Chubb Ltd - FORM 8-K - EX-99.2 - FINANCIAL SUPPLEMENT

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EX-99.1 - PRESS RELEASE - Chubb Ltd	dex991.htm
8-K - FORM 8-K - Chubb Ltd	d8k.htm

Exhibit 99.2

LOGO


Investor Contact

Helen M. Wilson		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.
Phone: (441) 299-9283
Fax: (441) 292-8675 email:

investorrelations@acegroup.com		Cautionary Statement Regarding Forward-Looking Statements:

		Any forward-looking statements made in this financial supplement reflect the company’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 those set forth in these statements. For example, the company’s forward-looking statements, such as statements concerning exposures, reserves and recoverables, could be affected by the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, 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.

		The company’s 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. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 Income Excluding Net Realized Gains (Losses) by Line of Business		4 - 5
	- Consolidating Statement of Operations		6 - 7

III.	Segment Results
	- Insurance - North American		8
	- Insurance - Overseas General		9
	- Global Reinsurance		10
	- Life		11 - 12

IV.	Balance Sheet Details
	- Loss Reserve Rollforward		13
	- Reinsurance Recoverable Analysis		14
	- Investment Portfolio		15 - 21
	- Net Realized and Unrealized Gains (Losses)		22
	- Capital Structure		23 - 24
	- Computation of Basic and Diluted Earnings Per Share		25

V.	Other Disclosures
	- Non-GAAP Financial Measures		26
	- Book Value and Book Value per Common Share		27
	- Comprehensive Income		28
	- Glossary		29


		ACE Limited
		Consolidated Financial Highlights
		(in millions of U.S. dollars, except share, per share data, and ratios)
		(Unaudited)


							% Change 4Q-10 vs.					% Change 4Q-10 vs.									% Change 2010 vs.					% Change 2010 vs.
	Three months ended December 31						% Change 4Q-10 vs.			Constant $		% Change 4Q-10 vs.			Year ended December 31						% Change 2010 vs.			Constant $		% Change 2010 vs.
	2010			2009			4Q-09			2009 ⁽²⁾		4Q-09 ⁽²⁾			2010			2009			2009			2009 ⁽²⁾		2009
Gross premiums written	$	4,565		$	4,507			1	%	$	4,493		2	%	$	19,511		$	19,164			2	%	$	19,382		1	%
Net premiums written	$	3,422		$	3,305			4	%	$	3,296		4	%	$	13,708		$	13,299			3	%	$	13,489		2	%
Net premiums earned	$	3,572		$	3,387			5	%	$	3,377		6	%	$	13,504		$	13,240			2	%	$	13,414		1	%
Net investment income	$	532		$	512			4	%						$	2,070		$	2,031			2	%
Net income	$	1,001		$	953			5	%						$	3,108		$	2,549			22	%
Income excluding net realized gains (losses) ⁽¹⁾	$	702		$	683			3	%						$	2,657		$	2,759			-4	%
Comprehensive income	$	485		$	991			NM							$	3,879		$	5,288			-27	%
Operating cash flow	$	771		$	1,003			-23	%						$	3,546		$	3,335			6	%

P&C combined ratio
Loss and loss expense ratio		58.2	%		59.1	%										59.2	%		58.8	%
Underwriting and administrative expense ratio		32.1	%		30.5	%										31.0	%		29.5	%

Combined ratio		90.3	%		89.6	%										90.2	%		88.3	%
Annualized ROE*		13.2	%		14.7	%										13.1	%		15.7	%
Annualized ROE on net income		17.5	%		19.9	%										14.6	%		14.9	%
Effective tax rate on income excluding net realized gains (losses)		13.5	%		16.6	%										16.1	%		17.3	%

Diluted earnings per share
Income excluding net realized gains (losses)⁽¹⁾	$	2.05		$	2.01			2	%						$	7.79		$	8.17			-5	%
Net income	$	2.92		$	2.81			4	%						$	9.11		$	7.55			21	%

Book value per common share															$	68.59		$	58.44			17	%
Tangible book value per common share															$	54.63		$	46.76			17	%

Weighted average basic common shares outstanding		340.2			337.4											339.7			336.7
Weighted average diluted common shares outstanding		342.6			339.0											341.2			337.5

Debt/total capitalization		16.7	%		14.2	%

(1)	See Non-GAAP Financial Measures.

(2)	Prior periods on a constant dollar basis.

*	Calculated using income excluding net realized gains (losses).


