compared with $286 million or $1.01 per share for the
year.(1) Evan Greenberg, President and Chief Execu
commented: This was an excellent quarter. All of our business segments performed well, which is a reflection of the investments we have made to increase both our product capability and physical presence globally. In
market, I remain confident in our ability to perform given our underwriting discipline and the diversity of our business opportunities. </
STYLE="margin-top:0px;margin-bottom:0px">Other second quarter operating highlights were as follows: </FON
<TR>
<TD WIDTH="4%"> </TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"></TD>
<TD ALIGN="left" VALIGN="top">Net premiums written increased 19% to $2.9 billion, reflecting P&C net premium growth of 25% over 2003 </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">The P&C combined ratio improved to 89.0% for the quarter compared with 91.7% a year ago </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Operating cash flow amounted to approximately $1.1 billion for the quarter </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Cash and invested assets increased by $546 million from March 31, 2004 </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Net investment income increased 12% to $236 million. P&C net investment income increased 24% over 2003 </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Shareholders equity decreased 2% from March 31, 2004, principally because unrealized losses on investments exceeded net income </TD></TR></T
<TR>
<TD ALIGN="left" VALIGN="top">Tangible equity decreased to $6.6 billion, a reduction from March 31, 2004 of 1% </TD></TR></TABLE> <
<TR>
<TD ALIGN="left" VALIGN="top">Debt to total capital ratio rose to 19.8% from 16.1% at March 31, 2004. In June 2004, the Company sold $500 million of 10-year senior debt with a 5.875%
debt were used in July to redeem $75 million of callable debt and will be used in August to refinance a maturing $400 million bond. </TD></TR></TABLE> &nb
<TR>
<TD ALIGN="left" VALIGN="top">Annualized return on ordinary equity for the quarter ended June 30, 2004 was 16.9%; excluding FAS 115, it was 17.7% </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Diluted book value per ordinary share as of June 30, 2004 decreased 3% to $30.46 from March 31, 2004.(2) </TD></TR></TABLE> Page 1/5 
Financial results improved over the prior years results for virtually every business segment. Further details are
available in the financial supplement. Key items include: 
<TR>
<TD ALIGN="left" VALIGN="top">Insurance-North American: Net premiums written increased 37% and the combined ratio improved to 90.3%. </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Insurance-Overseas General: Net premiums written increased 21% (11% after foreign exchange impact) and the combined ratio improved to 89.3%. </TD>
<TR>
<TD ALIGN="left" VALIGN="top">Global Reinsurance: Net premiums written were up 6% and this segments combined ratio improved to 76.1%. </TD></TR></TABLE> 
<TD ALIGN="left" VALIGN="top">Financial Services (adjusted for Assured Guaranty): Income excluding realized gains (losses) increased 37% and the combined ratio improved to 80.6%. </FO
STYLE="margin-top:0px;margin-bottom:0px"> On April 23, 2004, the Company completed the sale of 65.3 percent
mortgage guaranty reinsurance and insurance businesses through the initial public offering (IPO) of 49 million common shares of Assured Guaranty Ltd. at $18.00 per share. The Company received total proceeds of approximate
comprised $835 million of net offering proceeds and a return of capital of $200 million. This was a beneficial transaction for ACE as it enabled capital to be reallocated to higher growth, higher ROE businesses, and reduc
exposure. As a result of the transaction, the Companys book value declined by approximately $61 million, comprising an $18 million after tax loss and a $43 million reduction to other comprehensive income, representi
previously unrealized investment gains to income. 
Financial Supplement June 30, 2004, which is posted on the Companys website, for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss rese
Assured Guaranty, investment portfolio and capital structure. ACEs website reference (url) is http://media.corporate-ir.net/media_files/nys/ace/reports/fin_supp_June_30_2004.xls. (Due to the length of this UR
copy and paste this hyperlink into your Internet browsers URL address field.) <FON
SIZE="2">ACE Limited (NYSE: ACE) will host its second quarter 2004 earnings conference call and webcast on Wednesday, July 28, 2004 beginning at 8:30 a.m. EDT. The call is available via live and archived webcast at www
dialing 1-973-582-2745. Please refer to our website in the Investor Information, Calendar of Events for details. A replay of the call will be available until Monday, August 30, 2004. To listen to the replay, d
United States) or 1-973-341-3080 (international); passcode 4928961. <FONT FACE="Times
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, The ACE Group conducts its business on a worldwide basi
subsidiaries in approximately 50 countries. Additional information can be found at: www.acelimited.com. <HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">1</TD>
<TD ALIGN="left" VALIGN="top">Income (loss) excluding net realized gains (losses) on investments and the tax effect of net realized gains (losses) on investments is a common performan
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
heavily influenced by, and fluctuates in part according to, the availability of market opportunities. This measure should not be viewed as a substitute for net income determined in accordance with generally accepted accou
</TD></TR></TABLE>
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">2</TD>
<TD ALIGN="left" VALIGN="top">Diluted book value per ordinary share is ordinary shareholders equity and net proceeds from assumed conversions of outstanding in-the-money options
shares outstanding and the number of options assumed issued. </TD></TR></TABLE> 
Cautionary Statement Regarding Forward-Looking Statements: 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
actual 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
achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial and leg
litigation tactics, the amount and timing of reinsurance recoverable, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance
conditions, as well as managements response to these factors, and other factors identified in the Companys filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance
statements, which speak only as of the dates 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
 (tables to follow) </
STYLE="margin-top:0px;margin-bottom:0px"> 
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ACE Limited Summary Consolidated Balance Sheets (in millions of U.S. dollars, except per share data) 
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> June 30 2004<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 31 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">(Unaudited)</TD>
<TD COLSPAN="2" VALIGN="bottom"> </TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> Assets</TD>
<TR>
<TD VALIGN="top"> Total investments and cash</TD>
<TD VALIGN="bottom">$</TD>
<TD VALIGN="bottom" ALIGN="right">26,735</TD>
<TD VALIGN="bottom" ALIGN="right">24,008</TD></TR>
<TD VALIGN="top"> Insurance and reinsurance balances receivable</TD>
<TD VALIGN="bottom"> </TD>
<TR>
<TD VALIGN="top"> Reinsurance recoverable</TD>
<TD VALIGN="top"> Other assets</TD>
<TR>
<TD VALIGN="bottom"><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top"> Total assets</TD>
<TR>
<TD VALIGN="top"> Liabilities</TD>
<TR>
<TD VALIGN="top"> Unpaid losses and loss expenses</TD>
<TD VALIGN="top"> Unearned premiums</TD>
<TR>
<TD VALIGN="top"> Other liabilities</TD>
<TR>
<TD VALIGN="top"> Total liabilities</TD>
<TR>
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<TD VALIGN="top"> Shareholders equity</TD>
<TR>
<TD VALIGN="top"> Total shareholders equity</TD>
<TR>
<TD VALIGN="top"> Total liabilities and shareholders equity</TD>
<TR>
<TD VALIGN="top"> Diluted book value per ordinary share (2)</TD>
<TD VALIGN="bottom" ALIGN="right">30.46</TD>
<TD VALIGN="bottom" ALIGN="right">29.46</TD></TR>
SIZE="1"> Summary Consolidated Financial Data (in millions of U.S. dollars, except share, per share data, and ratios) <
 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Three Months Ended June 30<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Six Months Ended 
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top"> Gross premiums written</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR>
<TD VALIGN="top"> Net premiums written</TD>
<TD VALIGN="top"> Net premiums earned</TD>
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<TR>
<TD VALIGN="top"> 44</TD>
<TR>
<TR>
<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" ALIGN="right">(6</TD>
<TD NOWRAP VALIGN="bottom">)</TD>
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Roman" SIZE="2">Losses and loss expenses</TD>
Roman" SIZE="2">Life and annuity benefits</TD>
Roman" SIZE="2">Policy acquisition costs</TD>
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>
8/12/11 3:54 PM

