Current Report Filing (8-k)

Share Name	Share Symbol	Market	Type
DBA Chubb Limited	NYSE:CB	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.04	0.02%	249.26	250.30	248.245	249.66	565,940	18:25:11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant To Section 13 or 15 (d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – July 21, 2015

ACE LIMITED

(Exact name of registrant as specified in its charter)

Switzerland

1-11778

98-0091805

(State or other jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

Baerengasse 32

CH-8001 Zurich, Switzerland

Telephone: +41 (0)43 456 76 00

(Address of principal executive offices)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On July 21, 2015, ACE Limited issued a Press Release reporting its second quarter 2015 results and the availability of its second quarter 2015 Financial Supplement. The Press Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits

(d) Exhibits


Exhibit Number		Description

99.1		Press Release, Dated July 21, 2015, Reporting Second Quarter 2015 Results

99.2		Second Quarter 2015 Financial Supplement

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 by the undersigned thereunto duly authorized.


ACE LIMITED

By:		/s/ Philip V. Bancroft
		Philip V. Bancroft Chief Financial Officer

DATE: July 21, 2015

EXHIBIT INDEX


Number	Description	Method of Filing

99.1	Press Release, Dated July 21, 2015,		Furnished herewith
	Reporting Second Quarter 2015 Results

99.2	Second Quarter 2015 Financial Supplement		Furnished herewith

Exhibit 99.1

ACE Limited

Bärengasse 32

CH-8001 Zurich

Switzerland

acegroup.com

@ACEGroup


NEWS RELEASE

ACE Reports Second Quarter Operating Income of $788 Million or

$2.40 per Share, P&C Combined Ratio of 87.7% and Operating

Return on Equity of 11.4%

•

Net income of $942 million, up 21%

•

Global P&C net premiums written, which exclude Agriculture, up 6.4% or 13.2% in constant dollars

•

P&C underwriting income of $478 million, up 5.5% in constant dollars

•

Net investment income of $562 million, up 3.1% in constant dollars

•

Operating cash flow of $816 million

•

Unfavorable foreign currency movement, compared with the prior year, negatively impacted operating income by $29 million, or $0.09 per share, and reduced Global P&C net premiums written growth by seven percentage points

•

The transfer of the Fireman’s Fund in-force business contributed $15 million of operating income that is
non-recurring in 2016

Zurich – July 21, 2015 – ACE Limited (NYSE: ACE) today reported net income for the quarter ended June 30, 2015, of $2.86 per share, compared with $2.28 per share for the same quarter last year.⁽¹⁾ Operating income was $2.40 per share, compared with $2.42 per share for the same quarter last year. Operating return on equity for the quarter was 11.4%. The property and casualty (P&C) combined ratio for the quarter was 87.7%. Book value per share increased 0.5% from March 31, 2015, to $91.27. Book value per share growth was primarily impacted by rising interest rates that resulted in unrealized losses of $672 million, after-tax, in the company’s investment portfolio, which are recorded in other comprehensive income on the balance sheet. The unrealized losses were partially offset by favorable foreign currency movement in the quarter and realized gains related to the company’s variable annuity reinsurance business, which together amounted to $205 million, after-tax. Tangible book value per share decreased 1.5% from March 31, 2015, to $72.84, compared with the prior year, and was impacted by goodwill and intangibles related to the Fireman’s Fund acquisition that closed during the quarter. Excluding the impact of the acquisition, tangible book value per share increased 0.5%.


ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.			1

ACE LIMITED NEWS RELEASE

Second Quarter Summary

(in millions, except per share amounts)

(Unaudited)


									(Per Share – Diluted)
	2015		2014			Change			2015		2014			Change
Operating income, net of tax	$	788	$	825			(4.5	)%	$	2.40	$	2.42			(0.8	)%
Adjusted net realized gains (losses), net of tax		154		(46	)		NM			0.46		(0.14	)		NM

Net income	$	942	$	779			20.8	%	$	2.86	$	2.28			25.4	%

For the six months ended June 30, 2015, net income was $4.91 per share, compared with $4.43 per share for 2014. Operating income was $4.64 per share, compared with $4.69 per share for 2014. The P&C combined ratio for the six months ended June 30, 2015, was 88.0% versus 88.2% prior year. Book value and tangible book value per share increased 1.4% and 0.3%, respectively, from December 31, 2014. Book value and tangible book value per share growth were negatively impacted by unrealized losses in the investment portfolio and unfavorable foreign currency movement during the year. Excluding foreign currency movement, book value per share increased 2.5%. Excluding foreign currency movement and the Fireman’s Fund acquisition that closed during the year, tangible book value per share increased 3.2%.

Six Months Ended Summary

(in millions, except per share amounts)

(Unaudited)


									(Per Share – Diluted)
	2015		2014			Change			2015		2014			Change
Operating income, net of tax	$	1,533	$	1,602			(4.3	)%	$	4.64	$	4.69			(1.1	)%
Adjusted net realized gains (losses), net of tax		90		(89	)		NM			0.27		(0.26	)		NM

Net income	$	1,623	$	1,513			7.2	%	$	4.91	$	4.43			10.8	%

Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had an excellent second quarter with earnings per share essentially flat with prior year as a strong dollar impacted both revenue and earnings. After-tax operating income was $788 million, or $2.40 per share, leading to an operating ROE of 11.4%. We produced strong underwriting results marked by a P&C combined ratio of 87.7% and underwriting income that was flat with prior year and up 5.5% in constant dollars. Investment income was up 3% in constant currency – a terrific result given the interest rate environment. Global P&C net premiums written grew about 6.5%, or over 13% when adjusted for foreign exchange, as we took advantage of growth opportunities in the U.S., Asia and Latin America.

“The highlight of the quarter was our announced agreement to acquire Chubb. We are moving quickly and the senior leadership of both companies has formed teams that are already engaged in integration planning. The sense of excitement and energy from the leadership of both companies is inspiring. We


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		2

ACE LIMITED NEWS RELEASE

are planning to file an S-4 by the end of the month and are on track to file our regulatory approvals. In sum, I am even more convinced of the potential opportunity our combined companies represent in terms of talent and capabilities.”

Operating highlights for the quarter ended June 30, 2015, were as follows:


(in millions of U.S. dollars except for percentages)	2Q 2015			2Q 2014			Change

P&C
Net premiums written	$	4,284		$	4,061			5.5	%
Net premiums written constant-dollar				$	3,839			11.6	%
Underwriting income	$	478		$	478			—
Combined ratio		87.7	%		87.5	%
Current accident year underwriting income excluding catastrophe losses	$	449		$	432			3.6	%
Current accident year combined ratio excluding catastrophe losses		88.4	%		88.7	%

Global P&C (excludes Agriculture)
Net premiums written	$	3,905		$	3,673			6.4	%
Net premiums written constant-dollar				$	3,451			13.2	%
Underwriting income	$	457		$	451			1.4	%
Combined ratio		87.1	%		87.1	%
Current accident year underwriting income excluding catastrophe losses	$	421		$	396			6.0	%
Current accident year combined ratio excluding catastrophe losses		88.2	%		88.7	%

Agriculture
Net premiums written	$	379		$	388			(2.4	)%
Underwriting income	$	21		$	27			(24.4	)%
Combined ratio		93.6	%		91.8	%
Current accident year underwriting income excluding catastrophe losses	$	28		$	36			(23.3	)%
Current accident year combined ratio excluding catastrophe losses		91.4	%		89.1	%


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		3

ACE LIMITED NEWS RELEASE

•

P&C net premiums earned increased 0.8%, or 7% in constant dollars. Global P&C net premiums earned increased 1.2%, or 8% in constant dollars.

•

Underwriting income included a $49 million benefit related to the transfer of the Fireman’s Fund in-force business at the time of the transaction and will be non-recurring in 2016. This benefit was partially offset by purchase accounting intangible amortization of $29 million, included in other income, resulting in a net $20 million pre-tax, or $15 million after-tax, increase in operating income which will not recur in 2016.

•

The P&C expense ratio for the quarter was 28.8%, compared with 29.3% last year. The Global P&C expense ratio, which excludes Agriculture, was 30.6% compared with 31.4% last year. The Agriculture expense ratio for the quarter was 8.3% compared with 7.4% last year.

•

Total pre-tax and after-tax catastrophe losses including reinstatement premiums were $124 million (3.2 percentage points of the combined ratio) and $106 million, respectively, compared with $80 million (2.1 percentage points of the combined ratio) and $67 million, respectively, last year.

•

Favorable prior period development pre-tax and after-tax for the quarter were $153 million (3.9 percentage points of the combined ratio) and $128 million, respectively, compared with $126 million (3.3 percentage points of the combined ratio) and $106 million, respectively, last year.

•

Operating cash flow was $816 million for the quarter.

•

Net loss reserves increased $717 million in the quarter, principally reflecting the acquisition of Fireman’s Fund and favorable foreign currency movement since March 31, 2015. Net loss reserves increased $132 million for the year.

•

Net investment income was $562 million compared with $556 million last year. This quarter was negatively impacted by foreign currency movement of $11 million.

•

Net realized and unrealized losses pre-tax totaled $559 million for the quarter. Net realized gains of $161 million included a gain of $102 million from derivative accounting related to variable annuity reinsurance. Net unrealized losses of $720 million included an unrealized loss of $850 million in the investment portfolio, primarily due to rising interest rates, partially offset by an unrealized foreign exchange gain of $136 million.

•

Operating return on equity was 11.4% for the quarter and 11.0% year to date. Return on equity computed using net income was 12.7% for the quarter and 11.0% year to date.

•

Share repurchases totaled $394 million, or approximately 3.7 million shares, during the quarter. The company has repurchased approximately 6.7 million shares for $734 million through June 30, 2015. The company has discontinued its share repurchase program in connection with the announced planned acquisition of Chubb.

•

Book value per share increased 0.5% to $91.27 from $90.81 at March 31, 2015, and increased 1.4% from $90.02 at December 31, 2014. For the year, book value per share, excluding foreign currency movement, increased 2.5% from December 31, 2014.

•

Tangible book value per share decreased 1.5% to $72.84 from $73.94 at March 31, 2015, and increased 0.3% from $72.61 at December 31, 2014. For the year, tangible book value per share, excluding foreign currency movement and the impact of goodwill and intangibles related to the acquisition of Fireman’s Fund, increased 3.2%.

Details of financial results by business segment are available in the ACE Limited Financial Supplement. Key segment items for the quarter ended June 30, 2015, include:

•

Insurance – North American P&C: Net premiums written increased 20.8%. Gross premiums written and net premiums written included $428 million and $252 million, respectively, from the transfer of the Fireman’s Fund in-force business at the time of the transaction and will be non-recurring in 2016. Excluding the transfer, net premiums written increased 6% on a constant-dollar basis. The combined ratio was 85.2% compared with 87.1%. Excluding the transfer, the combined ratio was 88.1%. The current accident year combined ratio excluding catastrophe losses was 85.0% compared with 87.3%.


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		4

ACE LIMITED NEWS RELEASE

•

Insurance – North American Agriculture: Net premiums written decreased 2.4%. The combined ratio was 93.6% compared with 91.8%. The current accident year combined ratio excluding catastrophe losses was 91.4% compared with 89.1%.

•

Insurance – Overseas General: Net premiums written decreased 5.1%, or increased 7.6% on a constant-dollar basis. The combined ratio was 89.2% compared with 87.1%. The current accident year combined ratio excluding catastrophe losses was 89.8% compared with 89.3%.

•

Global Reinsurance: Net premiums written decreased 5.9%, or 3.9% on a constant-dollar basis. The combined ratio was 65.7% compared with 69.9%. The current accident year combined ratio excluding catastrophe losses was 79.6% compared with 75.4%.

•

Life segment: Operating income was $67 million compared with $72 million. International life insurance net premiums written and deposits collected increased 8.2% on a constant-dollar basis for the year.

Please refer to the ACE Limited Financial Supplement, dated June 30, 2015, which is posted on the company’s website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure.

ACE will hold its second quarter earnings conference call on Wednesday, July 22, 2015, beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live webcast at www.acegroup.com or by dialing 800-967-7188 (within the United States) or 719-325-2322 (international), passcode 1713107. Please refer to the ACE Group website in the Investor Information section under Calendar of Events for details. A replay of the call will be available until Wednesday, August 5, 2015, and the archived webcast will be available for approximately one month. To listen to the replay, please dial 888-203-1112 (in the United States) or 719-457-0820 (international), passcode 1713107.