Financial Highlights		Page 1


		ACE Limited
		Consolidated Results - Consecutive Quarters
		(in millions of U.S. dollars)
		(Unaudited)


ACE Limited Consolidated	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009
Consolidated Results Excluding Life Segment
Gross premiums written	$	4,152		$	4,624		$	4,756		$	4,400		$	4,110		$	17,932		$	17,615
Net premiums written		3,015			2,922			3,029			3,186			2,915			12,152			11,824
Net premiums earned		3,184			3,036			2,845			2,897			3,018			11,962			11,810
Losses and loss expenses		1,854			1,768			1,671			1,790			1,784			7,083			6,940
Policy benefits		—			—			1			3			1			4			4
Policy acquisition costs		575			542			470			493			504			2,080			1,914
Administrative expenses		445			374			409			402			416			1,630			1,568

Underwriting income excluding Life segment		310			352			294			209			313			1,165			1,384

Life underwriting income excluding investment income		59			50			53			46			60			208			168
Net investment income		532			516			518			504			512			2,070			2,031
Net realized gains (losses)		305			(50	)		9			168			373			432			(196	)
Interest expense		62			58			52			52			56			224			225
Other income (expense) ⁽¹⁾		(10	)		25			(3	)		4			(41	)		16			(85	)
Income tax expense		133			160			142			124			208			559			528

Net income		1,001			675			677			755			953			3,108			2,549

Net realized gains (losses)		305			(50	)		9			168			373			432			(196	)
Net realized gains (losses) in other income (expense)⁽¹⁾		17			39			3			10			(31	)		69			(63	)
Tax expense (benefit) on net realized gains (losses)		23			2			23			2			72			50			(49	)

Income excluding net realized gains (losses) ⁽²⁾	$	702		$	688		$	688		$	579		$	683		$	2,657		$	2,759


% Change versus prior year period⁽³⁾
Net premiums written		3	%		5	%		-1	%		4	%		9	%		3	%		0	%
Net premiums earned		6	%		0	%		-2	%		1	%		5	%		1	%		-2	%

Net premiums written constant $		4	%		5	%		-3	%		0	%		4	%		1	%		3	%
Net premiums earned constant $		6	%		1	%		-4	%		-3	%		1	%		0	%		2	%

Other ratios
Net premiums written/gross premiums written		73	%		63	%		64	%		72	%		71	%		68	%		67	%
Effective tax rate on income excluding net realized gains (losses)		13.5	%		18.7	%		14.7	%		17.4	%		16.6	%		16.1	%		17.3	%

P&C combined ratio ⁽³⁾
Loss and loss expense ratio		58.2	%		58.2	%		58.8	%		61.9	%		59.1	%		59.2	%		58.8	%
Policy acquisition cost ratio		18.1	%		17.9	%		16.5	%		17.0	%		16.7	%		17.4	%		16.2	%
Administrative expense ratio		14.0	%		12.3	%		14.4	%		13.9	%		13.8	%		13.6	%		13.3	%

Combined ratio		90.3	%		88.4	%		89.7	%		92.8	%		89.6	%		90.2	%		88.3	%


P&C expense ratio		32.1	%		30.2	%		30.9	%		30.9	%		30.5	%		31.0	%		29.5	%
P&C expense ratio excluding A&H		28.2	%		25.7	%		26.5	%		26.9	%		26.0	%		26.8	%		25.0	%

Large losses and other items (before tax) ⁽³⁾
Reinstatement premiums (expensed) collected	$	1		$	(6	)	$	(5	)	$	(25	)	$	—		$	(35	)	$	1
Catastrophe losses	$	51		$	91		$	76		$	148		$	23		$	366		$	137
Prior period development excluding Life - unfavorable (favorable) ⁽⁴⁾	$	(57	)	$	(201	)	$	(149	)	$	(96	)	$	(147	)	$	(503	)	$	(576	)
Loss and loss expense ratio excluding catastophe losses and prior period development		58.5	%		61.7	%		61.2	%		61.1	%		63.3	%		60.6	%		62.5	%

(1)	Net realized investment and derivative losses related to unconsolidated entities.

(2)	See Non-GAAP Financial Measures.

(3)	Presented excluding the Life segment to allow for comparison and analysis with earnings guidance. This is a non-GAAP measure.

(4)	For Q1 2010, prior period favorable development is net of $45 million for the annual crop insurance profit-sharing commission that is included in the expense ratio.