<TD NOWRAP VALIGN="bottom">)</TD></TR>
<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Interest expense</TD>
Roman" SIZE="2">Income tax expense</TD>
Roman" SIZE="2">Income excluding net realized gains (1)</TD>
Roman" SIZE="2">Net realized gains</TD>
Roman" SIZE="2">Tax expense on net realized gains</TD>
Roman" SIZE="2">Net income</TD>
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<TR>
<TD VALIGN="top"> Preference shares dividend</TD>
<TD VALIGN="top"> FELINE PRIDE dividend</TD>
<TD VALIGN="bottom" ALIGN="right"> </TD>
<TR>
<TD VALIGN="top"> Net income available to holders of ordinary shares</TD>
<TR>
<TD VALIGN="top"> Diluted earnings per share:</TD>
<TR>
<TD VALIGN="top"> Income excluding net realized gains (1)</TD>
<TD VALIGN="bottom" ALIGN="right">$1.29</TD>
<TD VALIGN="top"> Net income</TD>
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<TR>
<TR>
<TD VALIGN="top"> Weighted average diluted shares outstanding</TD>
<TD VALIGN="bottom" ALIGN="right">285,371,164</TD>
<TR>
<TD VALIGN="top"> Loss and loss expense ratio</TD>
<TD NOWRAP VALIGN="bottom">%</TD>
<TD NOWRAP VALIGN="bottom">%</TD></TR>
<TR>
<TD VALIGN="top"> Policy acquisition cost ratio</TD>
<TD VALIGN="top"> Administrative expense ratio</TD>
<TR>
<TD VALIGN="top"> Combined ratio</TD>
</TABLE> Ratios exclude
life reinsurance business 
<TR>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="5"> ACE Limited <FO
SIZE="1"> Consolidated Supplemental Segment Information (in millions of U.S. dollars) (Unaudited)</FON
STYLE="margin-top:0px;margin-bottom:1px" align="left"> </TD></TR>
</TABLE>
<TR>
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<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> Three Months Ended Six Months Ended June 30<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="top"> Gross Premiums Written</TD>
<TR>
<TD VALIGN="top"> InsuranceNorth American</TD>
<TD VALIGN="top"> InsuranceOverseas General</TD>
<TR>
<TD VALIGN="top"> Global Reinsurance*</TD>
<TD VALIGN="top"> Financial Services</TD>
<TR>
<TD VALIGN="top"> Total</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
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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>
Roman" SIZE="2">Total</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Net Premiums Earned</TD>
Roman" SIZE="2">Total</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
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Roman" SIZE="2">Income (Loss) Excluding Net Realized Gains (Losses)(1)</TD>
Roman" SIZE="2">Corporate</TD>
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<TD VALIGN="top"> 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> # # # 
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>dex992.htm
<DESCRIPTION>SECOND QUARTER 2004 FINANCIAL SUPPLEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Second quarter 2004 Financial Supplement</TITLE>
</HEAD>
Exhibit 99.2 Financial Supplement June 30, 2004 
<TR>
<TR>
<TR>
<TD VALIGN="top"> Investor Contact Helen M. Wilson Phone: (441) 299-9283</TD>
<TD VALIGN="bottom">This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with the Securities and Exchange Commission, in
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.</TD></TR>
<TR>
<TD VALIGN="top"> Fax: (441) 292-8675</TD>
<TR>
<TD VALIGN="top"> email: investorrelations@ace.bm</TD>
<TD VALIGN="bottom">Cautionary Statement Regarding Forward-Looking Statements:</TD></TR>
<TR>
<TD VALIGN="bottom"> Any forward-looking statements made in t
reflect the Companys 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
uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Companys forward-looking statements concerning exposures, reserves and recoverables could
of unpredictable catastrophic events, actual loss experience which differs from the Companys assumptions, uncertainties in the reserving or settlement process, new theories of liability, planned public offerings, ju
developments, litigation tactics, and credit developments among reinsurers and the Companys forward-looking statements concerning taxes could be affected by changes in tax laws and regulations. Other factors that co
statements are identified 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, 2003, the Companys quarter
in the Companys earnings press release, which are available on the Companys website.</TD></TR>
<TR>
<TR>
<TD VALIGN="bottom">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 underta
publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.</TD></TR>
</TABLE> 
SIZE="1"> Financial Supplement Table of Contents 
<TR>
<TD VALIGN="bottom" ALIGN="right">Page <HR WIDTH="36" SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top"> I.</TD>
<TD VALIGN="bottom">Financial Highlights</TD>
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<TR>
<TD VALIGN="bottom">- Consolidated Financial Highlights</TD>
<TD VALIGN="bottom" ALIGN="right">1</TD></TR>
<TR>
<TR>
<TD VALIGN="top"> II.</TD>
<TD VALIGN="bottom">Consolidated Results</TD>
<TR>
<TD VALIGN="bottom">- Consolidated Results - Consecutive Quarters</TD>
<TD VALIGN="bottom" ALIGN="right">2-3</TD></TR>
<TR>
<TD VALIGN="bottom">- Computation of Basic and Diluted Earnings Per Share</TD>
<TR>
<TD VALIGN="bottom">- Summary Consolidated Balance Sheets</TD>
<TR>
<TD VALIGN="bottom">- Consolidated Premiums by Line of Business</TD>
<TR>
<TD VALIGN="bottom">- Consolidating Statement of Operations</TD>
<TR>
<TR>
<TD VALIGN="top"> III.</TD>
<TD VALIGN="bottom">Segment Results</TD>
<TR>
<TD VALIGN="bottom">- Insurance-North American</TD>
<TR>
<TD VALIGN="bottom">- Insurance-Overseas General</TD>
<TR>
<TD VALIGN="bottom">- Global Reinsurance</TD>
<TR>
<TD VALIGN="bottom">- Financial Services</TD>
<TR>
<TR>
<TD VALIGN="top"> IV.</TD>
<TD VALIGN="bottom">Balance Sheet Details</TD>
<TR>
<TD VALIGN="bottom">- Loss Reserve Rollforward</TD>
<TR>
<TD VALIGN="bottom">- Asbestos and Environmental Reserves</TD>
<TR>
<TD VALIGN="bottom">- Reinsurance Recoverable Analysis</TD>
<TR>
<TD VALIGN="bottom">- Investment Portfolio</TD>
<TR>
<TD VALIGN="bottom">- Realized and Unrealized Gains (Losses)</TD>
<TR>
<TD VALIGN="bottom">- Capital Structure</TD>
<TR>
<TR>
<TD VALIGN="top"> V.</TD>
<TD VALIGN="bottom">Other Disclosures</TD>
<TR>
<TD VALIGN="bottom">- Non-GAAP Financial Measures</TD>
<TR>
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<TD VALIGN="bottom">- Diluted Book Value per Ordinary Share</TD>
<TR>
<TD VALIGN="bottom">- Comprehensive Income</TD>
<TR>
<TD VALIGN="bottom">- Glossary</TD>
SIZE="1"> Consolidated Financial Highlights (in millions of U.S. dollars, except per share data and ratios) (Unaudited) 
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Three months ended June 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2" NOWRAP ALIGN="center"> % Change 2Q-04 vs. 2Q-03<HR SIZE="1" NOSHADE COLOR="#000000"></TD
<TD VALIGN="bottom" ROWSPAN="2"> </TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Six months ended June 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2" NOWRAP ALIGN="center"> % Change YTD -04 vs. YTD-03<HR SIZE="1" NOSHADE COLOR="
<TD VALIGN="bottom" ROWSPAN="2"> </TD></TR>
<TR>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom">19</TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom">%</TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom">%</TD></TR>
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<TD VALIGN="top"> Net investment income</TD>
<TR>
<TD VALIGN="top"> Income excluding net realized gains (losses)</TD>
<TR>
<TR>
<TR>
<TD VALIGN="top"> Comprehensive income</TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom">-121</TD>
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<TD VALIGN="top"> Operating cash flow</TD>
<TR>
<TD VALIGN="top"> Combined ratio</TD>
<TR>
<TD VALIGN="top"> Underwriting and administrative expense ratio</TD>
<TR>
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<TD VALIGN="top"> Annualized ROE*</TD>
<TD VALIGN="top"> Annualized ROE, excluding FAS 115</TD>
<TR>
<TR>
<TD VALIGN="top"> Diluted earnings per share</TD>
<TR>
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<TD VALIGN="top"> Diluted book value per ordinary share</TD>
<TR>
<TD VALIGN="top"> Diluted tangible book value per ordinary share</TD>
<TR>
<TD VALIGN="top"> Weighted average diluted ordinary shares outstanding</TD>
<TR>
<TR>
<TD VALIGN="top"> Debt/ total capitalization</TD>
</TABLE><HR WIDTH="10%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TR>
<TD ALIGN="left" VALIGN="top">Calculated using income excluding net realized gains (losses). </TD></TR></TABLE> &nbsp
<TR>
<TR>
<TD VALIGN="bottom"> Financial Highlights</TD>
<TD VALIGN="bottom" ALIGN="right">Page 1</TD></TR>
</TABLE>
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SIZE="1"> Consolidated Results - Consecutive Quarters (in millions of U.S. dollars) <FO
SIZE="1"> (Unaudited) <
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">2Q-04 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">YTD 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Full Year 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top">ACE Limited Consolidated</TD>
<TR>
<TD VALIGN="top"> Property and Casualty(1)</TD>
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Roman" SIZE="2">Net premiums written</TD>
Roman" SIZE="2">Net premiums earned</TD>
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<TD VALIGN="top"> Administrative expenses</TD>
<TR>
<TD VALIGN="top"> P& C underwriting income</TD>
<TR>
<TR>
<TD VALIGN="top"> Financial Services underwriting income</TD>
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<TR>
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Roman" SIZE="2">Life underwriting income (loss) excluding investment income</TD>
Roman" SIZE="2">Net investment income</TD>
Roman" SIZE="2">Other income (expense)</TD>
Roman" SIZE="2">Interest expense</TD>
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Roman" SIZE="2">Income tax expense</TD>
Roman" SIZE="2">Income excluding net realized gains (losses)</TD>
Roman" SIZE="2">Net realized gains (losses)</TD>
Roman" SIZE="2">Tax benefit (expense) on net realized gains (losses)</TD>
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<TR>
<TD VALIGN="bottom" ALIGN="right"> 618</TD>
<TR>
<TD VALIGN="top"> % Change versus prior year period(1)<FO
SIZE="2" COLOR="#000000"></TD>
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<TD VALIGN="top"> 
<TR>
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New Roman" SIZE="2">Gross premiums written</TD>
New Roman" SIZE="2">Net premiums written</TD>
New Roman" SIZE="2">Net premiums earned</TD>
New Roman" SIZE="2">Other ratios</TD>
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Roman" SIZE="2">Net premiums written/gross premiums written</TD>
Roman" SIZE="2">Effective tax rate</TD>
Roman" SIZE="2">ROE</TD>
Roman" SIZE="2">Annualized ROE</TD>
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<TR>
<TD VALIGN="top"> Annualized ROE, excluding FAS 115</TD>
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">(1)</TD>
<TD ALIGN="left" VALIGN="top">Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. </TD></TR></TABLE> 
<TR>
<TD VALIGN="bottom"> Consolidated Results</TD>
</TABLE>
SIZE="1"> Consolidated Results - Consecutive Quarters 
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">2Q-04 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> YTD ACE Limited Consolidated</TD>
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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>
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<TR>
<TR>
<TR>
<TR>
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<TD VALIGN="top">Property and Casualty (1)</
FACE="Times New Roman" SIZE="2" COLOR="#000000"></TD>
<TR>
<TR>
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<TR>
<TR>
<TD VALIGN="top"> Large losses and other items</TD>
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<TD VALIGN="top"> Catastrophe and other large losses</TD>
<TD VALIGN="top"> Prior period development(2)</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">See Financial Services schedule for prior period development related to that segment. </TD></TR></TABLE> 
<TR>
<TD VALIGN="bottom"> Consolidated Results 2</TD>
</TABLE>
SIZE="1"> Computation of Basic and Diluted Earnings Per Share (in millions of U.S. dollars, except share and per share data) 
<TR>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Three months ended June 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
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<TD VALIGN="bottom" COLSPAN="6" ALIGN="center">Six months ended June 30 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="top"> Numerator</TD>
<TR>
<TD VALIGN="top"> Perpetual preferred dividend</TD>
<TR>
<TD VALIGN="top"> Mezzanine equity dividend</TD>
<TR>
<TD VALIGN="top"> Income to ordinary shares, excl. net realized gains (losses)</TD>
<TR>
<TD VALIGN="top"> Net realized gains (losses), net of income tax</TD>
<TR>
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<TD VALIGN="top"> Net income available to the holders of ordinary shares</TD>
<TR>
<TD VALIGN="top"> Rollforward of ordinary shares</TD>
<TR>
<TD VALIGN="top"> Ordinary shares - beginning of period</TD>
<TD VALIGN="top"> Mezzanine equity conversion</TD>
<TR>
<TD VALIGN="top"> Issued under employee stock purchase plan</TD>
<TD VALIGN="top"> Stock (cancelled) granted</TD>
<TD VALIGN="bottom" ALIGN="right">(347,919</TD>
<TR>
<TD VALIGN="top"> Issued for option exercises</TD>
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<TR>
<TD VALIGN="top"> 
<TR>
<TR>
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SIZE="2">Ordinary shares - end of period</TD>
SIZE="2">Denominator</TD>
SIZE="2">Weighted average shares outstanding</TD>
SIZE="2">Effect of other dilutive securities</TD>
SIZE="2">Adj. wtd. avg. shares outstanding and assumed conversions</TD>
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<TR>
<TR>
<TR>
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SIZE="2">Basic earnings per share</TD>
SIZE="2">Income excluding net realized gains (losses)</TD>
SIZE="2">Net realized gains (losses)</TD>
SIZE="2">Net income</TD>
SIZE="2">Diluted earnings per share</TD>
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<TR>
<TD VALIGN="top"> Net realized gains (losses)</TD>
<TR>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Earnings per share</TD>
SIZE="1"> Summary Consolidated Balance Sheets (in millions of U.S. dollars, except per share data) 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> June 30 March 31 December 31 2003<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">(Audited)</TD></TR>
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SIZE="2">Assets</TD>
SIZE="2">Fixed maturities available for sale, at fair value</TD>
SIZE="2">Equity securities, at fair value</TD>
SIZE="2">Securities on loan, at fair value</TD>
SIZE="2">Short-term investments</TD>
SIZE="2">Other investments</TD>
SIZE="2">Cash</TD>
SIZE="2">Total investments and cash</TD>
SIZE="2">Insurance and reinsurance balances receivable</TD>
SIZE="2">Reinsurance recoverable</TD>
SIZE="2">Deferred policy acquisition costs</TD>
SIZE="2">Prepaid reinsurance premiums</TD>
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<TR>
<TR>
<TR>
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SIZE="2">Goodwill</TD>
SIZE="2">Deferred tax assets</TD>
SIZE="2">Other assets</TD>
SIZE="2">Total assets</TD>
SIZE="2">Liabilities</TD>
SIZE="2">Unpaid losses and loss expenses</TD>
SIZE="2">Unearned premiums</TD>
SIZE="2">Future policy benefits for life and annuity contracts</TD>
SIZE="2">Insurance and reinsurance balances payable</TD>
SIZE="2">Deposit liabilities</TD>
SIZE="2">Securities lending collateral</TD>
SIZE="2">Payable for investments purchased</TD>
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<TR>
<TR>
<TR>
<TR>
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<TR>
<TR>
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SIZE="2">Accounts payable, accrued expenses and other liabilities</TD>
SIZE="2">Short-term debt</TD>
SIZE="2">Long-term debt</TD>
SIZE="2">Trust preferred securities</TD>
SIZE="2">Total liabilities</TD>
SIZE="2">Shareholders equity</TD>
SIZE="2">Total shareholders equity, excl. AOCI</TD>
SIZE="2">Accumulated other comprehensive income (AOCI)</TD>
SIZE="2">Total shareholders equity</TD>
SIZE="2">Total liabilities and shareholders equity</TD>
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<TR>
<TD VALIGN="top"> Diluted book value per ordinary share</TD>
<TR>
<TD VALIGN="top"> Diluted tangible book value per ordinary share</TD>
</TABLE> 
<TR>
<TR>
<TD VALIGN="bottom"> Consol Bal Sheet</TD>
</TABLE>
SIZE="1"> Consolidated Premiums by Line of Business 
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom" ALIGN="center"> % of Total Consolidated<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" ALIGN="center"> % Change 2Q-04 vs. 2Q-03<HR SIZE="1" NOSHADE COLOR="#000000"
<TD VALIGN="bottom" NOWRAP ALIGN="center">% Change YTD-04 vs. YTD-03 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" NOWRAP>ACE Limited Consolidated</TD>
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<TR>
<TD VALIGN="top"> Net premiums written</TD>
<TD VALIGN="top"> Property and all other</TD>
<TR>
<TD VALIGN="top"> Casualty</TD>
<TD VALIGN="top"> Personal accident</TD>
<TR>
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<TD VALIGN="top"> Total P&C</TD>
<TR>
<TD VALIGN="top"> Global Re - life</TD>
<TR>
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<TR>
<TD VALIGN="top"> Total Consolidated</TD>
<TR>
<TR>
<TD VALIGN="top"> Net premiums earned</TD>
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<TR>
<TR>
<TD VALIGN="top"> Property and all other</TD>
<TD VALIGN="top"> Casualty</TD>
<TR>
<TD VALIGN="top"> Personal accident</TD>
<TR>
<TD VALIGN="top"> Total P&C</TD>
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<TR>
<TD VALIGN="top"> Global Re - life</TD>
<TR>
<TR>
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<TD VALIGN="top" NOWRAP> Total Consolidated</TD>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> P&C Line of Business</TD>
</TABLE>
SIZE="1"> Consolidating Statement of Operations Three months ended June 30, 2004 and 2003 
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">Insurance - North American <HR SIZE="1" NOSHADE COLOR="#000000"></TD>