About ACE Group

ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 54 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at: www.acegroup.com.

Investor Contact

Helen Wilson: (441) 299-9283; helen.wilson@acegroup.com

Media Contact

Jeffrey Zack: (212) 827-4444; jeffrey.zack@acegroup.com


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		5

ACE LIMITED NEWS RELEASE

⁽¹⁾	All comparisons are with the same period last year unless specifically stated.

Regulation G – Non-GAAP Financial Measures

In presenting our results, we included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations and financial condition. However, they should not be viewed as a substitute for measures determined in accordance with generally accepted accounting principles (GAAP).

Throughout this document there are various measures presented on a constant-dollar basis (i.e., excludes the impact of foreign exchange). We believe it is useful to evaluate the trends in our results, exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted, as these exchange rates could fluctuate significantly between periods and distort the analysis of trends. The impact is determined by assuming constant foreign exchange rates between periods by translating prior period results using the same local currency exchange rates as the comparable current period.

Adjusted net realized gains (losses), net of tax, includes net realized gains (losses) and net realized gains (losses) recorded in other income (expense) related to unconsolidated subsidiaries, and excludes realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing impacts underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations, and therefore realized gains and losses from these derivatives are reclassified to adjusted losses and loss expenses. The P&C combined ratio includes adjusted losses and loss expenses in the ratio numerator.

Underwriting income, P&C underwriting income, and Global P&C underwriting income are calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs and administrative expenses from net premiums earned. P&C underwriting income also includes gains (losses) on crop derivatives. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest and income tax expense and adjusted net realized gains (losses). Current accident year underwriting income excluding catastrophe losses is underwriting income adjusted to exclude catastrophe losses and prior period development (PPD). We believe it is useful to exclude catastrophe losses, as they are not predictable as to timing and amount, and PPD as these unexpected loss developments on historical reserves are not indicative of our current underwriting performance. We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

Operating income or income excluding adjusted net realized gains (losses), net of tax is a common performance measurement for insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude adjusted net realized gains (losses) because the amount of these gains (losses) is heavily influenced by the availability of market opportunities. In addition, we disclose operating income excluding the impact of foreign exchange in order to adjust for the distortive effects of fluctuations in exchange rates.

P&C combined ratio excluding catastrophe losses and PPD and current accident year P&C combined ratio excluding catastrophe losses exclude impacts of catastrophe losses and PPD. We believe this measure provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property and casualty business that may be obscured by these items.


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		6

ACE LIMITED NEWS RELEASE

Global P&C performance metrics comprise consolidated operating results (including corporate) and exclude the operating results of the company’s Life and Insurance – North American Agriculture segments. We believe that these measures are useful and meaningful to investors as they are used by management to assess the company’s global P&C operations which are the most economically similar. We exclude the Insurance – North American Agriculture and Life segments because the results of these businesses do not always correlate with the results of our global P&C operations.

International life net premiums written and deposits collected, is adjusted to include deposits collected on universal life and investment contracts (life deposits). Life deposits are not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our life insurance business because new life deposits are an important component of production and key to our efforts to grow our business.

Operating return on equity (ROE) or ROE calculated using operating income is an annualized financial measure. The ROE numerator includes income adjusted to exclude adjusted net realized gains (losses), net of tax. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate, multiply by four. Annualized ROE calculated using operating income is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.

Tangible book value per common share is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding. We believe that goodwill and other intangible assets are not indicative of our underlying insurance results or trends and make book value comparisons to less acquisitive peer companies less meaningful. In addition, we disclose per share measures for book value and tangible book value that exclude the impact of foreign currency fluctuations during 2015 in order to adjust for the distortive effects of fluctuations in exchange rates.

Tangible book value per common share excluding 2015 acquisitions is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding. The numerator adds back the goodwill and other intangible assets related to the acquisition of the Fireman’s Fund high net worth personal lines business in order to control for the distortive effect of acquisitions.

Other income (expense) – operating excludes from consolidated Other income (expense) the portion of net realized gains and losses related to unconsolidated entities and gains and losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP. Net realized gains (losses) related to unconsolidated entities is excluded from operating income in order to enhance the understanding of our core results of operations as they are heavily influenced by, and fluctuate in part according to market conditions.

See reconciliation of Non-GAAP Financial Measures on pages 22-24 in the Financial Supplement. These measures should not be viewed as a substitute for net income, return on equity, or effective tax rate determined in accordance with GAAP.

NM – not meaningful comparison


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		7

ACE LIMITED NEWS RELEASE

Cautionary Statement Regarding Forward-Looking Statements:

Forward-looking statements made in this press release, such as those related to company performance, including 2015 performance and growth opportunities, and statements about the benefits of the proposed transaction involving ACE and Chubb, ACE’s and Chubb’s plans, objectives, expectations and intentions and other statements that are not historical facts reflect our 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 uncertainties that could cause actual results to differ materially, including without limitation, the following: competition, pricing and policy term trends, the levels of new and renewal business achieved, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and performance of acquired companies, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war, economic, political, regulatory, insurance and reinsurance business conditions, potential strategic opportunities including acquisitions and our ability to achieve and integrate them, as well as management’s response to these factors, and other factors identified in our filings with the Securities and Exchange Commission (SEC).

In addition, with regard to the proposed transaction involving ACE and Chubb, important factors that could cause actual results to differ materially from those indicated by the forward-looking statements include, without limitation, the following: the inability to complete the transaction in a timely manner; the inability to complete the transaction due to the failure of Chubb’s shareholders to approve the transaction agreement or the failure of ACE shareholders to approve, among other matters, the issuance of ACE common shares in connection with the transaction; the failure to satisfy other conditions to completion of the transaction, including receipt of required regulatory approvals; the failure of the proposed transaction to close for any other reason; the possibility that any of the anticipated benefits of the proposed transaction will not be realized; the risk that integration of Chubb’s operations with those of ACE will be materially delayed or will be more costly or difficult than expected; the effect of the announcement of the transaction on ACE’s, Chubb’s or the combined company’s respective business relationships, operating results and business generally; and diversion of management’s attention from ongoing business operations and opportunities. In addition, you should carefully consider the risks and uncertainties and other factors that may affect future results of the combined company described in the section entitled “Risk Factors” in the joint proxy statement/prospectus to be delivered to ACE’s and Chubb’s respective shareholders, and in ACE’s and Chubb’s respective filings with the SEC.

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. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This press release may be deemed to be solicitation material in respect of the proposed transaction between ACE and Chubb. In connection with the proposed transaction, ACE intends to file a registration statement on Form S-4, containing a joint proxy statement/prospectus with the SEC. The final joint proxy statement/prospectus will be delivered to the


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		8

ACE LIMITED NEWS RELEASE

shareholders of ACE and Chubb. This press release is not a substitute for the registration statement, definitive joint proxy statement/prospectus or any other documents that ACE or Chubb may file with the SEC or send to shareholders in connection with the proposed transaction. SHAREHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Shareholders will be able to obtain copies of the joint proxy statement/prospectus and other documents filed with the SEC (when available) free of charge at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by ACE will be made available free of charge on ACE’s website at www.acegroup.com. Copies of documents filed with the SEC by Chubb will be made available free of charge on Chubb’s website at www.chubb.com.

Participants in Solicitation

ACE, Chubb and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of ACE is set forth in the proxy statement for ACE’s 2015 Annual General Meeting, which was filed with the SEC on April 8, 2015, and ACE’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 27, 2015. Information about the directors and executive officers of Chubb is set forth in the proxy statement for Chubb’s 2015 Annual Meeting of Shareholders, which was filed with the SEC on March 13, 2015, and Chubb’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 26, 2015. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. You may obtain free copies of these documents as described above.

(tables to follow)


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		9

ACE LIMITED NEWS RELEASE

ACE Limited

Summary Consolidated Balance Sheets

(in millions of U.S. dollars, except per share data)

(Unaudited)


	June 30 2015		December 31 2014

Assets
Investments	$	63,265	$	62,904
Cash		790		655
Insurance and reinsurance balances receivable		5,757		5,426
Reinsurance recoverable on losses and loss expenses		11,775		11,992
Other assets		18,253		17,271

Total assets	$	99,840	$	98,248


Liabilities
Unpaid losses and loss expenses	$	38,230	$	38,315
Unearned premiums		8,879		8,222
Other liabilities		23,176		22,124

Total liabilities		70,285		68,661


Shareholders’ equity
Total shareholders’ equity		29,555		29,587

Total liabilities and shareholders’ equity	$	99,840	$	98,248


Book value per common share	$	91.27	$	90.02


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		10

ACE LIMITED NEWS RELEASE

ACE Limited

Summary Consolidated Financial Data

(in millions of U.S. dollars, except share, per share data, and ratios)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30						June 30
	2015			2014			2015			2014
Gross premiums written	$	6,504		$	6,006		$	11,826		$	11,380
Net premiums written		4,784			4,559			8,860			8,744
Net premiums earned		4,360			4,332			8,287			8,302
Losses and loss expenses		2,417			2,388			4,539			4,549
Policy benefits		153			144			295			258
Policy acquisition costs		727			758			1,434			1,486
Administrative expenses		578			566			1,132			1,101
Net investment income		562			556			1,113			1,109
Net realized gains (losses)		126			(73	)		37			(177	)
Interest expense		71			72			139			143
Other income (expense):
Gains (losses) from separate account assets		6			17			17			11
Other		(23	)		8			(29	)		31
Income tax expense		143			133			263			226

Net income	$	942		$	779		$	1,623		$	1,513


*Diluted earnings per share:*

Operating income	$	2.40		$	2.42		$	4.64		$	4.69
Net income	$	2.86		$	2.28		$	4.91		$	4.43

Weighted average diluted shares outstanding		328.7			341.1			330.2			341.6


P&C combined ratio
Loss and loss expense ratio		58.9	%		58.2	%		58.0	%		58.0	%
Policy acquisition cost ratio		15.7	%		16.6	%		16.5	%		17.1	%
Administrative expense ratio		13.1	%		12.7	%		13.5	%		13.1	%

P&C combined ratio		87.7	%		87.5	%		88.0	%		88.2	%

P&C underwriting income	$	478		$	478		$	880		$	868
Other income (expense) – operating	$	(56	)	$	(28	)	$	(88	)	$	(56	)


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		11

ACE LIMITED NEWS RELEASE

ACE Limited

Consolidated Supplemental Segment Information

(in millions of U.S. dollars)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30						June 30
	2015			2014			2015			2014

Gross Premiums Written

Insurance – North American P&C	$	2,905		$	2,347		$	5,030		$	4,371
Insurance – North American Agriculture		566			601			694			835
Insurance – Overseas General		2,212			2,224			4,467			4,485
Global Reinsurance		292			308			584			641
Life		529			526			1,051			1,048

Total	$	6,504		$	6,006		$	11,826		$	11,380


Net Premiums Written

Insurance – North American P&C	$	1,975		$	1,635		$	3,405		$	3,053
Insurance – North American Agriculture		379			388			467			582
Insurance – Overseas General		1,669			1,760			3,463			3,531
Global Reinsurance		261			278			534			586
Life		500			498			991			992

Total	$	4,784		$	4,559		$	8,860		$	8,744


Net Premiums Earned

Insurance – North American P&C	$	1,688		$	1,542		$	3,214		$	3,029
Insurance – North American Agriculture		321			330			385			433
Insurance – Overseas General		1,644			1,709			3,281			3,321
Global Reinsurance		220			261			446			545
Life		487			490			961			974

Total	$	4,360		$	4,332		$	8,287		$	8,302


Operating Income (loss)

Insurance – North American P&C	$	395		$	378		$	740		$	789
Insurance – North American Agriculture		15			19			50			(6	)
Insurance – Overseas General		240			282			481			521
Global Reinsurance		145			146			273			290
Life		67			72			133			149
Corporate		(74	)		(72	)		(144	)		(141	)

Total	$	788		$	825		$	1,533		$	1,602


		ACE^®, ACE logo^®, and ACE insured^® are trademarks of ACE Limited.		12

Exhibit 99.2

LOGO

Investor Contact

Helen M. Wilson

Phone: (441) 299-9283

email: investorrelations@acegroup.com

This report is for informational purposes only. It should be read in conjunction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this financial supplement reflect ACE’s 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 uncertainties which may cause actual results to differ materially from as indicated by such statements. For example, forward-looking statements related to financial performance including exposures, reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, currency exchange fluctuations, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable and credit developments among reinsurers.