Consolidated Results		Page 2


		ACE Limited
		Summary Consolidated Balance Sheets
		(in millions of U.S. dollars, except per share data)


	December 31 2010			September 30 2010			June 30 2010			March 31 2010			December 31 2009
Assets	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
Fixed maturities available for sale, at fair value	$	37,539		$	41,103		$	41,554		$	40,564		$	39,525
Fixed maturities held to maturity, at amortized cost		9,501			5,977			3,222			3,335			3,481
Equity securities, at fair value		692			415			214			316			467
Short-term investments, at fair value		1,983			1,857			2,097			2,052			1,667
Other investments		1,692			1,619			1,462			1,472			1,375

Total investments		51,407			50,971			48,549			47,739			46,515

Cash		772			487			668			726			669
Securities lending collateral		1,495			1,629			1,429			1,611			1,544
Insurance and reinsurance balances receivable		4,233			3,694			3,958			3,685			3,671
Reinsurance recoverable on losses and loss expenses		12,871			13,475			13,132			13,335			13,595
Deferred policy acquisition costs		1,641			1,621			1,574			1,517			1,445
Value of business acquired		634			656			668			712			748
Prepaid reinsurance premiums		1,511			1,678			1,904			1,646			1,521
Goodwill and other intangible assets		4,676			3,906			3,836			3,883			3,931
Deferred tax assets		757			873			1,105			1,174			1,154
Investments in partially owned insurance companies		360			510			459			454			433
Other assets		2,998			2,888			2,878			2,847			2,754

Total assets	$	83,355		$	82,388		$	80,160		$	79,329		$	77,980


Liabilities
Unpaid losses and loss expenses	$	37,391		$	37,742		$	37,062		$	37,551		$	37,783
Unearned premiums		6,330			6,571			6,836			6,437			6,067
Future policy benefits		3,106			3,083			3,034			3,057			3,008
Insurance and reinsurance balances payable		3,282			3,091			3,331			3,147			3,295
Securities lending payable		1,518			1,653			1,454			1,639			1,586
Payable for securities purchased		292			473			400			534			154
Accounts payable, accrued expenses, and other liabilities		3,495			3,308			3,019			2,711			2,792
Short-term debt		1,300			155			147			150			161
Long-term debt		3,358			3,158			3,158			3,158			3,158
Trust preferred securities		309			309			309			309			309

Total liabilities		60,381			59,543			58,750			58,693			58,313

Shareholders’ equity
Total shareholders’ equity, excl. AOCI		21,380			20,735			20,116			19,510			18,844
Accumulated other comprehensive income (AOCI)		1,594			2,110			1,294			1,126			823

Total shareholders’ equity		22,974			22,845			21,410			20,636			19,667

Total liabilities and shareholders’ equity	$	83,355		$	82,388		$	80,160		$	79,329		$	77,980

Book value per common share ⁽¹⁾	$	68.59		$	67.34		$	63.20		$	60.94		$	58.44
% change over prior quarter		2	%		7	%		4	%		4	%		5	%
Tangible book value per common share ⁽¹⁾	$	54.63		$	55.83		$	51.88		$	49.48		$	46.76
% change over prior quarter		-2	%		8	%		5	%		6	%		5	%

(1)	See Non-GAAP Financial Measures.


Consol Bal Sheet		Page 3


		ACE Limited
		Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business
		(in millions of U.S. dollars)
		(Unaudited)

ACE Limited Consolidated


	4Q-10		% of Total Consolidated			4Q-09		% of Total Consolidated			% Change 4Q-10 vs. 4Q-09			Full Year 2010		% of Total Consolidated			Full Year 2009		% of Total Consolidated			% Change 2010 vs. 2009
Net premiums written
Property and all other	$	953		28	%	$	767		23	%		24	%	$	4,052		30	%	$	4,060		31	%		0	%
Casualty		1,444		42	%		1,555		47	%		-7	%		5,768		42	%		5,547		42	%		4	%

Subtotal		2,397		70	%		2,322		70	%		3	%		9,820		72	%		9,607		73	%		2	%
Personal accident (A&H) ⁽¹⁾		876		26	%		864		26	%		1	%		3,346		24	%		3,229		24	%		4	%
Life ⁽²⁾		149		4	%		119		4	%		25	%		542		4	%		463		3	%		17	%

Total consolidated	$	3,422		100	%	$	3,305		100	%		4	%	$	13,708		100	%	$	13,299		100	%		3	%


Add: Life deposits on investment contracts		93					100					-7	%		257					404					-36	%

Non-GAAP total net premium written	$	3,515				$	3,405					3	%	$	13,965				$	13,703					2	%


Net premiums earned
Property and all other	$	1,027		29	%	$	961		29	%		7	%	$	3,898		29	%	$	4,023		30	%		-3	%
Casualty		1,546		43	%		1,465		43	%		6	%		5,752		43	%		5,587		42	%		3	%