Roman" SIZE="1">Insurance - Overseas General <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Global Reinsurance <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Corporate & Other <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Consolidated P&C <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">Financial Services <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
SIZE="1">ACE Consolidated <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
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<TD VALIGN="top" NOWRAP> 
<TR>
<TR>
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SIZE="2">June 30, 2004</TD>
SIZE="2">Gross premiums written</TD>
SIZE="2">Net premiums written</TD>
SIZE="2">Net premiums earned</TD>
SIZE="2">Losses and loss expenses</TD>
SIZE="2">Policy acquisition costs</TD>
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<TD VALIGN="top" NOWRAP> Administrative expenses</TD>
<TR>
<TD VALIGN="top"> Underwriting income (loss)</TD>
<TR>
<TR>
<TD VALIGN="top" NOWRAP> Life underwriting income (includes investment income)</TD>
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<TR>
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SIZE="2">Net investment income - property and casualty</TD>
SIZE="2">Other income (expense)</TD>
SIZE="2">Interest expense</TD>
SIZE="2">Income tax expense (benefit)</TD>
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<TD VALIGN="top"> Income (loss) excluding net realized gains (losses)</TD>
<TR>
<TR>
<TD VALIGN="top" NOWRAP> Net realized gains (losses)</TD>
<TD VALIGN="top" NOWRAP> Tax benefit (expense) on net realized gains (losses)</TD>
<TR>
<TD VALIGN="top"> Net income (loss)</TD>
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<TR>
<TR>
<TR>
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<TD VALIGN="top" NOWRAP> Losses and loss expenses</TD>
<TR>
<TD VALIGN="top" NOWRAP> Policy acquisition costs</TD>
<TD VALIGN="top" NOWRAP> Administrative expenses</TD>
<TR>
<TD VALIGN="top"> Underwriting income (loss)</TD>
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<TR>
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SIZE="2">Life underwriting income</TD>
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<TR>
<TD VALIGN="top"> Income (loss) excluding net realized gains (losses)</TD>
<TR>
<TR>
<TR>
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<TD VALIGN="top"> Net income (loss)</TD>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Segment 2004 Qtr</TD>
</TABLE>
SIZE="1"> Consolidating Statement of Operations Six months ended June 30, 2004 and 2003 
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Insurance - North American <HR SIZE="1" NOSHADE COLOR="#000000"></TD>