Our forward-looking statements could also be affected by competition, pricing and policy term trends, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war. 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. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

LOGO

ACE Limited

Financial Supplement Table of Contents


		Page
I.	Financial Highlights
	- Consolidated Financial Highlights		1

II.	Consolidated Results
	- Consolidated Results—Consecutive Quarters		2
	- Summary Consolidated Balance Sheets		3
	- Consolidated Premiums and Operating Income by Line of Business		4

III.	Global P&C Results
	- Global P&C Results—Consecutive Quarters		5

IV.	Segment Results
	- Insurance—North American—For Reference Only		6
	- Insurance—North American P&C		7
	- Insurance—North American Agriculture		8
	- Insurance—Overseas General		9
	- Global Reinsurance		10
	- Life		11

V.	Balance Sheet Details
	- Loss Reserve Rollforward		12
	- Reinsurance Recoverable Analysis		13
	- Investment Portfolio		14 - 17
	- Net Realized and Unrealized Gains (Losses)		18
	- Capital Structure		19
	- Computation of Basic and Diluted Earnings Per Share		20
	- Book Value and Book Value per Common Share		21

VI.	Other Disclosures
	- Non-GAAP Financial Measures		22 - 24
	- Glossary		25

ACE Limited

Consolidated Financial Highlights

(in millions of U.S. dollars, except share, per share data, and ratios)

(Unaudited)

Note: All dollar amounts in the Financial Supplement are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.


												Constant $															Constant $
							% Change					% Change									% Change						% Change
	Three months ended June 30						2Q-15 vs.			Constant $		2Q-15 vs.			Six months ended June 30						YTD-15 vs.			Constant $			YTD-15 vs.
	2015			2014			2Q-14			2014 ⁽²⁾		2Q-14 ⁽²⁾			2015			2014			YTD-14			2014 ⁽²⁾			YTD-14 ⁽²⁾
Gross premiums written ⁽¹⁾	$	6,504		$	6,006			8.3	%	$	5,718		13.7	%	$	11,826		$	11,380			3.9	%	$	10,873			8.8	%
Net premiums written ⁽¹⁾	$	4,784		$	4,559			4.9	%	$	4,318		10.8	%	$	8,860		$	8,744			1.3	%	$	8,322			6.5	%
P&C net premiums written ^{(1) (3)}	$	4,284		$	4,061			5.5	%	$	3,839		11.6	%	$	7,869		$	7,752			1.5	%	$	7,363			6.9	%
Global P&C net premiums written ^{(1) (3)}	$	3,905		$	3,673			6.4	%	$	3,451		13.2	%	$	7,402		$	7,170			3.2	%	$	6,781			9.2	%
Net premiums earned	$	4,360		$	4,332			0.7	%	$	4,093		6.5	%	$	8,287		$	8,302			-0.2	%	$	7,897			4.9	%
Net investment income	$	562		$	556			1.0	%	$	545		3.1	%	$	1,113		$	1,109			0.3	%	$	1,091			2.0	%
Operating income ⁽¹⁾	$	788		$	825			-4.5	%	$	796		-0.9	%	$	1,533		$	1,602			-4.3	%	$	1,553			-1.3	%
Net income	$	942		$	779			20.8	%						$	1,623		$	1,513			7.2	%
Comprehensive income	$	397		$	1,348			-70.6	%						$	1,039		$	2,456			-57.7	%
Operating cash flow	$	816		$	846										$	1,891		$	2,096
P&C combined ratio ⁽³⁾
Loss and loss expense ratio		58.9	%		58.2	%										58.0	%		58.0	%
Underwriting and administrative expense ratio		28.8	%		29.3	%										30.0	%		30.2	%

Combined ratio		87.7	%		87.5	%										88.0	%		88.2	%
Operating return on equity (ROE)		11.4	%		11.8	%										11.0	%		11.5	%
ROE		12.7	%		10.4	%										11.0	%		10.2	%
Operating effective tax rate ⁽⁴⁾		14.7	%		13.7	%										14.2	%		12.7	%
Effective tax rate		13.2	%		14.6	%										13.9	%		13.0	%
Diluted earnings per share
Operating income	$	2.40		$	2.42			-0.8	%						$	4.64		$	4.69			-1.1	%
Net income	$	2.86		$	2.28			25.4	%						$	4.91		$	4.43			10.8	%

																											% Change
																								December 31			2Q-15 vs.
																								2014			4Q-14
Book value per common share															$	91.27								$	90.02			1.4	%
Book value per common share excluding foreign currency ⁽⁵⁾															$	92.31								$	90.02			2.5	%
Tangible book value per common share															$	72.84								$	72.61			0.3	%
Tangible book value per common share excluding foreign currency ⁽⁵⁾															$	73.45								$	72.61			1.2	%
Tangible book value per common share excluding acquisitions ⁽⁶⁾															$	74.30								$	72.61			2.3	%
Tangible book value per common share excluding acquisitions and foreign currency ^(5) (6)															$	74.91								$	72.61			3.2	%
Weighted average basic common shares outstanding		325.5			337.8											326.8			338.4
Weighted average diluted common shares outstanding		328.7			341.1											330.2			341.6
Debt plus trust preferred securities/ tangible capital																21.8	%		20.0	%					20.7	%

(1)	Included in Q2 2015 is gross premiums written of $428 million, net premiums written of $252 million, and operating income benefit of $15 million related to the transfer of the Fireman’s Fund in-force business at the time of the transaction that is non-recurring in 2016.

(2)	Prior periods on a constant dollar basis.

(3)	See non-GAAP financial measures.

(4)

Operating effective tax rate is dependent upon the mix of earnings from different jurisdictions with various tax rates. A change in the geographic mix of earnings would change the effective tax rate. The increase in the operating effective tax rate for the quarter was primarily due to a lower percentage of operating earnings being generated in lower tax paying jurisdictions.

(5)	For 2015, book value per common share and tangible book value per common share exclude the impact of foreign currency movement during the year.

(6)	For 2015, tangible book value per common share excludes the impact from goodwill and intangibles relating to the acquisition of the Fireman’s Fund high net worth personal lines insurance business in the United States of $474 million.


Financial Highlights		Page 1

ACE Limited

Consolidated Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

ACE Limited Consolidated


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Consolidated Results (Including Corporate) Excluding Life Segment ⁽¹⁾
Gross premiums written ⁽²⁾	$	5,975		$	4,800		$	5,193		$	5,736		$	5,480		$	10,775		$	10,332		$	21,261
Net premiums written⁽²⁾		4,284			3,585			3,803			4,232			4,061			7,869			7,752			15,787
Net premiums earned		3,873			3,453			3,871			4,265			3,842			7,326			7,328			15,464
Adjusted losses and loss expenses ⁽¹⁾		2,282			1,970			2,269			2,494			2,234			4,252			4,246			9,009
Policy acquisition costs		609			600			641			702			637			1,209			1,254			2,597
Administrative expenses		504			481			517			483			493			985			960			1,960

Underwriting income		478			402			444			586			478			880			868			1,898
Net investment income		496			485			508			497			490			981			979			1,984
Interest expense		69			67			66			66			69			136			137			269
Other income (expense) - operating ⁽³⁾		(56	)		(30	)		(25	)		(29	)		(26	)		(86	)		(49	)		(103	)
Income tax expense		128			111			110			169			120			239			208			487

Operating income (including Corporate) excluding Life segment ⁽²⁾		721			679			751			819			753			1,400			1,453			3,023
Life segment operating income		67			66			76			72			72			133			149			297

Consolidated operating income ⁽²⁾		788			745			827			891			825			1,533			1,602			3,320
Adjusted net realized gains (losses) ⁽¹⁾		128			(89	)		(210	)		(165	)		(81	)		39			(183	)		(558	)
Net realized gains (losses) related to unconsolidated entities		33			26			49			55			36			59			87			191
Income tax expense (benefit) on adjusted net realized gains (losses)		7			1			111			(4	)		1			8			(7	)		100

Consolidated net income	$	942		$	681		$	555		$	785		$	779		$	1,623		$	1,513		$	2,853

% Change versus prior year period ⁽¹⁾
Net premiums written as reported		5.5	%		-2.9	%		2.4	%		2.2	%		4.0	%		1.5	%		7.7	%		4.9	%
Net premiums earned as reported		0.8	%		-1.0	%		-0.3	%		2.9	%		7.1	%		0.0	%		9.6	%		5.1	%
Net premiums written constant $		11.6	%		1.7	%		5.0	%		1.7	%		4.5	%		6.9	%		8.7	%		5.9	%
Net premiums earned constant $		7.0	%		3.5	%		2.1	%		2.5	%		7.4	%		5.4	%		10.8	%		6.2	%
Other ratios
Net premiums written/gross premiums written ⁽¹⁾		72	%		75	%		73	%		74	%		74	%		73	%		75	%		74	%
Operating effective tax rate		14.7	%		13.7	%		12.7	%		16.9	%		13.7	%		14.2	%		12.7	%		13.9	%
P&C combined ratio ⁽¹⁾
Loss and loss expense ratio		58.9	%		57.1	%		58.6	%		58.5	%		58.2	%		58.0	%		58.0	%		58.3	%
Policy acquisition cost ratio		15.7	%		17.4	%		16.6	%		16.5	%		16.6	%		16.5	%		17.1	%		16.8	%
Administrative expense ratio		13.1	%		13.9	%		13.3	%		11.3	%		12.7	%		13.5	%		13.1	%		12.6	%

Combined ratio		87.7	%		88.4	%		88.5	%		86.3	%		87.5	%		88.0	%		88.2	%		87.7	%

Combined ratio excluding catastrophe losses and PPD		88.4	%		89.3	%		89.5	%		89.8	%		88.7	%		88.8	%		88.8	%		89.3	%
P&C expense ratio		28.8	%		31.3	%		29.9	%		27.8	%		29.3	%		30.0	%		30.2	%		29.4	%
P&C expense ratio excluding A&H		25.5	%		27.9	%		26.7	%		24.3	%		26.0	%		26.6	%		26.7	%		26.0	%
Catastrophe reinstatement premiums collected - pre-tax	$	—		$	—		$	2		$	1		$	—		$	—		$	—		$	3
Catastrophe losses - pre-tax	$	124		$	51		$	71		$	87		$	80		$	175		$	133		$	291
Favorable prior period development (PPD) - pre-tax	$	(153	)	$	(83	)	$	(107	)	$	(232	)	$	(126	)	$	(236	)	$	(188	)	$	(527	)
Loss and loss expense ratio excluding catastrophe losses and PPD		59.7	%		58.1	%		59.6	%		62.2	%		59.4	%		58.9	%		58.5	%		59.8	%

(1)	See non-GAAP financial measures.

(2)	Included in Q2 2015 is gross premiums written of $428 million, net premiums written of $252 million, and operating income benefit of $15 million related to the transfer of the Fireman’s Fund in-force business at the time of the transaction that is non-recurring in 2016.

(3)	Excludes portion of net realized investment gains and losses related to unconsolidated entities.