Subtotal		2,573		72	%		2,426		72	%		6	%		9,650		72	%		9,610		72	%		0	%
Personal accident (A&H) ⁽¹⁾		861		24	%		850		25	%		1	%		3,331		25	%		3,198		25	%		4	%
Life ⁽²⁾		138		4	%		111		3	%		24	%		523		3	%		432		3	%		21	%

Total consolidated	$	3,572		100	%	$	3,387		100	%		5	%	$	13,504		100	%	$	13,240		100	%		2	%


Income excluding net realized gains (losses)
Property, casualty, and all other	$	551		78	%	$	527		77	%		5	%	$	2,093		79	%	$	2,221		80	%		-6	%
Personal accident (A&H) ⁽¹⁾		119		17	%		113		17	%		5	%		427		16	%		404		15	%		6	%
Life ⁽²⁾		32		5	%		43		6	%		-26	%		137		5	%		134		5	%		2	%

Total consolidated	$	702		100	%	$	683		100	%		3	%	$	2,657		100	%	$	2,759		100	%		-4	%

⁽¹⁾	Consolidated A&H includes Combined Insurance which is reported in the Insurance - Overseas General and Life segments.

⁽²⁾	Excludes the North America A&H business from Combined Insurance which is included in the Life segment.


Line of Business		Page 4


		ACE Limited Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business, Adjusted for Foreign Exchange (in millions of U.S. dollars) (Unaudited)


ACE Limited Consolidated Constant Dollar	4Q-10		Constant $ 4Q-09⁽³⁾		Constant $ % Change 4Q-10 vs. 4Q-09 ⁽³⁾			Full Year 2010		Constant $ Full Year 09⁽³⁾		Constant $ % Change 2010 vs. 2009 ⁽³⁾
Net premiums written
Property, casualty, and all other	$	2,397	$	2,315		4	%	$	9,820	$	9,693		1	%
Personal accident (A&H) ⁽¹⁾		876		862		2	%		3,346		3,331		0	%
Life ⁽²⁾		149		119		25	%		542		465		17	%

Total consolidated	$	3,422	$	3,296		4	%	$	13,708	$	13,489		2	%


Net premiums earned
Property, casualty, and all other	$	2,573	$	2,417		6	%	$	9,650	$	9,682		0	%
Personal accident (A&H) ⁽¹⁾		861		849		1	%		3,331		3,298		1	%
Life ⁽²⁾		138		111		24	%		523		434		21	%

Total consolidated	$	3,572	$	3,377		6	%	$	13,504	$	13,414		1	%


Income excluding net realized gains (losses)
Property, casualty, and all other	$	551	$	524		5	%	$	2,093	$	2,223		-6	%
Personal accident (A&H) ⁽¹⁾		119		111		7	%		427		419		2	%
Life ⁽²⁾		32		43		-26	%		137		134		2	%

Total consolidated	$	702	$	678		4	%	$	2,657	$	2,776		-4	%

⁽¹⁾	Consolidated A&H includes Combined Insurance which is reported in the Insurance - Overseas General and Life segments.

⁽²⁾	Excludes the North America A&H business from Combined Insurance which is included in the Life segment.

⁽³⁾	Prior periods on a constant dollar basis.


Line of Business 2		Page 5


		ACE Limited
		Consolidating Statement of Operations
		Three months ended December 31, 2010 and 2009
		(in millions of U.S. dollars)
		(Unaudited)


	Insurance - North American			Insurance - Overseas General			Global Reinsurance			Corporate & Other			Consolidated Excluding Life Segment			Life			ACE Consolidated
December 31, 2010
Gross premiums written	$	2,256		$	1,750		$	146		$	—		$	4,152		$	413		$	4,565
Net premiums written		1,519			1,353			143			—			3,015			407			3,422
Net premiums earned		1,511			1,405			268			—			3,184			388			3,572
Losses and loss expenses		1,030			697			127			—			1,854			117			1,971
Policy benefits		—			—			—			—			—			90			90
Policy acquisition costs		178			346			51			—			575			65			640
Administrative expenses		154			227			14			50			445			57			502

Underwriting income (loss)		149			135			76			(50	)		310			59			369

Net investment income		286			128			75			—			489			43			532
Net realized gains (losses)		254			21			24			1			300			5			305
Interest expense		3			1			—			55			59			3			62
Other income (expense)		1			8			7			(17	)		(1	)		(9	)		(10	)
Income tax expense (benefit)		114			37			11			(45	)		117			16			133