New Roman" SIZE="1">Insurance - Overseas General <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
New Roman" SIZE="1">Global Reinsurance <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
New Roman" SIZE="1">Corporate & Other <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
New Roman" SIZE="1">Consolidated P&C <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
New Roman" SIZE="1">Financial Services <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
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<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">ACE Consolidated <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top" NOWRAP> June 30, 2004</TD>
<TR>
<TD VALIGN="top" NOWRAP> Gross premiums written</TD>
<TD VALIGN="top" NOWRAP> Net premiums written</TD>
<TR>
<TD VALIGN="top" NOWRAP> Net premiums earned</TD>
<TD VALIGN="top" NOWRAP> Losses and loss expenses</TD>
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<TR>
<TR>
<TR>
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SIZE="2">Administrative expenses</TD>
SIZE="2">Underwriting income (loss)</TD>
SIZE="2">Life underwriting income (includes investment income)</TD>
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<TR>
<TR>
<TR>
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SIZE="2">Income (loss) excluding net realized gains (losses)</TD>
SIZE="2">Net realized gains (losses)</TD>
SIZE="2">Tax benefit (expense) on net realized gains (losses)</TD>
SIZE="2">Net income (loss)</TD>
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<TR>
<TR>
<TR>
<TR>
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SIZE="2">Losses and loss expenses</TD>
SIZE="2">Administrative expenses</TD>
SIZE="2">Underwriting income (loss)</TD>
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<TR>
<TR>
<TR>
<TR>
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SIZE="2">Life underwriting income</TD>
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<TR>
<TD VALIGN="top" NOWRAP> Income (loss) excluding net realized gains (losses)</TD>
<TR>
<TR>
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<TR>
<TD VALIGN="top" NOWRAP> Net income (loss)</TD>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Segment 2004 YTD</TD>
</TABLE>
SIZE="1"> Segment Results - Consecutive Quarters 
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<TR>
<TD VALIGN="top">Insurance - North American</TD>
<TR>
<TR>
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<TD VALIGN="top"> Losses and loss expenses</TD>
<TR>
<TD VALIGN="top"> Policy acquisition costs</TD>
<TR>
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<TD VALIGN="top"> Underwriting income</TD>
<TR>
<TR>
<TD VALIGN="top"> Other income (expense)</TD>
<TR>
<TD VALIGN="top"> Interest expense</TD>
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<TD VALIGN="top"> Income tax expense (benefit)</TD>
<TR>
<TR>
<TR>
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<TD VALIGN="top"> Tax benefit (expense) on net realized gains (losses)</TD>
<TR>
<TR>
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<TR>
<TR>
<TR>
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<TR>
<TD VALIGN="top"> Large losses (before tax)</TD>
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<TR>
<TR>
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Roman" SIZE="2">Prior period development</TD>
Roman" SIZE="2">% Change versus prior year period</TD>
Roman" SIZE="2">Gross premiums written</TD>
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<TR>
<TR>
<TD VALIGN="top"> Other ratios</TD>
<TD VALIGN="top"> Net premiums written/gross premiums written</TD>
<TR>
<TR>
<TD VALIGN="bottom"> Insurance-North American</TD>
</TABLE>
<TR>
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<TR>
<TD VALIGN="top">Insurance - Overseas General</TD>
<TR>
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<TR>
<TR>
<TR>
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Roman" SIZE="2">Administrative expenses</TD>
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<TR>
<TR>
<TR>
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<TD VALIGN="top"> Income tax expense</TD>
<TR>
<TR>
<TR>
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<TR>
<TR>
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<TR>
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Roman" SIZE="2">Administrative expense ratio</TD>
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<TR>
<TR>
<TR>
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<TD VALIGN="top"> Prior period development</TD>
<TR>
<TR>
<TD VALIGN="top"> % Change versus prior year period</TD>
<TR>
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<TR>
<TR>
<TD VALIGN="top"> Other ratios</TD>
<TR>
<TR>
<TD VALIGN="bottom"> Insurance-Overseas General</TD>
85 of 176
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</TABLE>
SIZE="1"> Segment Results - Consecutive Quarters - 2 
<TR>
<TD VALIGN="top">Insurance - Overseas General</TD>
<TR>
<TD VALIGN="top"> Gross premiums written</TD>
<TD VALIGN="top"> ACE Global Markets</TD>
86 of 176
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<TR>
<TD VALIGN="top"> ACE International</TD>
<TR>
<TD VALIGN="top"> Total</TD>
<TR>
87 of 176
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<TD VALIGN="top"> Net premiums written</TD>
<TR>
<TR>
88 of 176
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<TR>
<TR>
89 of 176
Roman" SIZE="2">Total</TD>
Roman" SIZE="2">Net premiums earned</TD>
Roman" SIZE="2">ACE Global Markets</TD>
Roman" SIZE="2">ACE International</TD>
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<TR>
<TR>
<TD VALIGN="top" COLSPAN="8"> Net premiums written/gross premiums written</TD>
<TD VALIGN="top"> </TD>
90 of 176
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<TR>
<TR>
<TD VALIGN="top"> Total NPW/GPW</TD>
91 of 176
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<TR>
<TD VALIGN="top"> Loss ratio</TD>
<TR>
<TR>
92 of 176
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<TD VALIGN="top"> Total loss ratio</TD>
<TR>
<TD VALIGN="top"> Expense ratio</TD>
<TR>
93 of 176
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<TR>
<TD VALIGN="top"> Total expense ratio</TD>
<TR>
94 of 176
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<TR>
<TR>
95 of 176
Roman" SIZE="2">ACE Global Markets</TD>
Roman" SIZE="2">ACE International</TD>
Roman" SIZE="2">Total combined ratio</TD>
8/12/11 3:54 PM

<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Insurance-Overseas General 2</TD>
</TABLE>
<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="top"> Global Reinsurance</TD>
96 of 176
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<TR>
<TR>
<TR>
97 of 176
Roman" SIZE="2">Property and casualty</TD>
8/12/11 3:54 PM

<TR>
<TR>
<TR>
98 of 176
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<TR>
<TR>
<TR>
99 of 176
Roman" SIZE="2">P&C underwriting income</TD>
Roman" SIZE="2">Life</TD>
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<TR>
<TR>
100 of 176
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<TR>
<TD VALIGN="top"> Life underwriting income</TD>
<TR>
<TR>
<TD VALIGN="top"> Total underwriting income</TD>
101 of 176
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<TD VALIGN="top"> Net investment income - property and casualty</TD>
<TR>
<TR>
<TR>
102 of 176
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<TR>
<TR>
<TR>
103 of 176
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<TR>
<TD VALIGN="top"> P&C combined ratio</TD>
<TR>
104 of 176
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<TR>
<TR>
<TD VALIGN="top"> P&C combined ratio</TD>
105 of 176
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<TR>
<TR>
<TR>
<TR>
106 of 176
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<TD VALIGN="top"> Global Reinsurance</TD>
</TABLE>
SIZE="1"> Segment Results - Consecutive Quarters - 2 
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">YTD 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">YTD 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center">Full Year 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top"> Global Reinsurance -Property & Casualty</TD>
<TR>
<TR>
107 of 176
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<TR>
<TR>
<TR>
108 of 176
Roman" SIZE="2">Other ratios</TD>
8/12/11 3:54 PM

<TR>
<TR>
<TR>
<TR>
109 of 176
Roman" SIZE="2">Net premiums written/gross premiums written</TD>
Roman" SIZE="2">Global Reinsurance - By Division</TD>
Roman" SIZE="2">Gross premiums written</TD>
Roman" SIZE="2">Tempest Europe</TD>
8/12/11 3:54 PM

<TD VALIGN="top"> Tempest USA</TD>
<TR>
<TD VALIGN="top"> Tempest Bermuda</TD>
<TR>
<TD VALIGN="top"> Total </TD>
110 of 176
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<TR>
<TR>
<TR>
111 of 176
Roman" SIZE="2">Net premiums written</TD>
Roman" SIZE="2">Tempest USA</TD>
Roman" SIZE="2">Tempest Bermuda</TD>
8/12/11 3:54 PM

<TR>
<TD VALIGN="top"> Total </TD>
<TR>
<TD VALIGN="top"> Net premiums earned</TD>
112 of 176
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<TR>
<TD VALIGN="top"> Tempest Europe</TD>
<TD VALIGN="top"> Tempest USA</TD>
<TR>
<TR>
113 of 176
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<TR>
<TR>
114 of 176
Roman" SIZE="2">Total </TD>
Roman" SIZE="2">Net premiums written/gross premiums written</TD>
Roman" SIZE="2">Tempest USA</TD>
8/12/11 3:54 PM