Consolidated Results		Page 2

ACE Limited

Summary Consolidated Balance Sheets

(in millions of U.S. dollars, except per share data)

(Unaudited)


	June 30			March 31			December 31
	2015			2015			2014
Assets
Fixed maturities available for sale, at fair value	$	48,701		$	50,410		$	49,395
Fixed maturities held to maturity, at amortized cost		8,676			6,982			7,331
Equity securities, at fair value		498			536			510
Short-term investments, at fair value		2,062			2,536			2,322
Other investments		3,328			3,430			3,346

Total investments		63,265			63,894			62,904
Cash		790			948			655
Securities lending collateral		1,080			1,033			1,330
Insurance and reinsurance balances receivable		5,757			5,026			5,426
Reinsurance recoverable on losses and loss expenses		11,775			11,588			11,992
Deferred policy acquisition costs		2,806			2,683			2,601
Value of business acquired		434			440			466
Prepaid reinsurance premiums		2,238			1,981			2,026
Goodwill and other intangible assets		5,969			5,516			5,724
Deferred tax assets		285			224			295
Investments in partially-owned insurance companies		638			590			504
Other assets		4,803			4,475			4,325

Total assets	$	99,840		$	98,398		$	98,248

Liabilities
Unpaid losses and loss expenses	$	38,230		$	37,326		$	38,315
Unearned premiums		8,879			8,182			8,222
Future policy benefits		4,835			4,744			4,754
Insurance and reinsurance balances payable		4,602			4,198			4,095
Securities lending payable		1,081			1,034			1,331
Accounts payable, accrued expenses, and other liabilities		6,090			6,194			5,726
Short-term debt		2,102			2,552			2,552
Long-term debt		4,157			4,157			3,357
Trust preferred securities		309			309			309

Total liabilities		70,285			68,696			68,661
Shareholders’ equity
Total shareholders’ equity, excl. AOCI		28,948			28,550			28,396
Accumulated other comprehensive income (AOCI)		607			1,152			1,191

Total shareholders’ equity		29,555			29,702			29,587

Total liabilities and shareholders’ equity	$	99,840		$	98,398		$	98,248

Book value per common share	$	91.27		$	90.81		$	90.02
% change over prior quarter		0.5	%		0.9	%		-0.4	%
Tangible book value per common share	$	72.84		$	73.94		$	72.61
% change over prior quarter		-1.5	%		1.8	%		-1.9	%


Consol Bal Sheet		Page 3

ACE Limited

Consolidated Premiums and Operating Income by Line of Business

(in millions of U.S. dollars)

(Unaudited)

ACE Limited Consolidated


												Constant $															Constant $
							% Change					% Change									% Change			Constant $			% Change
							2Q-15 vs.			Constant $		2Q-15 vs.			YTD			YTD			YTD-15 vs.			YTD-15 vs.			YTD-15 vs.
	2Q-15			2Q-14			2Q-14			2Q-14 ⁽²⁾		2Q-14 ⁽²⁾			2015			2014			YTD-14			YTD-14 ⁽²⁾			YTD-14 ⁽²⁾
Net premiums written
Property and all other	$	1,688		$	1,465			15.2	%						$	3,068		$	2,837			8.2	%
Casualty		1,563			1,494			4.7	%							3,042			2,949			3.1	%

Subtotal		3,251			2,959			9.9	%	$	2,817		15.4	%		6,110			5,786			5.6	%	$	5,532			10.4	%
Agriculture		379			388			-2.4	%		388		-2.4	%		467			582			-19.8	%		582			-19.8	%
Personal accident (A&H) ⁽¹⁾		909			961			-5.2	%		873		4.2	%		1,799			1,878			-4.2	%		1,731			3.9	%
Life		245			251			-2.7	%		240		2.4	%		484			498			-2.9	%		477			1.5	%

Total consolidated	$	4,784		$	4,559			4.9	%	$	4,318		10.8	%	$	8,860		$	8,744			1.3	%	$	8,322			6.5	%

% of Total Consolidated
Property and all other		35	%		32	%										35	%		32	%
Casualty		33	%		33	%										35	%		34	%

Subtotal		68	%		65	%										70	%		66	%
Agriculture		8	%		8	%										5	%		7	%
Personal accident (A&H) ⁽¹⁾		19	%		21	%										20	%		21	%
Life		5	%		6	%										5	%		6	%

Total consolidated		100	%		100	%										100	%		100	%

Net premiums earned
Property and all other	$	1,338		$	1,282			4.5	%						$	2,593		$	2,534			2.4	%
Casualty		1,588			1,542			3.0	%							3,094			3,022			2.4	%

Subtotal		2,926			2,824			3.7	%	$	2,681		9.2	%		5,687			5,556			2.4	%	$	5,315			7.0	%
Agriculture		321			330			-2.9	%		330		-2.9	%		385			433			-11.0	%		433			-11.0	%
Personal accident (A&H) ⁽¹⁾		882			934			-5.6	%		850		3.8	%		1,761			1,828			-3.7	%		1,685			4.5	%
Life		231			244			-5.1	%		232		-0.1	%		454			485			-6.3	%		464			-2.1	%

Total consolidated	$	4,360		$	4,332			0.7	%	$	4,093		6.5	%	$	8,287		$	8,302			-0.2	%	$	7,897			4.9	%

% of Total Consolidated
Property and all other		31	%		29	%										31	%		31	%
Casualty		37	%		36	%										38	%		36	%

Subtotal		68	%		65	%										69	%		67	%
Agriculture		7	%		7	%										5	%		5	%
Personal accident (A&H) ⁽¹⁾		20	%		22	%										21	%		22	%
Life		5	%		6	%										5	%		6	%

Total consolidated		100	%		100	%										100	%		100	%

Operating income (loss), after-tax
Property, casualty, and all other	$	616		$	648			-5.1	%	$	632		-2.5	%	$	1,177		$	1,293			-9.1	%	$	1,265			-7.0	%
Agriculture		15			19			-21.9	%		19		-21.9	%		50			(6	)		NM			(6	)		NM
Personal accident (A&H) ⁽¹⁾		122			124			-0.9	%		112		9.9	%		235			238			-1.3	%		218			8.0	%
Life		35			34			5.1	%		33		5.3	%		71			77			-7.0	%		76			-6.5	%

Total consolidated	$	788		$	825			-4.5	%	$	796		-0.9	%	$	1,533		$	1,602			-4.3	%	$	1,553			-1.3	%

% of Total Consolidated
Property, casualty, and all other		79	%		79	%										77	%		80	%
Agriculture		2	%		2	%										3	%		0	%
Personal accident (A&H) ⁽¹⁾		15	%		15	%										15	%		15	%
Life		4	%		4	%										5	%		5	%

Total consolidated		100	%		100	%										100	%		100	%

(1)	For purposes of this schedule only, A&H results from our Combined North American and International businesses, normally included in the Life and Insurance – Overseas General segments, respectively, are included in the personal accident (A&H) line items above.

(2)	Prior periods on a constant-dollar basis.


Line of Business		Page 4

ACE Limited

Global P&C Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global P&C includes the company’s Insurance – North American P&C segment (refer to page 7), Insurance – Overseas General segment (refer to page 9), Global Reinsurance segment (refer to page 10), and Corporate (not separately disclosed in the Financial Supplement). Global P&C excludes the Insurance – North American Agriculture segment.

Global P&C (Including Corporate)


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written ⁽¹⁾	$	5,409		$	4,672		$	4,891		$	4,495		$	4,879		$	10,081		$	9,497		$	18,883
Net premiums written⁽¹⁾		3,905			3,497			3,559			3,468			3,673			7,402			7,170			14,197
Net premiums earned		3,552			3,389			3,544			3,499			3,512			6,941			6,895			13,938
Losses and loss expenses		2,009			1,948			2,017			1,853			1,955			3,957			3,839			7,709
Policy acquisition costs		586			604			629			661			614			1,190			1,226			2,516
Administrative expenses		500			482			513			480			492			982			958			1,951

Underwriting income		457			355			385			505			451			812			872			1,762
Net investment income		490			479			501			491			484			969			966			1,958
Interest expense		69			67			66			66			69			136			137			269
Other income (expense)—operating ⁽²⁾		(48	)		(22	)		(16	)		(22	)		(17	)		(70	)		(32	)		(70	)
Income tax expense		124			101			98			146			115			225			210			454

Global P&C operating income ⁽¹⁾		706			644			706			762			734			1,350			1,459			2,927
Net realized gains (losses)		25			(30	)		(67	)		(76	)		(9	)		(5	)		(35	)		(178	)
Net realized gains (losses) related to unconsolidated entities		16			12			43			51			38			28			91			185
Income tax expense (benefit) on net realized gains (losses)		5			—			110			(5	)		1			5			(4	)		101

Global P&C net income	$	742		$	626		$	572		$	742		$	762		$	1,368		$	1,519		$	2,833

% Change versus prior year period
Net premiums written as reported		6.4	%		0.0	%		3.0	%		4.0	%		6.4	%		3.2	%		8.1	%		5.7	%
Net premiums earned as reported		1.2	%		0.1	%		2.6	%		6.2	%		8.5	%		0.7	%		9.8	%		7.0	%
Net premiums written constant $		13.2	%		5.0	%		5.8	%		3.4	%		7.0	%		9.2	%		9.2	%		6.9	%
Net premiums earned constant $		8.0	%		4.8	%		5.4	%		5.7	%		8.8	%		6.4	%		11.0	%		8.2	%
Other ratios
Net premiums written/gross premiums written		72	%		75	%		73	%		77	%		75	%		73	%		75	%		75	%
Combined ratio
Loss and loss expense ratio		56.5	%		57.5	%		56.9	%		52.9	%		55.7	%		57.0	%		55.7	%		55.3	%
Policy acquisition cost ratio		16.5	%		17.8	%		17.8	%		18.9	%		17.5	%		17.1	%		17.8	%		18.0	%
Administrative expense ratio		14.1	%		14.2	%		14.4	%		13.8	%		13.9	%		14.2	%		13.9	%		14.1	%

Combined ratio		87.1	%		89.5	%		89.1	%		85.6	%		87.1	%		88.3	%		87.4	%		87.4	%

Combined ratio excluding catastrophe losses and PPD		88.2	%		89.5	%		90.2	%		89.8	%		88.7	%		88.8	%		88.8	%		89.4	%
Expense ratio		30.6	%		32.0	%		32.2	%		32.7	%		31.4	%		31.3	%		31.7	%		32.1	%
Expense ratio excluding A&H		27.4	%		28.7	%		29.2	%		29.3	%		28.2	%		28.0	%		28.3	%		28.8	%
Catastrophe reinstatement premiums collected—pre-tax	$	—		$	—		$	2		$	1		$	—		$	—		$	—		$	3
Catastrophe losses—pre-tax	$	117		$	50		$	70		$	85		$	71		$	167		$	123		$	278
Favorable prior period development (PPD)—pre-tax	$	(153	)	$	(50	)	$	(106	)	$	(229	)	$	(126	)	$	(203	)	$	(226	)	$	(561	)
Loss and loss expense ratio excluding catastrophe losses and PPD		57.6	%		57.6	%		57.9	%		57.5	%		57.3	%		57.6	%		57.2	%		57.5	%

(1)	Included in Q2 2015 is gross premiums written of $428 million, net premiums written of $252 million, and operating income benefit of $15 million related to the transfer of the Fireman’s Fund in-force business at the time of the transaction that is non-recurring in 2016.

(2)	Excludes portion of net realized investment gains and losses related to unconsolidated entities.


Global P&C		Page 5

ACE Limited

Insurance - North American

(in millions of U.S. dollars, except ratios)

(Unaudited)

The table below combines the company’s Insurance – North American P&C segment (refer to page 7) and Insurance – North American Agriculture segment (refer to page 8) into total Insurance – North American business presentation for reference purposes only.

Insurance - North American


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written	$	3,471		$	2,253		$	2,841		$	3,367		$	2,948		$	5,724		$	5,206		$	11,414
Net premiums written		2,354			1,518			1,913			2,305			2,023			3,872			3,635			7,853
Net premiums earned		2,009			1,590			1,887			2,284			1,872			3,599			3,462			7,633
Losses and loss expenses ⁽¹⁾		1,393			1,057			1,329			1,694			1,295			2,450			2,363			5,386
Policy acquisition costs		153			157			166			210			175			310			339			715
Administrative expenses		193			170			181			168			176			363			338			687

Underwriting income		270			206			211			212			226			476			422			845
Net investment income		275			269			280			283			271			544			548			1,111
Interest expense		2			2			2			2			2			4			5			9
Other income (expense)—operating		(41	)		(5	)		(2	)		(8	)		(4	)		(46	)		(12	)		(22	)
Income tax expense		92			88			70			91			94			180			170			331

Operating income		410			380			417			394			397			790			783			1,594
Net realized gains (losses) ⁽¹⁾		—			(6	)		(39	)		(5	)		(11	)		(6	)		(20	)		(64	)
Net realized gains (losses) related to unconsolidated entities		10			4			19			32			19			14			39			90
Income tax expense on net realized gains (losses)		1			2			1			5			2			3			2			8

Net income	$	419		$	376		$	396		$	416		$	403		$	795		$	800		$	1,612

Combined ratio
Loss and loss expense ratio		69.3	%		66.5	%		70.4	%		74.1	%		69.2	%		68.1	%		68.3	%		70.6	%
Policy acquisition cost ratio		7.6	%		9.8	%		8.8	%		9.2	%		9.3	%		8.6	%		9.8	%		9.4	%
Administrative expense ratio		9.7	%		10.7	%		9.6	%		7.4	%		9.4	%		10.1	%		9.7	%		8.9	%

Combined ratio		86.6	%		87.0	%		88.8	%		90.7	%		87.9	%		86.8	%		87.8	%		88.9	%

Combined ratio excluding catastrophe losses and PPD		86.0	%		87.4	%		87.9	%		88.9	%		87.6	%		86.7	%		87.4	%		88.0	%
Catastrophe reinstatement premiums expensed—pre-tax	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe losses—pre-tax	$	61		$	46		$	30		$	37		$	45		$	107		$	78		$	145
Unfavorable (favorable) prior period development (PPD)—pre-tax	$	(49	)	$	(54	)	$	(12	)	$	8		$	(39	)	$	(103	)	$	(69	)	$	(73	)
Loss and loss expense ratio excluding catastrophe losses and PPD		68.8	%		67.1	%		69.6	%		72.5	%		68.9	%		68.0	%		67.7	%		69.6	%
% Change versus prior year period
Net premiums written		16.4	%		-5.9	%		3.0	%		-0.1	%		2.1	%		6.5	%		7.6	%		4.1	%
Net premiums earned		7.4	%		0.0	%		-2.6	%		-0.4	%		5.2	%		4.0	%		9.2	%		3.2	%
Other ratios
Net premiums written/gross premiums written		68	%		67	%		67	%		68	%		69	%		68	%		70	%		69	%

(1)	See non-GAAP financial measures.


Insurance - North American		Page 6

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Insurance - North American P&C


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written ⁽¹⁾	$	2,905		$	2,125		$	2,539		$	2,126		$	2,347		$	5,030		$	4,371		$	9,036
Net premiums written ⁽¹⁾		1,975			1,430			1,669			1,541			1,635			3,405			3,053			6,263
Net premiums earned		1,688			1,526			1,560			1,518			1,542			3,214			3,029			6,107
Losses and loss expenses		1,120			1,035			1,077			1,053			1,016			2,155			1,956			4,086
Policy acquisition costs		130			161			154			169			152			291			311			634
Administrative expenses		189			171			177			165			175			360			336			678

Underwriting income ⁽¹⁾		249			159			152			131			199			408			426			709
Net investment income		269			263			273			277			265			532			535			1,085
Interest expense		2			2			2			2			2			4			5			9
Other income (expense)—operating		(33	)		3			7			(1	)		5			(30	)		5			11
Income tax expense		88			78			58			68			89			166			172			298

Operating income ⁽¹⁾		395			345			372			337			378			740			789			1,498
Net realized gains (losses)		—			(6	)		(42	)		(5	)		(11	)		(6	)		(20	)		(67	)
Net realized gains (losses) related to unconsolidated entities		10			4			19			32			19			14			39			90
Income tax expense on net realized gains (losses)		1			2			1			5			2			3			2			8

Net income	$	404		$	341		$	348		$	359		$	384		$	745		$	806		$	1,513

Combined ratio
Loss and loss expense ratio		66.3	%		67.9	%		69.0	%		69.3	%		66.0	%		67.0	%		64.6	%		66.9	%
Policy acquisition cost ratio		7.7	%		10.5	%		9.9	%		11.1	%		9.8	%		9.1	%		10.3	%		10.4	%
Administrative expense ratio		11.2	%		11.2	%		11.3	%		11.0	%		11.3	%		11.2	%		11.0	%		11.1	%

Combined ratio		85.2	%		89.6	%		90.2	%		91.4	%		87.1	%		87.3	%		85.9	%		88.4	%

Combined ratio excluding catastrophe losses and PPD		85.0	%		87.9	%		89.1	%		88.5	%		87.3	%		86.4	%		87.2	%		88.0	%
Catastrophe reinstatement premiums expensed—pre-tax	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe losses—pre-tax	$	54		$	45		$	29		$	35		$	36		$	99		$	68		$	132
Unfavorable (favorable) prior period development (PPD)—pre-tax	$	(49	)	$	(21	)	$	(11	)	$	11		$	(39	)	$	(70	)	$	(107	)	$	(107	)
Loss and loss expense ratio excluding catastrophe losses and PPD		66.1	%		66.3	%		67.8	%		66.9	%		66.2	%		66.2	%		65.9	%		66.6	%
% Change versus prior year period
Net premiums written		20.8	%		0.8	%		4.2	%		2.7	%		6.9	%		11.5	%		8.5	%		5.9	%
Net premiums earned		9.6	%		2.5	%		3.3	%		5.1	%		7.9	%		6.2	%		9.5	%		6.8	%
Other ratios
Net premiums written/gross premiums written		68	%		67	%		66	%		72	%		70	%		68	%		70	%		69	%

(1)

Included in Q2 2015 is gross premiums written of $428 million, net premiums written of $252 million, underwriting income benefit of $49 million, and operating income benefit of $15 million related to the transfer of the Fireman’s Fund in-force business at the time of the transaction that is non-recurring in 2016. For Q2 2015, excluding the non-recurring benefit, underwriting income and operating income were $200 million and $380 million, respectively.


Insurance - North American P&C		Page 7

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Insurance - North American Agriculture


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written	$	566		$	128		$	302		$	1,241		$	601		$	694		$	835		$	2,378
Net premiums written		379			88			244			764			388			467			582			1,590
Net premiums earned		321			64			327			766			330			385			433			1,526
Losses and loss expenses ⁽¹⁾		273			22			252			641			279			295			407			1,300
Policy acquisition costs		23			(4	)		12			41			23			19			28			81
Administrative expenses		4			(1	)		4			3			1			3			2			9

Underwriting income (loss)		21			47			59			81			27			68			(4	)		136
Net investment income		6			6			7			6			6			12			13			26
Interest expense		—			—			—			—			—			—			—			—
Other income (expense)—operating		(8	)		(8	)		(9	)		(7	)		(9	)		(16	)		(17	)		(33	)
Income tax expense (benefit)		4			10			12			23			5			14			(2	)		33

Operating income (loss)		15			35			45			57			19			50			(6	)		96
Net realized gains (losses) ⁽¹⁾		—			—			3			—			—			—			—			3
Net realized gains (losses) related to unconsolidated entities		—			—			—			—			—			—			—			—
Income tax expense on net realized gains (losses)		—			—			—			—			—			—			—			—

Net income (loss)	$	15		$	35		$	48		$	57		$	19		$	50		$	(6	)	$	99

Combined ratio
Loss and loss expense ratio		85.3	%		33.3	%		77.2	%		83.7	%		84.4	%		76.6	%		93.9	%		85.2	%
Policy acquisition cost ratio		7.2	%		-6.0	%		3.6	%		5.4	%		7.0	%		5.0	%		6.4	%		5.3	%
Administrative expense ratio		1.1	%		-0.9	%		1.0	%		0.4	%		0.4	%		0.7	%		0.6	%		0.6	%

Combined ratio		93.6	%		26.4	%		81.8	%		89.5	%		91.8	%		82.3	%		100.9	%		91.1	%

Combined ratio excluding catastrophe losses and PPD		91.4	%		76.7	%		82.4	%		89.6	%		89.1	%		88.9	%		89.1	%		87.8	%
Catastrophe reinstatement premiums—pre-tax	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe losses—pre-tax	$	7		$	1		$	1		$	2		$	9		$	8		$	10		$	13
Unfavorable (favorable) prior period development (PPD)—pre-tax	$	—		$	(33	)	$	(1	)	$	(3	)	$	—		$	(33	)	$	38		$	34
Loss and loss expense ratio excluding catastrophe losses and PPD		83.1	%		83.2	%		77.9	%		83.8	%		81.8	%		83.1	%		81.2	%		81.8	%
% Change versus prior year period
Net premiums written		-2.4	%		-54.6	%		-5.0	%		-5.2	%		-14.2	%		-19.8	%		3.0	%		-2.3	%
Net premiums earned		-2.9	%		-37.2	%		-23.4	%		-9.8	%		-5.7	%		-11.0	%		7.6	%		-9.1	%
Other ratios
Net premiums written/gross premiums written		67	%		69	%		81	%		62	%		65	%		67	%		70	%		67	%

(1)	See non-GAAP financial measures for treatment of losses and loss expenses in the P&C combined ratio.


Insurance - North American Agriculture		Page 8

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Insurance - Overseas General


	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			Constant $ 2Q-14 ⁽¹⁾			YTD 2015			YTD 2014			Full Year 2014
Gross premiums written	$	2,212		$	2,255		$	2,212		$	2,156		$	2,224		$	1,973		$	4,467		$	4,485		$	8,853
Net premiums written		1,669			1,794			1,749			1,719			1,760			1,553			3,463			3,531			6,999
Net premiums earned		1,644			1,637			1,758			1,726			1,709			1,502			3,281			3,321			6,805
Losses and loss expenses		816			814			835			707			830			728			1,630			1,647			3,189
Policy acquisition costs		396			389			419			418			402			350			785			788			1,625
Administrative expenses		254			256			262			258			256			226			510			506			1,026

Underwriting income		178			178			242			343			221			198			356			380			965
Net investment income		139			138			147			130			136			127			277			268			545
Interest expense		1			1			2			2			1			1			2			2			6
Other income (expense)—operating		(11	)		(21	)		(15	)		(15	)		(17	)		(15	)		(32	)		(26	)		(56	)
Income tax expense		65			53			78			108			57			53			118			99			285

Operating income		240			241			294			348			282			256			481			521			1,163
Net realized gains (losses)		13			(10	)		(7	)		(75	)		14						3			4			(78	)
Net realized gains (losses) related to unconsolidated entities		3			4			12			9			9						7			24			45
Income tax expense (benefit) on net realized gains (losses)		4			(1	)		111			(11	)		(2	)					3			(7	)		93

Net income	$	252		$	236		$	188		$	293		$	307					$	488		$	556		$	1,037

Combined ratio
Loss and loss expense ratio		49.7	%		49.7	%		47.5	%		40.9	%		48.6	%					49.7	%		49.6	%		46.9	%
Policy acquisition cost ratio		24.1	%		23.8	%		23.8	%		24.3	%		23.5	%					23.9	%		23.7	%		23.9	%
Administrative expense ratio		15.4	%		15.6	%		15.0	%		14.9	%		15.0	%					15.5	%		15.3	%		15.0	%

Combined ratio		89.2	%		89.1	%		86.3	%		80.1	%		87.1	%					89.1	%		88.6	%		85.8	%

Combined ratio excluding catastrophe losses and PPD		89.8	%		90.3	%		89.4	%		90.5	%		89.3	%					90.1	%		89.9	%		89.9	%
Catastrophe reinstatement premiums—pre-tax	$	—		$	—		$	—		$	—		$	—					$	—		$	—		$	—
Catastrophe losses - pre-tax	$	58		$	5		$	30		$	39		$	26					$	63		$	43		$	112
Favorable prior period development (PPD)—pre-tax	$	(68	)	$	(24	)	$	(86	)	$	(219	)	$	(63	)				$	(92	)	$	(86	)	$	(391	)
Loss and loss expense ratio excluding catastrophe losses and PPD		50.3	%		50.9	%		50.7	%		51.3	%		50.8	%					50.6	%		50.9	%		51.0	%
% Change versus prior year period
Net premiums written as reported		-5.1	%		1.3	%		3.0	%		9.4	%		8.0	%					-1.9	%		8.7	%		7.4	%
Net premiums earned as reported		-3.9	%		1.6	%		3.4	%		7.2	%		9.4	%					-1.2	%		9.9	%		7.5	%
Net premiums written constant $		7.6	%		11.0	%		8.4	%		8.1	%		8.8	%					9.3	%		10.5	%		9.4	%
Net premiums earned constant $		9.4	%		11.2	%		8.8	%		6.0	%		9.8	%					10.3	%		12.1	%		9.6	%
Other ratios
Net premiums written/gross premiums written		75	%		80	%		79	%		80	%		79	%					78	%		79	%		79	%

(1)	Prior periods on a constant dollar basis.