<TR>
<TR>
<TD VALIGN="top"> Total NPW/GPW</TD>
<TR>
115 of 176
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<TR>
<TR>
<TD VALIGN="top"> Global Reinsurance 2</TD>
</TABLE>
<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="top"> Financial Services</TD>
<TR>
<TR>
116 of 176
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<TR>
<TR>
117 of 176
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<TR>
<TR>
<TR>
118 of 176
8/12/11 3:54 PM

<TR>
<TR>
119 of 176
8/12/11 3:54 PM

<TR>
<TR>
<TR>
120 of 176
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<TR>
<TR>
121 of 176
Roman" SIZE="2">Net income</TD>
8/12/11 3:54 PM

<TR>
<TR>
<TR>
122 of 176
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<TR>
<TD VALIGN="top"> Loss portfolio transfers(1)</TD>
<TR>
<TR>
123 of 176
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<TD VALIGN="bottom" ALIGN="right">-87</TD>
<TR>
<TR>
<TR>
124 of 176
Roman" SIZE="2">Other ratios</TD>
8/12/11 3:54 PM

<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> 
<TR>
<TR>
</TABLE>
SIZE="1"> Financial Services Sale of Assured Guaranty (in millions of U.S. dollars) 
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">(Unaudited) Sale of Assured Guaranty Ltd. On April 28, 2004, the Company completed the sale of 65.3 percent of its financial and mortgage guaranty reinsurance and insurance businesses
through the initial public offering (IPO) of 49 million common shares of Assured Guaranty Ltd. (Assured Guaranty) at $18.00 per share. Assured Guaranty was incorporated in Bermuda in August 2003 for the sole purpose of be
the transferred business. Pursuant to the completi
2004, the Company received proceeds, net of related offering costs, of approximately $835 million. The transaction resulted in a pre-tax loss of $6.7 million, that reduces net realized gains in the consolidated income sta
loss of $18.1 million, which consists of the following: 
<TR>
<TD VALIGN="top"> Loss on sale of financial and mortgage guaranty businesses</TD>
<TD VALIGN="bottom" ALIGN="right">(49.7</TD>
<TR>
<TR>
<TD VALIGN="top"> After tax reduction in book value</TD>
<TR>
<TR>
<TD VALIGN="top"> Realization of accumulated other comprehensive income on companies sold</TD>
<TR>
<TD VALIGN="top"> After tax loss</TD>
<TR>
</TABLE> A
description of each component of the loss is as follows: 
<TR>
<TD ALIGN="left" VALIGN="top">The loss on the sale of the financial and mortgage guaranty businesses of $49.7 million represents the difference between the carrying value of the Compa
125 of 176
8/12/11 3:54 PM
Assured Guaranty sold and net proceeds of the Offering. </TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">Income tax expense of $11.4 million principally relates to federal income taxes incurred from the transfer of ACEs U.S. financial and mortgage guar
Guaranty and attributed to the Assured Guaranty shares sold by the Company. The income tax expense results from a higher basis in the assets of the transferred subsidiaries for financial reporting purposes compared to the
connection with its sale and pursuant to a tax allocation agreement, Assured Guaranty will make a tax election that will have the effect of increasing the tax basis of tangible and intangible assets to fair value. Future
Guaranty derives from this election will be payable to ACE and recognized by ACE when realized by Assured Guaranty. </TD></TR></TABLE> 
<TR>
<TD ALIGN="left" VALIGN="top">The realization of accumulated other comprehensive income on companies sold of $43.0 million principally relates to the unrealized appreciation of availa
included in the carrying value of the interest in Assured Guaranty sold; such gains had no effect on shareholders equity. </TD></TR></TABLE> </
<TR>
<TR>
<TD VALIGN="top"> Financial Services 2</TD>
</TABLE>
SIZE="1"> Loss Reserve Rollforward (Unaudited) 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Total <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Ongoing <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Run-off (1) <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center"> Unpaid Losses<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Gross <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Ceded <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="top"> Balance at December 31, 2002</TD>
<TD VALIGN="bottom">$</TD>
<TD VALIGN="bottom" ALIGN="right">24,315</TD>
<TD NOWRAP VALIGN="bottom"> </TD>
126 of 176
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<TD NOWRAP VALIGN="bottom"> </TD></TR>
<TR>
<TR>
<TD VALIGN="top"> Losses and loss expenses incurred</TD>
<TD VALIGN="top"> Losses and loss expenses paid</TD>
<TR>
<TD VALIGN="top"> Other (incl. foreign exch. revaluation)</TD>
<TR>
127 of 176
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<TD VALIGN="top"> Balance at March 31, 2003</TD>
<TD VALIGN="bottom"> </TD>
<TR>
<TR>
128 of 176
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<TR>
<TD VALIGN="top"> Balance at June 30, 2003</TD>
129 of 176
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<TR>
<TR>
130 of 176
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<TR>
<TD VALIGN="top"> Balance at September 30, 2003</TD>
<TR>
131 of 176
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<TR>
<TD VALIGN="top"> Other (incl. foreign exch. revaluation) (2)</TD>
<TR>
132 of 176
8/12/11 3:54 PM

<TR>
<TR>
133 of 176
8/12/11 3:54 PM

<TR>
<TR>
134 of 176
8/12/11 3:54 PM

<TR>
<TD VALIGN="top"> Other (incl. foreign exch. revaluation) (3)</TD>
<TR>
135 of 176
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<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The run-off reserves primarily include Brandywine group, the Commercial Insurance Service - Middle Market Workers Comp. reserves and the pre-1997 W
reserves. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Other includes approximately $220 million of gross losses and $140 million of reinsurance recoverable related to ACE increasing its participation in the
</TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Other includes reductions in reserves related to the sale of Assured Guaranty Ltd. </TD></TR></TABLE> 
<TR>
<TR>
<TD VALIGN="top"> Loss Reserve Rollforward</TD>
</TABLE>
SIZE="1"> Asbestos and Environmental Reserves 
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Asbestos <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="3" NOWRAP ALIGN="center">Asbestos - December 31, 2003* <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> Gross 3 year survival ratio<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
136 of 176
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<TD VALIGN="bottom" NOWRAP ALIGN="center"> Gross 1 year survival ratio<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="bottom" ALIGN="right">277</TD>
<TD VALIGN="bottom" ALIGN="right">10.3x</TD>
<TD VALIGN="bottom" ALIGN="right">9.9x</TD></TR>
<TR>
<TR>
<TD VALIGN="top"> Foreign exchange revaluation</TD>
<TR>
<TR>
<TR>
137 of 176
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<TR>
<TR>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="10" NOWRAP ALIGN="center">Environmental & Other Latent Exposures <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TR>
138 of 176
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
139 of 176
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<TR>
<TD ALIGN="left" VALIGN="top">The survival ratios are adversely affected by the timing of certain previously agreed upon settlements. These payments were anticipated in our 2002 asbes
<TR>
<TR>
<TD VALIGN="top"> Loss Reserves - A&E</TD>
</TABLE>
SIZE="1"> Reinsurance Recoverable Analysis 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">June 30 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">March 31 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">December 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"> Net Reinsurance Recoverable by Division</TD>
<TR>
<TR>
<TD VALIGN="top"> Reinsurance recoverable on paid losses & loss expenses</TD>
<TD VALIGN="top"> Active operations(1)</TD>
<TR>
<TD VALIGN="top"> Brandywine(2)</TD>
140 of 176
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COLOR="#000000"></TD>
<TR>
<TR>
<TR>
COLOR="#000000"></TD>
COLOR="#000000"></TD>
<TR>
COLOR="#000000"></TD>
141 of 176
Roman" SIZE="2">Westchester(3)Reinsurance recoverable on unpaid losses & loss expenses</TD>
Roman" SIZE="2">Active operations(1)Brandywine(2)
<TR>
<TR>
COLOR="#000000"></TD>
COLOR="#000000"></TD>
<TR>
COLOR="#000000"></TD>
<TR>
142 of 176
Roman" SIZE="2">Gross reinsurance recoverable</TD>
8/12/11 3:54 PM

<TR>
<TR>
COLOR="#000000"></TD>
COLOR="#000000"></TD>
<TR>
COLOR="#000000"></TD>
<TR>
143 of 176
Roman" SIZE="2">Bad debt reserve</TD>
8/12/11 3:54 PM

<TR>
<TR>
COLOR="#000000"></TD>
COLOR="#000000"></TD>
<TR>
COLOR="#000000"></TD>
<TR>
<TR>
144 of 176
Roman" SIZE="2">Net reinsurance recoverable</TD>
8/12/11 3:54 PM