Insurance - Overseas General		Page 9

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global Reinsurance


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written	$	292		$	292		$	140		$	213		$	308		$	584		$	641		$	994
Net premiums written		261			273			141			208			278			534			586			935
Net premiums earned		220			226			226			255			261			446			545			1,026
Losses and loss expenses		72			99			104			92			109			171			235			431
Policy acquisition costs		60			54			56			74			60			114			127			257
Administrative expenses		13			12			13			13			14			25			28			54

Underwriting income		75			61			53			76			78			136			155			284
Net investment income		79			75			78			81			80			154			157			316
Interest expense		1			1			—			1			2			2			3			4
Other income (expense)—operating		—			1			3			—			—			1			1			4
Income tax expense		8			8			7			11			10			16			20			38

Operating income		145			128			127			145			146			273			290			562
Net realized gains (losses)		5			(11	)		(12	)		6			(15	)		(6	)		(23	)		(29	)
Net realized gains (losses) related to unconsolidated entities		3			4			12			10			10			7			28			50
Income tax expense on net realized gains (losses)		(1	)		—			—			—			—			(1	)		—			—

Net income	$	154		$	121		$	127		$	161		$	141		$	275		$	295		$	583

Combined ratio
Loss and loss expense ratio		32.9	%		43.6	%		45.8	%		36.2	%		41.7	%		38.3	%		43.1	%		42.0	%
Policy acquisition cost ratio		27.2	%		24.0	%		25.0	%		28.8	%		23.1	%		25.6	%		23.3	%		25.0	%
Administrative expense ratio		5.6	%		5.6	%		5.7	%		5.2	%		5.1	%		5.6	%		5.1	%		5.3	%

Combined ratio		65.7	%		73.2	%		76.5	%		70.2	%		69.9	%		69.5	%		71.5	%		72.3	%

Combined ratio excluding catastrophe losses and PPD		79.6	%		75.5	%		76.2	%		75.7	%		75.4	%		77.5	%		75.2	%		75.6	%
Catastrophe reinstatement premiums collected—pre-tax	$	—		$	—		$	2		$	1		$	—		$	—		$	—		$	3
Catastrophe losses—pre-tax	$	5		$	—		$	11		$	11		$	9		$	5		$	12		$	34
Favorable prior period development (PPD)—pre-tax	$	(36	)	$	(5	)	$	(9	)	$	(21	)	$	(24	)	$	(41	)	$	(33	)	$	(63	)
Loss and loss expense ratio excluding catastrophe losses and PPD		46.7	%		46.0	%		45.4	%		42.8	%		47.2	%		46.3	%		46.8	%		45.5	%
% Change versus prior year period
Net premiums written as reported		-5.9	%		-11.4	%		-9.4	%		-21.2	%		-4.9	%		-8.8	%		2.5	%		-5.7	%
Net premiums earned as reported		-15.5	%		-20.6	%		-7.7	%		6.3	%		6.1	%		-18.1	%		10.8	%		5.1	%
Net premiums written constant $		-3.9	%		-9.1	%		-8.8	%		-21.8	%		-5.0	%		-6.6	%		2.5	%		-5.8	%
Net premiums earned constant $		-13.2	%		-19.0	%		-7.1	%		5.7	%		5.5	%		-16.3	%		10.4	%		4.9	%
Other ratios
Net premiums written/gross premiums written		90	%		93	%		100	%		98	%		90	%		92	%		91	%		94	%


Global Reinsurance		Page 10

ACE Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Life


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Gross premiums written	$	529		$	522		$	553		$	528		$	526		$	1,051		$	1,048		$	2,129
Net premiums written		500			491			523			497			498			991			992			2,012
Net premiums earned		487			474			499			489			490			961			974			1,962
Losses and loss expenses		137			152			147			145			146			289			297			589
Policy benefits ⁽¹⁾		153			142			134			125			144			295			258			517
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		(6	)		(11	)		3			6			(17	)		(17	)		(11	)		(2	)
Policy acquisition costs		118			107			123			123			121			225			232			478
Administrative expenses		74			73			73			71			73			147			141			285
Net investment income		66			66			69			69			66			132			130			268

Life underwriting income ⁽²⁾		77			77			88			88			89			154			187			363
Interest expense		2			1			1			4			3			3			6			11
Other income (expense) - operating ⁽¹⁾		—			(2	)		—			(1	)		(2	)		(2	)		(7	)		(8	)
Income tax expense		8			8			11			11			12			16			25			47

Operating income		67			66			76			72			72			133			149			297
Net realized gains (losses):
Mark-to-market on guaranteed living benefits derivative (net of related hedges)		102			(57	)		(153	)		(95	)		(70	)		45			(137	)		(385	)
Foreign exchange gains (losses) and all other		1			(2	)		7			6			(2	)		(1	)		(11	)		2
Net realized gains (losses) related to unconsolidated entities		17			14			6			4			(2	)		31			(4	)		6
Income tax expense (benefit) on net realized gains (losses)		2			1			1			1			—			3			(3	)		(1	)

Net income (loss)	$	185		$	20		$	(65	)	$	(14	)	$	(2	)	$	205		$	—		$	(79	)

% Change versus prior year period
Net premiums written as reported		0.3	%		-0.6	%		4.0	%		3.8	%		2.2	%		-0.1	%		0.2	%		2.0	%
Net premiums earned as reported		-0.8	%		-1.9	%		3.6	%		4.8	%		2.2	%		-1.4	%		1.8	%		3.0	%
Net premiums written constant $ ⁽³⁾		4.1	%		2.4	%		6.2	%		4.4	%		4.4	%		3.3	%		2.7	%		4.0	%
Net premiums earned constant $		3.0	%		0.9	%		5.9	%		5.4	%		4.2	%		1.9	%		4.1	%		4.9	%

(1)

(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP are reclassified from Other income (expense) for purposes of presenting Life underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits.

(2)	We assess the performance of our Life business based on Life underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets.

(3)	International life insurance net premiums written and deposits breakdown (excludes Combined North American and Life reinsurance businesses):


					Constant $							Constant $
					% Change							% Change
			Constant $		2Q-15 vs.					Constant $		YTD-15 vs.
	2Q-15		2Q-14		2Q-14			YTD-15		YTD-14		YTD-14
International life insurance net premiums written	$	186	$	173		7.6	%	$	365	$	344		6.0	%
International life insurance deposits ⁽⁴⁾		263		275		-4.3	%		516		470		9.8	%

Total international life insurance net premiums written and deposits	$	449	$	448		0.3	%	$	881	$	814		8.2	%

(4)	Includes deposits collected on universal life and investment contracts. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues.


Life		Page 11

ACE Limited

Loss Reserve Rollforward

(in millions of U.S. dollars, except ratios)

(Unaudited)


	Unpaid Losses									Net Paid to
	Gross			Ceded			Net			Incurred Ratio
Balance at December 31, 2013	$	37,443		$	10,612		$	26,831
Losses and loss expenses incurred		2,462			301			2,161
Losses and loss expenses paid		(3,059	)		(762	)		(2,297	)		106	%
Other (incl. foreign exch. revaluation)		20			16			4

Balance at March 31, 2014	$	36,866		$	10,167		$	26,699
Losses and loss expenses incurred		3,004			616			2,388
Losses and loss expenses paid		(2,878	)		(729	)		(2,149	)		90	%
Other (incl. foreign exch. revaluation)		185			56			129

Balance at June 30, 2014	$	37,177		$	10,110		$	27,067
Losses and loss expenses incurred		3,840			1,156			2,684
Losses and loss expenses paid		(3,165	)		(810	)		(2,355	)		88	%
Other (incl. foreign exch. revaluation)		(405	)		(120	)		(285	)

Balance at September 30, 2014	$	37,447		$	10,336		$	27,111
Losses and loss expenses incurred		3,442			1,026			2,416
Losses and loss expenses paid		(3,307	)		(873	)		(2,434	)		101	%
Other (incl. foreign exch. revaluation)		733			818			(85	)

Balance at December 31, 2014	$	38,315		$	11,307		$	27,008
Losses and loss expenses incurred		2,743			621			2,122
Losses and loss expenses paid		(3,062	)		(744	)		(2,318	)		109	%
Other (incl. foreign exch. revaluation)		(670	)		(197	)		(473	)

Balance at March 31, 2015	$	37,326		$	10,987		$	26,339
Losses and loss expenses incurred		3,065			648			2,417
Losses and loss expenses paid		(2,830	)		(547	)		(2,283	)		94	%
Other (incl. foreign exch. revaluation)		669			60			609

Balance at June 30, 2015	$	38,230		$	11,148		$	27,082

Add net recoverable on paid losses		—			627			(627	)

Balance including net recoverable on paid losses	$	38,230		$	11,775		$	26,455


Loss Reserve Rollforward		Page 12

ACE Limited

Reinsurance Recoverable Analysis

(in millions of U.S. dollars)

(Unaudited)

Net Reinsurance Recoverable by Division


	June 30			March 31			December 31
	2015			2015			2014
Reinsurance recoverable on paid losses and loss expenses
Active operations	$	448		$	413		$	478
Brandywine and Other Run-off		283			292			313

Total	$	731		$	705		$	791

Reinsurance recoverable on unpaid losses and loss expenses
Active operations	$	10,262		$	10,052		$	10,348
Brandywine and Other Run-off		1,136			1,184			1,210

Total	$	11,398		$	11,236		$	11,558

Gross reinsurance recoverable
Active operations	$	10,710		$	10,465		$	10,826
Brandywine and Other Run-off		1,419			1,476			1,523

Total	$	12,129		$	11,941		$	12,349

Provision for uncollectible reinsurance ⁽¹⁾
Active operations	$	(214	)	$	(213	)	$	(217	)
Brandywine and Other Run-off		(140	)		(140	)		(140	)

Total	$	(354	)	$	(353	)	$	(357	)

Net reinsurance recoverable
Active operations	$	10,496		$	10,252		$	10,609
Brandywine and Other Run-off		1,279			1,336			1,383

Total	$	11,775		$	11,588		$	11,992

(1)	The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $2.5 billion.


Reinsurance Recoverable		Page 13

ACE Limited

Investment Portfolio

(in millions of U.S. dollars)

(Unaudited)


	June 30					March 31					December 31
	2015					2015					2014
Market Value
Fixed maturities available for sale	$	48,701				$	50,410				$	49,395
Fixed maturities held to maturity		8,805					7,307					7,589
Short-term investments		2,062					2,536					2,322

Total fixed maturities	$	59,568				$	60,253				$	59,306

Asset Allocation by Market Value
Treasury	$	2,424		4	%	$	2,448		4	%	$	2,448		4	%
Agency		1,139		2	%		1,221		2	%		1,222		2	%
Corporate and asset-backed		20,007		34	%		20,370		34	%		19,854		34	%
Mortgage-backed		12,661		21	%		12,791		21	%		12,325		21	%
Municipal		5,276		9	%		5,067		9	%		4,930		8	%
Non-U.S.		15,999		27	%		15,820		26	%		16,205		27	%
Short-term investments		2,062		3	%		2,536		4	%		2,322		4	%

Total fixed maturities	$	59,568		100	%	$	60,253		100	%	$	59,306		100	%

Credit Quality by Market Value
AAA	$	9,320		16	%	$	9,386		16	%	$	8,943		15	%
AA		21,294		36	%		21,760		36	%		21,589		36	%
A		11,568		19	%		11,712		19	%		11,625		20	%
BBB		8,806		15	%		8,789		15	%		8,690		15	%
BB		4,531		8	%		4,377		7	%		4,372		7	%
B		3,860		6	%		4,054		7	%		3,916		7	%
Other		189		0	%		175		0	%		171		0	%

Total fixed maturities	$	59,568		100	%	$	60,253		100	%	$	59,306		100	%

Cost/Amortized Cost
Fixed maturities available for sale	$	47,599				$	48,384				$	47,826
Fixed maturities held to maturity		8,676					6,982					7,331
Short-term investments		2,062					2,536					2,322

Subtotal fixed maturities		58,337					57,902					57,479
Equity securities		433					447					440
Other investments		2,989					3,096					2,999

Total investment portfolio	$	61,759				$	61,445				$	60,918

Avg. duration of fixed maturities		4.1 years					3.9 years					4.0 years
Avg. market yield of fixed maturities		2.9	%				2.6	%				2.8	%
Avg. credit quality		A/Aa					A/Aa					A/Aa
Avg. yield on invested assets		3.6	%				3.6	%				3.8	%


Investments		Page 14

ACE Limited

Investment Portfolio - 2

(in millions of U.S. dollars)

(Unaudited)

Mortgage-backed Fixed Income Portfolio

Mortgage-backed securities


	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Market Value at June 30, 2015
Agency residential mortgage-backed (RMBS)	$	—	$	10,094	$	—	$	—	$	—	$	10,094
Non-agency RMBS		29		5		15		10		13		72
Commercial mortgage-backed		2,468		13		11		3		—		2,495

Total mortgage-backed securities at market value	$	2,497	$	10,112	$	26	$	13	$	13	$	12,661

U.S. Corporate and Asset-backed Fixed Income Portfolios

Market Value at June 30, 2015


	S&P Credit Rating
	Investment Grade
	AAA		AA		A		BBB		Total
Asset-backed	$	657	$	62	$	—	$	—	$	719
Banks		—		17		2,161		280		2,458
Basic Materials		—		3		92		343		438
Communications		—		57		205		972		1,234
Consumer, Cyclical		—		98		416		497		1,011
Consumer, Non-Cyclical		54		449		1,206		804		2,513
Diversified Financial Services		—		43		304		104		451
Energy		25		34		149		788		996
Industrial		—		358		423		365		1,146
Utilities		—		9		626		398		1,033
All Others		81		247		500		556		1,384

Total	$	817	$	1,377	$	6,082	$	5,107	$	13,383

Market Value at June 30, 2015


	S&P Credit Rating
	Below Investment Grade
	BB		B		CCC		Total
Asset-backed	$	—	$	3	$	11	$	14
Banks		1		6		—		7
Basic Materials		154		101		4		259
Communications		599		532		5		1,136
Consumer, Cyclical		551		546		25		1,122
Consumer, Non-Cyclical		567		837		33		1,437
Diversified Financial Services		142		55		3		200
Energy		463		206		15		684
Industrial		381		359		12		752
Utilities		219		68		—		287
All Others		331		382		13		726

Total	$	3,408	$	3,095	$	121	$	6,624


Investments 2		Page 15

ACE Limited

Investment Portfolio - 3

(in millions of U.S. dollars)

(Unaudited)

Non-U.S. Fixed Income Portfolio

June 30, 2015

Non-U.S. Government Securities


	Market Value by S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
United Kingdom	$	1,082	$	—	$	—	$	—	$	—	$	1,082
Republic of Korea		—		867		48		—		—		915
Federative Republic of Brazil		—		—		—		701		—		701
United Mexican States		—		—		429		125		—		554
Canada		481		—		—		—		—		481
Kingdom of Thailand		—		—		375		—		—		375
Province of Ontario		—		360		—		—		—		360
Province of Quebec		—		—		255		—		—		255
Japan		—		195		—		—		—		195
Australia		187		—		—		—		—		187
Other Non-U.S. Government Securities		534		886		325		362		555		2,662

Total	$	2,284	$	2,308	$	1,432	$	1,188	$	555	$	7,767

Non-U.S. Corporate Securities


	Market Value by S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
United Kingdom	$	118	$	45	$	617	$	547	$	196	$	1,523
Canada		116		122		234		337		208		1,017
United States ⁽¹⁾		1		90		106		235		196		628
Australia		79		91		258		92		28		548
France		35		61		211		177		37		521
Netherlands		25		128		180		128		55		516
Germany		91		19		113		135		25		383
Switzerland		48		16		96		109		40		309
China		—		151		78		32		9		270
Hong Kong		9		6		163		9		7		194
Other Non-U.S. Corporate Securities		270		274		704		584		491		2,323

Total	$	792	$	1,003	$	2,760	$	2,385	$	1,292	$	8,232

(1)	Countries represent the ultimate parent company’s country of risk. Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations.


Investments 3		Page 16

ACE Limited

Investment Portfolio - 4

(in millions of U.S. dollars)

(Unaudited)

Fixed Maturity Investment Portfolio

Top 10 Global Corporate Exposures


	June 30, 2015	Market Value		Rating
1	JP Morgan Chase & Co	$	472	A
2	General Electric Co		443	AA+
3	Goldman Sachs Group Inc		328	A-
4	Wells Fargo & Co		267	A+
5	Bank of America Corp		241	A-
6	HSBC Holdings Plc		236	A
7	Verizon Communications Inc		228	BBB+
8	Morgan Stanley		227	A-
9	AT&T INC		209	BBB+
10	Ford Motor Co		206	BBB-


Investments 4		Page 17

ACE Limited

Net Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

(Unaudited)


	Three months ended June 30, 2015									Six months ended June 30, 2015
	Net Realized			Net Unrealized						Net Realized			Net Unrealized
	Gains			Gains			Net			Gains			Gains			Net
	(Losses)⁽¹⁾			(Losses)			Impact			(Losses) ⁽¹⁾			(Losses)			Impact
Fixed maturities	$	5		$	(832	)	$	(827	)	$	1		$	(393	)	$	(392	)
Fixed income derivatives		27			—			27			28			—			28
Public equity		29			(23	)		6			30			(6	)		24
Private equity		27			5			32			40			(7	)		33

Total investment portfolio		88			(850	)		(762	)		99			(406	)		(307	)
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽²⁾		102			—			102			45			—			45
Foreign exchange ⁽³⁾		(40	)		136			96			(71	)		(285	)		(356	)
Partially-owned entities ⁽⁴⁾		18			—			18			31			—			31
Other		(7	)		(6	)		(13	)		(6	)		7			1

Net gains (losses) before tax		161			(720	)		(559	)		98			(684	)		(586	)
Income tax expense (benefit)		7			(175	)		(168	)		8			(100	)		(92	)

Net gains (losses)	$	154		$	(545	)	$	(391	)	$	90		$	(584	)	$	(494	)

(1)	Other-than-temporary impairments for the quarter includes $7 million for fixed maturities and $1 million for public equity. Year to date other-than-temporary impairments includes $20 million for fixed maturities and $1 million for public equities.

(2)	The quarter and year to date include $2 million and $14 million, respectively, of losses on applicable hedges.

(3)	Unrealized foreign exchange gain, after-tax, for the quarter was $132 million. Unrealized foreign exchange loss, after-tax, year to date was $278 million.

(4)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).


	Three months ended June 30, 2014									Six months ended June 30, 2014
	Net Realized			Net Unrealized						Net Realized			Net Unrealized
	Gains			Gains			Net			Gains			Gains			Net
	(Losses)⁽⁵⁾			(Losses)			Impact			(Losses) ⁽⁵⁾			(Losses)			Impact
Fixed maturities	$	20		$	538		$	558		$	31		$	999		$	1,030
Fixed income derivatives		(15	)		—			(15	)		(40	)		—			(40	)
Public equity		1			24			25			(4	)		34			30
Private equity		36			6			42			92			48			140

Total investment portfolio		42			568			610			79			1,081			1,160
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽⁶⁾		(70	)		—			(70	)		(137	)		—			(137	)
Foreign exchange ⁽⁷⁾		(14	)		153			139			(23	)		120			97
Partially-owned entities ⁽⁸⁾		(3	)		—			(3	)		(8	)		—			(8	)
Other		—			(5	)		(5	)		(7	)		(13	)		(20	)

Net gains (losses) before tax		(45	)		716			671			(96	)		1,188			1,092
Income tax expense (benefit)		1			147			148			(7	)		245			238

Net gains (losses)	$	(46	)	$	569		$	523		$	(89	)	$	943		$	854

(5)

Other-than-temporary impairments for the quarter includes $8 million for fixed maturities, $3 million for private equity and $1 million for public equity. Year to date other-than-temporary impairments includes $13 million for fixed maturities, $3 million for private equity, and $7 million for public equity.

(6)	The quarter and year to date include $72 million and $91 million, respectively, of losses on applicable hedges.

(7)	Unrealized foreign exchange gains, after-tax, for the quarter and year to date were $119 million and $78 million, respectively.

(8)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).


Net Gains (Losses)		Page 18

ACE Limited

Capital Structure

(in millions of U.S. dollars, except ratios)

(Unaudited)


	June 30 2015			March 31 2015			December 31 2014			December 31 2013
Total short-term debt ^{(1) (2)}	$	2,102		$	2,552		$	2,552		$	1,901
Total long-term debt		4,157			4,157			3,357			3,807

Total debt	$	6,259		$	6,709		$	5,909		$	5,708

Total trust preferred securities	$	309		$	309		$	309		$	309

Total shareholders’ equity	$	29,555		$	29,702		$	29,587		$	28,825

Total capitalization	$	36,123		$	36,720		$	35,805		$	34,842
Tangible capital ⁽³⁾	$	30,154		$	31,204		$	30,081		$	29,438
Leverage ratios
Debt/ total capitalization		17.3	%		18.3	%		16.5	%		16.4	%
Debt plus trust preferred securities/ total capitalization		18.2	%		19.1	%		17.4	%		17.3	%
Debt/ tangible capital		20.8	%		21.5	%		19.6	%		19.4	%
Debt plus trust preferred securities/ tangible capital		21.8	%		22.5	%		20.7	%		20.4	%

Note: As of June 30, 2015, there was $0.5 billion usage of credit facilities on a total commitment of $1.0 billion.

(1)	In May 2015, $450 million of 5.6 percent senior notes matured and were fully paid.

(2)	Repurchase agreements in the amount of $850 million matured during the quarter, and there were new repurchase agreements in the amount of $850 million.

(3)	Tangible capital is equal to total capitalization less goodwill and other intangible assets.


Capital Structure		Page 19

ACE Limited

Computation of Basic and Diluted Earnings Per Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)


	Three months ended June 30						Six months ended June 30
	2015			2014			2015			2014
Numerator
Operating income to common shares	$	788		$	825		$	1,533		$	1,602
Adjusted net realized gains (losses), net of income tax		154			(46	)		90			(89	)

Net income	$	942		$	779		$	1,623		$	1,513

Rollforward of Common Shares Outstanding
Shares - beginning of period		327,084,762			337,974,644			328,659,686			339,793,935
Repurchase of shares ⁽¹⁾		(3,650,200	)		(2,306,000	)		(6,677,663	)		(5,793,882	)
Shares issued, excluding option exercises		107,071			135,079			1,118,101			1,311,675
Issued for option exercises		272,648			421,866			714,157			913,861

Shares - end of period		323,814,281			336,225,589			323,814,281			336,225,589

Denominator
Weighted average shares outstanding		325,463,196			337,846,228			326,795,838			338,353,260
Effect of other dilutive securities		3,222,562			3,286,359			3,373,809			3,267,499

Adj. wtd. avg. shares outstanding and assumed conversions		328,685,758			341,132,587			330,169,647			341,620,759

Basic earnings per share
Operating income	$	2.42		$	2.44		$	4.69		$	4.73
Adjusted net realized gains (losses), net of income tax		0.47			(0.14	)		0.28			(0.26	)

Net income	$	2.89		$	2.30		$	4.97		$	4.47

Diluted earnings per share
Operating income	$	2.40		$	2.42		$	4.64		$	4.69
Adjusted net realized gains (losses), net of income tax		0.46			(0.14	)		0.27			(0.26	)

Net income	$	2.86		$	2.28		$	4.91		$	4.43


Earnings per share		Page 20

ACE Limited

Book Value and Book Value per Common Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)

Reconciliation of Book Value per Common Share


	June 30			March 31			December 31			June 30
	2015			2015			2014			2014
Shareholders’ equity	$	29,555		$	29,702		$	29,587		$	30,325
Less: goodwill and other intangible assets		5,969			5,516			5,724			5,522

Numerator for tangible book value per share	$	23,586		$	24,186		$	23,863		$	24,803

Book value - % change over prior quarter		-0.5	%		0.4	%		-1.4	%		3.3	%
Tangible book value - % change over prior quarter		-2.5	%		1.4	%		-3.0	%		3.4	%
Denominator		323,814,281			327,084,762			328,659,686			336,225,589

Book value per common share	$	91.27		$	90.81		$	90.02		$	90.19
Tangible book value per common share	$	72.84		$	73.94		$	72.61		$	73.77
Reconciliation of Book Value
Shareholders’ equity, beginning of quarter	$	29,702		$	29,587		$	30,017		$	29,369
Operating income		788			745			827			825
Adjusted net realized gains (losses), net of tax		154			(64	)		(272	)		(46	)
Net unrealized gains (losses), net of tax		(672	)		361			94			453
Repurchase of shares		(394	)		(340	)		(430	)		(237	)
Dividend declared on common shares		(217	)		(222	)		(223	)		(223	)
Cumulative translation, net of tax		132			(410	)		(520	)		119
Pension liability		(5	)		10			9			(3	)
Other⁽¹⁾		67			35			85			68

	$	29,555		$	29,702		$	29,587		$	30,325

(1)	Other primarily includes proceeds from exercise of stock options and stock compensation.


Reconciliation Book Value		Page 21

ACE Limited

Non-GAAP Financial Measures

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures

We provide financial measures such as gross premiums written, net premiums written, net premiums earned, and operating income on a constant-dollar basis. We believe it is useful to evaluate the trends in these measures exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted, as these exchange rates could fluctuate significantly between periods and distort the analysis of trends. The impact is determined by assuming constant foreign exchange rates between periods by translating prior period results using the same local currency exchange rates as the comparable current period.