<TR>
<TD ALIGN="left" VALIGN="top">Active operations include the run-off operations of CIS and certain other divisions. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">The Active operations obligations with respect to further funding of the run-off of Century Indemnity Company, a Brandywine subsidiary, are limited
Restructuring Order (the Order). Under the Order, the Company provided $800 million aggregate excess of loss reinsurance agreement, with respect to the Brandywine Runoff. (Refer to the Asbestos and Envir
section of the Managements Discussion and Analysis of Financial Conditions and Results of Operations incorporated into our filed Form 10-K for the year ended December 31, 2003 for additional information
Company obligations.) At June 30, 2004, approximately $466 million in losses and recoverable bad debt reserves were ceded by Century to the aggregate excess of loss reinsurance agreement. </TD></TR><
<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 June 30, 2004, the
in the reinsurance cover was approximately $600 million. </TD></TR></TABLE> 
<TR>
<TR>
<TD VALIGN="top"> Reinsurance Recoverable</TD>
</TABLE>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center">March 31, 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<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>
<TD VALIGN="top"> Reinsurance Recoverable for Active Operations</TD>
<TR>
<TD VALIGN="top"> Categories</TD>
<TD VALIGN="top"> Top 10 reinsurers</TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom">1.6</TD>
<TR>
<TD VALIGN="top"> Other reinsurers balances >$20 million</TD>
<TD VALIGN="top"> Other reinsurers balances <$20 million</TD>
<TR>
<TD VALIGN="top"> Mandatory pools and government agencies</TD>
<TD VALIGN="top"> Captives</TD>
<TR>
<TD VALIGN="top"> Other(1)</TD>
145 of 176
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<TR>
<TD VALIGN="top"> Total</TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom">5.2</TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom">%</TD></TR>
<TR>
</TABLE> At March 31, 2004, $7.1 billion of the
active operations recoverables were from rated reinsurers, of which 86% were rated the equivalent of A- or better by nationally recognized rating agencies. The Company held collateral of $2.1 billion, of which $1.4
usable against existing recoverables. 
<TR>
<TR>
<TD VALIGN="bottom"> Top 10 Reinsurers (net of collateral) (2)<HR WIDTH="294" SIZE="1" NOSHADE ALIGN="left" CO
<TD VALIGN="bottom" COLSPAN="3">Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)</TD></TR>
<TR>
<TD VALIGN="top"> Berkshire Hathaway Insurance Group</TD>
<TD VALIGN="bottom">AIOI Insurance</TD>
<TD VALIGN="bottom">Gerling Group</TD></TR>
<TR>
<TD VALIGN="top"> CIGNA</TD>
<TD VALIGN="bottom">Allianz Group</TD>
<TD VALIGN="bottom">Hartford Insurance Group</TD></TR>
<TR>
<TD VALIGN="top"> Electric Insurance Company</TD>
<TD VALIGN="bottom">American International Group</TD>
<TD VALIGN="bottom">Independence Blue Cross (Amerihealth)</TD></TR>
<TR>
<TD VALIGN="top"> GE Global Insurance Group</TD>
<TD VALIGN="bottom">Arch Capital</TD>
<TD VALIGN="bottom">ING - Internationale Nederlanden Group</TD></TR>
<TR>
<TD VALIGN="top"> Hannover</TD>
<TD VALIGN="bottom">Aspen Insurance Holdings Ltd</TD>
<TD VALIGN="bottom">Liberty Mutual Insurance Companies</TD></TR>
<TR>
<TD VALIGN="top"> Lloyds of London</TD>
<TD VALIGN="bottom">AVIVA</TD>
<TD VALIGN="bottom">Overseas Partners Ltd</TD></TR>
<TR>
<TD VALIGN="top"> Munich Re</TD>
<TD VALIGN="bottom">AXA</TD>
<TD VALIGN="bottom">Renaissance Re Holdings Ltd</TD></TR>
<TR>
<TD VALIGN="top"> St. Paul Travelers Companies</TD>
<TD VALIGN="bottom">Chubb Insurance Group</TD>
<TD VALIGN="bottom">Royal & Sun Alliance Insurance Group</TD></TR>
<TR>
<TD VALIGN="top"> Swiss Re Group</TD>
<TD VALIGN="bottom">CNA Insurance Companies</TD>
<TD VALIGN="bottom">SCOR Group</TD></TR>
<TR>
<TD VALIGN="top"> XL Capital Group</TD>
<TD VALIGN="bottom">Converium Group</TD>
<TD VALIGN="bottom">Sompo Japan</TD></TR>
<TR>
<TD VALIGN="bottom">DaimlerChrysler Insurance Company</TD>
<TD VALIGN="bottom">Toa Reinsurance Company</TD></TR>
<TR>
<TD VALIGN="bottom">Equitas</TD>
<TD VALIGN="bottom">Trenwick Group</TD></TR>
<TR>
<TD VALIGN="bottom">Everest Re Group</TD>
<TD VALIGN="bottom">White Mountains Insurance Group</TD></TR>
<TR>
<TD VALIGN="bottom">Fairfax Financial</TD>
<TD VALIGN="bottom">WR Berkley Corp</TD></TR>
<TR>
<TD VALIGN="bottom">FM Global Group</TD>
<TD VALIGN="bottom">Zurich Financial Services Group</TD></TR>
146 of 176
8/12/11 3:54 PM

<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">(1)Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our
for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory p
<TR>
<TR>
<TD VALIGN="top"> Rein Rec-Active</TD>
</TABLE>
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center">March 31, 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<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>
<TD VALIGN="top">Consolidated Reinsurance Recoverable</TD>
<TR>
<TD VALIGN="top"> Categories</TD>
<TD VALIGN="top"> Top 10 reinsurers</TD>
<TR>
<TD VALIGN="top"> Other reinsurers balances >$20 million</TD>
<TD VALIGN="top"> Other reinsurers balances <$20 million</TD>
<TR>
<TD VALIGN="top"> Mandatory pools and government agencies</TD>
<TD VALIGN="top"> Structured settlements</TD>
<TR>
<TD VALIGN="top"> Captives</TD>
<TD VALIGN="top"> Other</TD>
147 of 176
8/12/11 3:54 PM

<TR>
<TD VALIGN="top"> Total</TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom">6.4</TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom">%</TD></TR>
<TR>
</TABLE> At March 31, 2004, $11.2 billion of
consolidated recoverables were from rated reinsurers, of which 89% were rated the equivalent of A- or better by nationally recognized rating agencies. 
<TR>
<TD VALIGN="bottom"> Top 10 Reinsurers (net of collateral) (2)<HR WIDTH="245" SIZE="1" NOSHADE ALIGN="left" CO
<TD VALIGN="bottom" COLSPAN="3"> Other Reinsurers Balances Greater Than $20 million (net of collateral) (2)<HR
NOSHADE ALIGN="left" COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top"> Berkshire Hathaway Insurance Group</TD>
<TD VALIGN="bottom">AIOI Insurance</TD>
<TD VALIGN="bottom">Hartford Insurance Group</TD></TR>
<TR>
<TD VALIGN="top"> CIGNA</TD>
<TD VALIGN="bottom">Allianz Group</TD>
<TD VALIGN="bottom">Independence Blue Cross (Amerihealth)</TD></TR>
<TR>
<TD VALIGN="top"> Equitas</TD>
<TD VALIGN="bottom">ING - Internationale Nederlanden Group</TD></TR>
<TR>
<TD VALIGN="top"> GE Global Insurance Group</TD>
<TD VALIGN="bottom">Arch Capital</TD>
<TD VALIGN="bottom">IRB - Brasil Resseguros S.A.</TD></TR>
<TR>
<TD VALIGN="top"> Hannover</TD>
<TD VALIGN="bottom">Aspen Insurance Holdings Ltd</TD>
<TD VALIGN="bottom">Liberty Mutual Insurance Companies</TD></TR>
<TR>
<TD VALIGN="top"> Lloyds of London</TD>
<TD VALIGN="bottom">AVIVA</TD>
<TD VALIGN="bottom">Millea Holdings</TD></TR>
<TR>
<TD VALIGN="top"> Munich Re</TD>
<TD VALIGN="bottom">AXA</TD>
<TD VALIGN="bottom" NOWRAP>Mitsui Sumitomo Insurance Company Ltd</TD></TR>
<TR>
<TD VALIGN="top"> St. Paul Travelers Companies</TD>
<TD VALIGN="bottom">Chubb Insurance Group</TD>
<TD VALIGN="bottom">Overseas Partners Ltd</TD></TR>
<TR>
<TD VALIGN="top"> Swiss Re Group</TD>
<TD VALIGN="bottom">CNA Insurance Companies</TD>
<TD VALIGN="bottom">QBE Insurance</TD></TR>
<TR>
<TD VALIGN="top"> XL Capital Group</TD>
<TD VALIGN="bottom">Constellation Reinsurance Co</TD>
<TD VALIGN="bottom">Renaissance Re Holdings Ltd</TD></TR>
<TR>
<TD VALIGN="bottom">Converium Group</TD>
<TD VALIGN="bottom">Royal & Sun Alliance Insurance Group</TD></TR>
<TR>
<TD VALIGN="bottom">DaimlerChrysler Insurance Company</TD>
<TD VALIGN="bottom">SCOR Group</TD></TR>
<TR>
<TD VALIGN="bottom">Dominion Ins. Co. Ltd</TD>
<TD VALIGN="bottom">Sompo Japan</TD></TR>
<TR>
<TD VALIGN="bottom">Electric Insurance Company</TD>
<TD VALIGN="bottom">Toa Reinsurance Company</TD></TR>
<TR>
<TD VALIGN="bottom">Everest Re Group</TD>
<TD VALIGN="bottom">Trenwick Group</TD></TR>
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<TR>
<TD VALIGN="bottom">Fairfax Financial</TD>
<TD VALIGN="bottom">White Mountains Insurance Group</TD></TR>
<TR>
<TD VALIGN="bottom">FM Global Group</TD>
<TD VALIGN="bottom">WR Berkley Corp</TD></TR>
<TR>
<TD VALIGN="bottom">Gerling Group</TD>
<TD VALIGN="bottom">Zurich Financial Services Group</TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP>Great American P&C Insurance Companies</TD>
<TR>
for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees. </TD></TR></TABLE>
<TR>
<TD ALIGN="left" VALIGN="top">Excludes recoverable amounts from companies who are in supervision, rehabilitation or liquidation, or are captive reinsurers, mandatory p
<TR>
<TR>
<TD VALIGN="bottom"> Rein Rec-Consolidated</TD>
</TABLE>
SIZE="1"> Reinsurance Recoverable Analysis - 4 
<TD></TD>
<TD></TD>
<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>
<TD VALIGN="top">Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses </TD>
<TR>
<TD VALIGN="top"> Gross balance at December 31, 2003</TD>
<TD VALIGN="top"> Bad debt reserve at 12/31/03</TD>
<TR>
<TD VALIGN="top"> % of gross</TD>
<TR>
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<TR>
<TR>
<TR>
<TR>
<TR>
150 of 176
Roman" SIZE="2">Net balance at December 31, 2003</TD>
Roman" SIZE="2">Gross balance at March 31, 2004</TD>
Roman" SIZE="2">Bad debt reserve at 3/31/04</TD>
Roman" SIZE="2">% of gross</TD>
Roman" SIZE="2">Net balance at March 31, 2004</TD>
Roman" SIZE="2">Gross balance at June 30, 2004</TD>
Roman" SIZE="2">Bad debt reserve at 6/30/04</TD>
Roman" SIZE="2">% of gross</TD>
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<TR>
<TD VALIGN="top"> Net balance at June 30, 2004</TD>
<TR>
<TR>
<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
issues. </TD></TR></TABLE>
<TR>
for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees. </TD></TR></TABLE> 
<TR>
<TD VALIGN="bottom"> Reinsurance Recoverable 4</TD>
</TABLE>
SIZE="1"> Investment Portfolio 
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">June 30 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">March 31 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> December 31 Market Value</TD>
<TR>
<TD VALIGN="top"> Fixed maturities</TD>
<TD VALIGN="top"> Securities on loan</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
152 of 176
Roman" SIZE="2">Short-term investments</TD>
Roman" SIZE="2">Cash</TD>
Roman" SIZE="2">Asset Allocation by Market Value</TD>
Roman" SIZE="2">Treasury</TD>
Roman" SIZE="2">Agency</TD>
Roman" SIZE="2">Corporate</TD>
Roman" SIZE="2">Mortgage-backed securities</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
153 of 176
Roman" SIZE="2">Asset-backed securities</TD>
Roman" SIZE="2">Municipal</TD>
Roman" SIZE="2">Non-US</TD>
Roman" SIZE="2">Cash & cash equivalent</TD>
Roman" SIZE="2">Credit Quality by Market Value</TD>
Roman" SIZE="2">AAA</TD>
Roman" SIZE="2">AA</TD>
Roman" SIZE="2">A</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
154 of 176
Roman" SIZE="2">BBB</TD>
Roman" SIZE="2">BB</TD>
Roman" SIZE="2">B</TD>
Roman" SIZE="2">Other</TD>
Roman" SIZE="2">Cost/Amortized Cost</TD>
Roman" SIZE="2">Fixed maturities</TD>
Roman" SIZE="2">Securities on loan</TD>
8/12/11 3:54 PM
<TR>
<TD VALIGN="top"> Short term investments</TD>
<TD VALIGN="top"> Cash</TD>
<TR>
<TD VALIGN="top"> Subtotal</TD>
<TR>
<TD VALIGN="top"> Equity securities</TD>
<TD VALIGN="top"> Other investments</TD>
<TR>
<TR>
<TR>
<TD VALIGN="top"> Avg. duration of fixed maturities, adj. for int. rate swaps</TD>
<TD VALIGN="bottom" ALIGN="right">3.6 years</TD>
<TR>
<TD VALIGN="top"> Avg. market yield of fixed maturities</TD>
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<TD VALIGN="top"> Avg. credit quality</TD>
<TD VALIGN="bottom" ALIGN="right">AA</TD>
<TR>
<TR>
<TD VALIGN="bottom"> Investments</TD>
</TABLE>
SIZE="1"> Investment Portfolio - 2 Investment portfolio 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="9" ALIGN="center">Top 10 Exposures - Fixed Maturity Investments excluding Assured Guaranty</TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center">Including Assured Guaranty (Single Name Credit Default Swaps)</TD></TR>
<TR>
<TD COLSPAN="2" VALIGN="bottom"> </TD>
<TD VALIGN="bottom" ALIGN="center">(Restated)</TD>
<TD COLSPAN="2" VALIGN="bottom"> </TD>
<TD VALIGN="bottom" ALIGN="center">(As Originally Reported)</TD>
<TD COLSPAN="2" VALIGN="bottom"> </TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"> June 30, 2004<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"> March 31, 2004<HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"> March 31, 2004<HR SIZE="1" NOSHADE COLOR="#000000"></TD></
<TD VALIGN="top"> HSBC Holdings Plc</TD>
<TD VALIGN="bottom">HSBC Holdings Plc</TD>
<TD VALIGN="bottom">General Electric</TD>
<TR>
<TD VALIGN="top"> Citigroup Inc</TD>
<TD VALIGN="bottom">General Electric</TD>
<TD VALIGN="bottom">Citigroup Inc</TD>
<TD VALIGN="top"> General Electric</TD>
<TD VALIGN="bottom">Citigroup Inc</TD>
<TD VALIGN="bottom">HSBC Holdings Plc</TD>
<TR>
<TD VALIGN="top"> General Motors</TD>
<TD VALIGN="bottom">Goldman Sachs Group Inc</TD>
<TD VALIGN="bottom">Morgan Stanley</TD>
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<TD VALIGN="top"> Goldman Sachs Group Inc</TD>
<TD VALIGN="bottom">Morgan Stanley</TD>
<TD VALIGN="bottom">General Motors</TD>
<TR>
<TD VALIGN="top"> Bank of America Corp</TD>
<TD VALIGN="bottom">General Motors</TD>
<TD VALIGN="bottom">Verizon Communications</TD>
<TD VALIGN="top"> Morgan Stanley</TD>
<TD VALIGN="bottom">Bank of America Corp</TD>
<TD VALIGN="bottom">Goldman Sachs Group Inc</TD>
<TR>
<TD VALIGN="top"> JP Morgan Chase & Co.</TD>
<TD VALIGN="bottom">Ford Motor Co</TD>
<TD VALIGN="bottom">Bank of America Corp</TD>
<TD VALIGN="top"> Ford Motor Co</TD>
<TD VALIGN="bottom">Verizon Communications</TD>
<TR>
<TD VALIGN="top"> Verizon Communications</TD>
<TD VALIGN="bottom">Vodafone Group PLC</TD>
<TD VALIGN="bottom">Ford Motor Co</TD>
<TR>
<TR>
<TD VALIGN="bottom"> Investments 2</TD>
</TABLE>
SIZE="1"> Realized and Unrealized Gains (Losses) 
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="8" ALIGN="center"> Three months ended June 30, 2004<HR SIZE="1" NOSHADE COLOR
<TD VALIGN="bottom" COLSPAN="8" ALIGN="center">Six months ended June 30, 2004 <HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> Net Realized Gains (Losses) (1)<HR SIZE="1" NOSHADE COLOR="#000000"><
<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="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 Impact<HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TD VALIGN="top" NOWRAP>Investment Portfolio Gains (Losses)</TD>
<TR>
<TD VALIGN="top" NOWRAP>Fixed maturities</TD>
<TD VALIGN="bottom" ALIGN="right"> (7)</TD>
<TD VALIGN="bottom" ALIGN="right">(704)</TD>
<TD VALIGN="bottom" ALIGN="right">(481)</TD></TR>
<TD VALIGN="top" NOWRAP>Interest rate swaps</TD>
<TR>
<TD VALIGN="top" NOWRAP>Equity securities</TD>
<TD VALIGN="top" NOWRAP>Equity and fixed income derivatives</TD>
<TR>
<TD VALIGN="top" NOWRAP>Foreign exchange gains (losses)</TD>
<TD VALIGN="top" NOWRAP>Other</TD>
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<TR>
<TD VALIGN="top"> Total inv. portfolio gains (losses)</TD>
<TR>
<TD VALIGN="top" NOWRAP>Other FAS 133 adjustments</TD>
<TR>
<TD VALIGN="top"> Total gains (losses)</TD>
<TR>
<TD VALIGN="top" NOWRAP>Income tax (expense) benefit</TD>
<TR>
<TD VALIGN="top"> Net gains (losses)</TD>
<TD VALIGN="bottom" ALIGN="right"> 33</TD>
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<TR>
<TR>
<TD ALIGN="left" VALIGN="top">Includes impairments of $3M for fixed maturities and $2M for equities. Year to date includes impairments of $4M for fixed maturities and $3M for equities
 