Adjusted net realized gains (losses) is a non-GAAP financial measure that excludes realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations and therefore realized gains and losses from these derivatives are reclassified to Adjusted losses and loss expenses (a non-GAAP financial measure). Adjusted losses and loss expenses include gains and losses on crop derivatives. P&C loss and loss expense ratio and P&C combined ratio (both non-GAAP financial measures) include adjusted losses and loss expenses in the ratio numerator. A reconciliation of GAAP combined ratio to P&C combined ratio is provided on page 24.

In presenting our segment operating results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs, and administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and net realized gains (losses). P&C underwriting income is a non-GAAP financial measure which includes Adjusted losses and loss expenses. Insurance – North American Agriculture underwriting income includes gains (losses) on crop derivatives. Life underwriting income includes net investment income and gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.

Operating income or income excluding adjusted net realized gains (losses), net of tax, is a common performance measurement for insurance companies and non-GAAP financial measure. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude adjusted net realized gains (losses) and net realized gains (losses) included in other income (expense) related to partially owned entities because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. Operating income or income excluding adjusted net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with GAAP.

Other income (expense) – operating is a non-GAAP financial measure and excludes the portion of net realized gains and losses related to unconsolidated entities from other income (expense). These gains and losses are reported as Net realized gains (losses) and represent the non-operating activities of entities where we hold more than an insignificant percentage of the investee’s shares. We exclude these gains and losses from other income (expense) to enhance the understanding of our core results of operations as they are heavily influenced by, and fluctuate in part according to market conditions. A reconciliation of Consolidated Other income (expense) on a GAAP basis to Consolidated Other income (expense)—operating is provided on page 24.

P&C combined ratio excluding catastrophe losses and prior period development (PPD) is a non-GAAP financial measure. The ratio numerator includes adjusted losses and loss expenses, policy acquisition costs, and administrative expenses adjusted to exclude catastrophe losses and PPD. The ratio denominator includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected and net earned premium adjustments on loss sensitive policies. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.

P&C loss and loss expense ratio excluding the impact of catastrophe losses and PPD is a non-GAAP financial measure. The loss ratio numerator includes adjusted losses and loss expenses adjusted to exclude catastrophe losses and PPD. The loss ratio denominator includes Net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating this ratio. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our core underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.

P&C expense ratio excluding accident and health (A&H) is a non-GAAP financial measure and excludes the impact of our A&H business from our consolidated expense ratio. The expense ratio for the A&H business is typically higher than our traditional P&C business, and we believe that this measure provides better comparison to our peer companies that may not have a significant A&H block of business.

Global P&C performance metrics are non-GAAP financial measures and comprise consolidated operating results (including corporate) and exclude the operating results of the company’s Life and Insurance – North American Agriculture segments. We believe that these measures are useful and meaningful to investors as they are used by management to assess the company’s global P&C operations which are the most economically similar. We exclude the Insurance – North American Agriculture and Life segments because the results of these businesses do not always correlate with the results of our global P&C operations.

International life insurance net premiums written and deposits collected, is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our life insurance business because new life deposits are an important component of production and key to our efforts to grow our business.

Operating return on equity (ROE) or ROE calculated using operating income is an annualized non-GAAP financial measure and is calculated as operating income divided by average shareholders’ equity, as adjusted, for the period. To annualize a quarterly rate, multiply by four. Operating ROE is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.

Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on adjusted net realized gains (losses). The denominator excludes adjusted net realized gains (losses), before tax. We exclude adjusted net realized gains (losses) and the related tax impact because these amounts are heavily influenced by, and fluctuate in part according to, the availability of market opportunities. Operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.

Tangible book value per common share is a non-GAAP financial measure and is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding. We believe that goodwill and other intangible assets are not indicative of our underlying insurance results or trends and make book value comparisons to less acquisitive peer companies less meaningful. A reconciliation of tangible book value per share is provided on page 21. Tangible book value per common share excluding 2014 acquisitions is shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding. The numerator adds back the goodwill and other intangible assets related to the acquisition of the Fireman’s Fund high net worth personal lines insurance business in the United States in order to adjust for the distortive effect of acquisitions. In addition, we disclose per share measures that exclude the impact of foreign currency fluctuations during 2015 in order to adjust for the distortive effects of fluctuations in exchange rates.


Reconciliation Non-GAAP		Page 22

ACE Limited

Non-GAAP Financial Measures - 2

(in millions of U.S. dollars, except ratios)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

Operating income

Operating income is a common performance measure for insurance companies and is presented throughout this report.

The following table presents the reconciliation of Net income to Operating income:


															YTD		YTD			Full Year
	2Q-15		1Q-15			4Q-14			3Q-14			2Q-14			2015		2014			2014
Net income, as reported	$	942	$	681		$	555		$	785		$	779		$	1,623	$	1,513		$	2,853
Adjusted net realized gains (losses)		128		(89	)		(210	)		(165	)		(81	)		39		(183	)		(558	)
Net realized gains (losses) related to unconsolidated entities ⁽¹⁾		33		26			49			55			36			59		87			191
Income tax expense (benefit) on adjusted net realized gains (losses)		7		1			111			(4	)		1			8		(7	)		100

Operating income	$	788	$	745		$	827		$	891		$	825		$	1,533	$	1,602		$	3,320

(1)	Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).

The following table presents the Operating income (loss) of each segment and Corporate:


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Insurance – North American P&C	$	395		$	345		$	372		$	337		$	378		$	740		$	789		$	1,498
Insurance – Overseas General		240			241			294			348			282			481			521			1,163
Global Reinsurance		145			128			127			145			146			273			290			562
Corporate		(74	)		(70	)		(87	)		(68	)		(72	)		(144	)		(141	)		(296	)

Global P&C (including Corporate)		706			644			706			762			734			1,350			1,459			2,927
Insurance – North American Agriculture		15			35			45			57			19			50			(6	)		96

Consolidated Results (including Corporate) Excluding Life Segment		721			679			751			819			753			1,400			1,453			3,023
Life		67			66			76			72			72			133			149			297

Consolidated operating income	$	788		$	745		$	827		$	891		$	825		$	1,533		$	1,602		$	3,320

Operating ROE

The following table presents the reconciliation of ROE to Operating ROE:


							YTD			YTD			Full Year
	2Q-15			2Q-14			2015			2014			2014
Net income	$	942		$	779		$	1,623		$	1,513		$	2,853
Operating income	$	788		$	825		$	1,533		$	1,602		$	3,320
Equity - beginning of period, as reported	$	29,702		$	29,369		$	29,587		$	28,825		$	28,825
Less: unrealized gains (losses) on investments, net of deferred tax		2,212			1,594			1,851			1,174			1,174

Equity - beginning of period, as adjusted	$	27,490		$	27,775		$	27,736		$	27,651		$	27,651

Equity - end of period, as reported	$	29,555		$	30,325		$	29,555		$	30,325		$	29,587
Less: unrealized gains (losses) on investments, net of deferred tax		1,540			2,047			1,540			2,047			1,851

Equity - end of period, as adjusted	$	28,015		$	28,278		$	28,015		$	28,278		$	27,736

Average equity, as reported	$	29,629		$	29,847		$	29,571		$	29,575		$	29,206
Average equity, as adjusted	$	27,753		$	28,027		$	27,876		$	27,965		$	27,694
Operating ROE		11.4	%		11.8	%		11.0	%		11.5	%		12.0	%
ROE		12.7	%		10.4	%		11.0	%		10.2	%		9.8	%


Reconciliation Non-GAAP 2		Page 23

ACE Limited

Non-GAAP Financial Measures - 3

(in millions of U.S. dollars, except ratios)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

Operating effective tax rate

The following table presents the reconciliation of effective tax rate to the operating effective tax rate:


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Tax expense, as reported	$	143		$	120		$	232		$	176		$	133		$	263		$	226		$	634
Tax expense (benefit) on adjusted net realized gains (losses)		7			1			111			(4	)		1			8			(7	)		100

Tax expense, adjusted	$	136		$	119		$	121		$	180		$	132		$	255		$	233		$	534

Income before tax, as reported	$	1,085		$	801		$	787		$	961		$	912		$	1,886		$	1,739		$	3,487
Less: adjusted realized gains (losses)		128			(89	)		(210	)		(165	)		(81	)		39			(183	)		(558	)
Less: realized gains (losses) related to unconsolidated entities		33			26			49			55			36			59			87			191

Operating income before tax	$	924		$	864		$	948		$	1,071		$	957		$	1,788		$	1,835		$	3,854

Effective tax rate		13.2	%		15.0	%		29.5	%		18.3	%		14.6	%		13.9	%		13.0	%		18.2	%
Adjustment for tax impact of adjusted net realized gains (losses)		1.5	%		-1.3	%		-16.8	%		-1.4	%		-0.9	%		0.3	%		-0.3	%		-4.3	%

Operating effective tax rate		14.7	%		13.7	%		12.7	%		16.9	%		13.7	%		14.2	%		12.7	%		13.9	%

Other income (expense) - operating

The following table presents the reconciliation of Consolidated Other income (expense) on a GAAP basis to Consolidated Other income (expense) - operating. Other income (expense) – operating is a non-GAAP financial measure which excludes gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP and the portion of net realized gains and losses related to unconsolidated entities. Gains (losses) from fair value changes in separate account assets are reclassified from Other income (expense) for purposes of presenting Life underwriting income, as the offsetting movement in the separate account liabilities is included in Policy benefits. Net realized gains (losses) related to unconsolidated entities is excluded from operating income in order to enhance the understanding of our core results of operations as they are heavily influenced by, and fluctuate in part according to market conditions.


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
Consolidated GAAP Other income (expense):
Consolidated excluding Life segment	$	(40	)	$	(18	)	$	18		$	22		$	12		$	(58	)	$	42		$	82
Life segment		23			23			3			(3	)		13			46			—			—

Consolidated		(17	)		5			21			19			25			(12	)		42			82
Less: Gains (losses) from fair value changes in separate account assets
Consolidated excluding Life segment		—			—			—			—			—			—			—			—
Life segment		6			11			(3	)		(6	)		17			17			11			2

Consolidated		6			11			(3	)		(6	)		17			17			11			2
Less: Net realized gains (losses) related to unconsolidated entities
Consolidated excluding Life segment		16			12			43			51			38			28			91			185
Life segment		17			14			6			4			(2	)		31			(4	)		6

Consolidated		33			26			49			55			36			59			87			191
Consolidated Other income (expense) - operating:
Consolidated excluding Life segment		(56	)		(30	)		(25	)		(29	)		(26	)		(86	)		(49	)		(103	)
Life segment		—			(2	)		—			(1	)		(2	)		(2	)		(7	)		(8	)

Consolidated	$	(56	)	$	(32	)	$	(25	)	$	(30	)	$	(28	)	$	(88	)	$	(56	)	$	(111	)

P&C combined ratio

The following table presents the reconciliation of GAAP combined ratio to P&C combined ratio. The P&C combined ratio includes the impact of realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations.


																YTD			YTD			Full Year
	2Q-15			1Q-15			4Q-14			3Q-14			2Q-14			2015			2014			2014
GAAP combined ratio		87.6	%		88.4	%		88.5	%		87.3	%		87.7	%		88.0	%		88.2	%		88.1	%
Impact of gains and losses on crop derivatives		0.1	%		0.0	%		0.0	%		-1.0	%		-0.2	%		0.0	%		0.0	%		-0.4	%

P&C combined ratio		87.7	%		88.4	%		88.5	%		86.3	%		87.5	%		88.0	%		88.2	%		87.7	%


Reconciliation Non-GAAP 3		Page 24

ACE Limited

Glossary

ACE Limited Consolidated comprises all segments including Corporate.

Operating return on equity (ROE) or ROE calculated using income excluding adjusted net realized gains (losses): Operating income or income excluding adjusted net realized gains (losses), net of tax, divided by average shareholders’ equity for the period excluding unrealized gains (losses) on investments, net of tax. To annualize a quarterly rate multiply by four.

Book value per common share: Shareholders’ equity divided by the shares outstanding.

Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding life business.

Operating effective tax rate: Income tax expense excluding tax expense (benefit) on adjusted net realized gains (losses) divided by income excluding adjusted net realized gains (losses) before tax.

Life underwriting income: Net premiums earned and net investment income less losses and loss expenses, policy benefits, acquisition costs, and administrative expenses. In addition, Life underwriting income includes gains/losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.

Tangible book value per common share: Shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.

Average market yield of fixed maturities: Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.

Average yield on invested assets: Net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.

Tangible capital: Total capitalization less goodwill and other intangible assets.

Total capitalization: Short-term debt, long-term debt, trust preferreds, and shareholders’ equity.

NM: Not meaningful.


Glossary		Page 25

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