<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Three months ended June 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center">Six months ended June 30, 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Net Impact <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" NOWRAP> Investment Portfolio Gains (Losses)</TD>
<TR>
<TD VALIGN="top" NOWRAP> Fixed maturities</TD>
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<TR>
<TR>
<TR>
161 of 176
SIZE="2">Interest rate swaps</TD>
SIZE="2">Equity securities</TD>
SIZE="2">Equity and fixed income derivatives</TD>
SIZE="2">Foreign exchange gains (losses)</TD>
SIZE="2">Other</TD>
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<TR>
<TR>
<TR>
<TR>
162 of 176
SIZE="2">Total inv. portfolio gains (losses)</TD>
SIZE="2">Other FAS 133 adjustments</TD>
SIZE="2">Total gains (losses)</TD>
SIZE="2">Income tax (expense) benefit</TD>
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<TD VALIGN="top" NOWRAP> Net gains (losses)</TD>
<TR>
<TR>
<TD ALIGN="left" VALIGN="top">The quarter includes impairments of $1M for fixed maturities, $8M for equities and $16M for other. Year to date includes impairments of $19M for fixed ma
and $16M for other. </TD></TR></TABLE> 
<TR>
<TR>
<TD VALIGN="bottom"> Investment Gains (Losses)</TD>
</TABLE>
SIZE="1"> Capital Structure 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> Total
163 of 176
FACE="Times New Roman" SIZE="1">June 30 March 31 December 31 December 31 </TD>
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<TR>
<TD VALIGN="top"> Total long-term debt (1)</TD>
<TR>
<TD VALIGN="top"> Total debt</TD>
<TR>
<TR>
<TD VALIGN="top"> Total trust preferreds</TD>
<TR>
<TD VALIGN="top"> Mezzanine equity (2)</TD>
<TR>
<TR>
<TD VALIGN="top"> Perpetual preferred (3)</TD>
<TD VALIGN="top"> Ordinary shareholders equity</TD>
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<TR>
<TR>
<TR>
FACE="Times New Roman" SIZE="2" COLOR="#000000"></TD>
<TR>
<TR>
165 of 176
Roman" SIZE="2">Total shareholders equity</TD>
Roman" SIZE="2">Total capitalization</TD>
Roman" SIZE="2">Tangible shareholders equity (4)</FO
Roman" SIZE="2">Leverage ratios</TD>
Roman" SIZE="2">Debt/ total capitalization</TD>
Roman" SIZE="2">Debt plus trust preferreds/ total capitalization</TD>
8/12/11 3:54 PM

<TR>
<TD VALIGN="top"> Debt/ tangible equity</TD>
<TD VALIGN="top"> Debt plus trust preferreds and mezzanine equity/ tangible equity</TD>
<TR>
<TD VALIGN="top"> Debt plus total preferred stock/ total capitalization</TD>
<TR>
<TD ALIGN="left" VALIGN="top">Long-term debt increased due to the early issuance of $500 million of senior debt which will be used to settle $400 million of short term debt and to red
preferred securities in the third quarter of 2004. </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> 
<TR>
<TD VALIGN="bottom">Capital Structure</TD>
</TABLE>
SIZE="1"> Non-GAAP Financial Measures (in millions of U.S. dollars) </
STYLE="margin-top:0px;margin-bottom:0px">Regulation G - Non-GAAP Financial Measures 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 27. The following non-GAAP measure is a common performance measurement and is defined as income (loss) excluding net realized gains (losses) on investments and the tax benefit (expen
(losses) 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>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
166 of 176
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<TR>
<TD VALIGN="top"> Net income, as reported</TD>
<TR>
<TR>
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<TD VALIGN="top" NOWRAP> Income excluding net realized gains (losses)</TD>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Reconciliation Non-GAAP</TD>
</TABLE>
SIZE="1"> Diluted Book Value per Ordinary Share (in millions of U.S. dollars, except share and per share data) Reconciliation of Book Value per Ordinary Share to Diluted
Share 
<TR>
<TR>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> June 30 March 31 December 31 Shareholders equity</TD>
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<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
<TR>
169 of 176
SIZE="2">Net proceeds from assumed conversions of options</TD>
SIZE="2">Proceeds from issuance of preferred shares</TD>
SIZE="2">Numerator for diluted book value per share calculation</TD>
SIZE="2">Less: goodwill</TD>
SIZE="2">Numerator for diluted tangible book value per share</TD>
SIZE="2">Ordinary shares outstanding - end of period</TD>
SIZE="2">Shares issued from assumed conversions of options</TD>
8/12/11 3:54 PM

<TR>
<TR>
SIZE="2">Denominator for diluted and diluted tangible book value</TD>
SIZE="2">Book value per ordinary share</TD>
SIZE="2">Diluted book value per ordinary share</TD>
SIZE="2">Diluted tangible book value per ordinary share</TD>
<TR>
<TR>
<TD VALIGN="bottom"> Reconciliation Book Value</TD>
</TABLE>
SIZE="1"> Comprehensive Income 
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TR>
<TD VALIGN="bottom"> Consolidated Statement of Comprehensive Income<HR WIDTH="347" SIZE="1" NOSHADE A
COLOR="#000000"></TD>
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<TD VALIGN="bottom" COLSPAN="2" ALIGN="center">Full` Year 2003 <HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TR>
<TD VALIGN="top"> Net unrealized appreciation (depreciation) on investments</TD>
<TD VALIGN="top"> Unrealized appreciation (depreciation) on investments</TD>
<TR>
<TD VALIGN="top"> Reclassification adjustment for net realized gains (losses) included in net income</TD>
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<TR>
<TR>
172 of 176
Roman" SIZE="2">Cumulative translation adjustment</TD>
Roman" SIZE="2">Minimum pension liability adjustment</TD>
Roman" SIZE="2">Income tax (expense) benefit related to other comprehensive income items</TD>
Roman" SIZE="2">Other comprehensive income (loss)</TD>
8/12/11 3:54 PM

<TR>
<TD VALIGN="top"> Comprehensive income (loss)</TD>
<TR>
<TR>
<TR>
<TD VALIGN="bottom"> Comprehensive Income</TD>
</TABLE>
SIZE="1"> Glossary </FO
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STYLE="margin-top:0px;margin-bottom:0px">Annualized return on ordinary shareholders equity (ROE): Income (loss) excluding net realized gains (losses) less perpetual prefe
mezzanine equity dividends divided by average ordinary shareholders equity for the period. To annualize a quarterly rate multiply by four. Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the propert
services operations. Calculated on a GAAP basis. Ordinary shareholders equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued. Diluted tangible book value per ordinary share: Ordinary s
net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued. Effective tax rate: Income tax expense divided by the sum of income tax expense and income (loss) excludi
(losses). FAS 115: Unrealized gains
the deferred tax component included in shareholders equity. Life underwriting income: Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses. NM: Not meaningful. 
STYLE="margin-top:0px;margin-bottom:0px">Ordinary shareholders equity: Shareholders equity less perpetual preferred shares. P & C: Property and casualty. Property and casualty combined ratios: Loss and loss expen
acquisition cost ratios and administrative expense ratios excluding life reinsurance business and financial services segment. Calculated on a GAAP basis. <FO
SIZE="1"> Return on ordinary shareholders equity (ROE): Income (loss) excluding net realized gains (losses) l
securities and mezzanine equity dividends divided by average ordinary shareholders equity. Tangible equity: Shareholders equity less goodwill. Total capitalization: Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders equity. YTD: Year to date. 
<TR>
<TD VALIGN="bottom"> Glossary</TD>
</TABLE>
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175 of 176
8/12/11 3:54 PM
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
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http://www.sec.gov/Archives/edgar/data/896159/000119312504125504/0001193125-04-1255...

-----BEGIN PRIVACY-ENHANCED MESSAGE----Proc-Type: 2001,MIC-CLEAR

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

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Page 3/6 </FONT></P>

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

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

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

Roman" SIZE="2">Life and annuity benefits</FONT></P></TD>

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

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

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

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

Roman" SIZE="2">Income excluding net realized gains (1)</FONT></P></TD>

Roman" SIZE="2">Net realized gains</FONT></P></TD>

Roman" SIZE="2">Tax expense on net realized gains</FONT></P></TD>

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

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

<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">$2.94</FONT></TD>

<TD VALIGN="bottom" WIDTH="6%"></TD>

<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</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 VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,406</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 NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

Roman" SIZE="2"><B><U>Income (Loss) Excluding Net Realized Gains (Losses)(1)</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"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>

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

<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">991</FONT></TD>

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

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

<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,330</FONT></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"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>

<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">84</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)</FONT></P></TD>

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

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

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

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

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

Roman" SIZE="2">Tax benefit (expense) on net realized gains (losses)</FONT></P></TD>

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

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

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

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

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

<TD NOWRAP VALIGN="bottom"><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>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SIZE="2">Total shareholders equity, excl. AOCI</FONT></P></TD>

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

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

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

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

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

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

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

Roman" SIZE="1"><B>Insurance -<BR>North<BR>American</B></FONT><BR><HR SIZE="1" NOSHADE COLOR="#000000"></TD>

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

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