Net income (loss)		573			254			171			(76	)		922			79			1,001

Net realized gains (losses)		254			21			24			1			300			5			305
Net realized gains (losses) in other income (expense)		3			7			6			—			16			1			17
Tax expense (benefit) on net realized gains (losses)		14			3			—			1			18			5			23

Income (loss) excluding net realized gains (losses) ⁽¹⁾	$	330		$	229		$	141		$	(76	)	$	624		$	78		$	702


December 31, 2009
Gross premiums written	$	2,196		$	1,752		$	162		$	—		$	4,110		$	397		$	4,507
Net premiums written		1,421			1,350			144			—			2,915			390			3,305
Net premiums earned		1,365			1,400			253			—			3,018			369			3,387
Losses and loss expenses		959			718			107			—			1,784			116			1,900
Policy benefits		—			1			—			—			1			68			69
Policy acquisition costs		123			333			48			—			504			55			559
Administrative expenses		139			214			14			49			416			70			486

Underwriting income (loss)		144			134			84			(49	)		313			60			373

Net investment income		278			124			68			(2	)		468			44			512
Net realized gains (losses)		252			20			30			(9	)		293			80			373
Interest expense		1			—			—			55			56			—			56
Other income (expense)		(27	)		(8	)		(2	)		(3	)		(40	)		(1	)		(41	)
Income tax expense (benefit)		165			55			8			(31	)		197			11			208

Net income (loss)		481			215			172			(87	)		781			172			953

Net realized gains (losses)		252			20			30			(9	)		293			80			373
Net realized gains (losses) in other income (expense)		(26	)		(2	)		(4	)		(1	)		(33	)		2			(31	)
Tax expense (benefit) on net realized gains (losses)		63			10			—			(1	)		72			—			72

Income (loss) excluding net realized gains (losses) ⁽¹⁾	$	318		$	207		$	146		$	(78	)	$	593		$	90		$	683

⁽¹⁾	See Non-GAAP Financial Measures.


Segment 2010 Qtr		Page 6


		ACE Limited
		Consolidating Statement of Operations
		Year ended December 31, 2010 and 2009
		(in millions of U.S. dollars)
		(Unaudited)


	Insurance - North American			Insurance - Overseas General			Global Reinsurance			Corporate & Other			Consolidated Excluding Life Segment			Life			ACE Consolidated
December 31, 2010
Gross premiums written	$	9,794		$	6,992		$	1,146		$	—		$	17,932		$	1,579		$	19,511
Net premiums written		5,797			5,280			1,075			—			12,152			1,556			13,708
Net premiums earned		5,651			5,240			1,071			—			11,962			1,542			13,504
Losses and loss expenses		3,918			2,647			518			—			7,083			496			7,579
Policy benefits		—			4			—			—			4			353			357
Policy acquisition costs		625			1,251			204			—			2,080			257			2,337
Administrative expenses		561			840			55			174			1,630			228			1,858

Underwriting income (loss)		547			498			294			(174	)		1,165			208			1,373

Net investment income		1,138			475			288			(3	)		1,898			172			2,070
Net realized gains (losses)		417			123			93			(9	)		624			(192	)		432
Interest expense		9			1			—			211			221			3			224
Other income (expense)		22			13			23			(22	)		36			(20	)		16
Income tax expense (benefit)		436			173			42			(154	)		497			62			559

Net income (loss)		1,679			935			656			(265	)		3,005			103			3,108

Net realized gains (losses)		417			123			93			(9	)		624			(192	)		432
Net realized gains (losses) in other income (expense)		24			22			21			—			67			2			69
Tax expense (benefit) on net realized gains (losses)		26			23			1			(7	)		43			7			50

Income (loss) excluding net realized gains (losses) ⁽¹⁾	$	1,264		$	813		$	543		$	(263	)	$	2,357		$	300		$	2,657


December 31, 2009
Gross premiums written	$	9,668		$	6,832		$	1,115		$	—		$	17,615		$	1,549		$	19,164
Net premiums written		5,641			5,145			1,038			—			11,824			1,475			13,299
Net premiums earned		5,684			5,147			979			—			11,810			1,430			13,240
Losses and loss expenses		4,013			2,597			330			—			6,940			482			7,422
Policy benefits		—			4			—			—			4			321			325
Policy acquisition costs		517			1,202			195			—			1,914			216			2,130
Administrative expenses		572			783			55			158			1,568			243			1,811

Underwriting income (loss)		582			561			399			(158	)		1,384			168			1,552

Net investment income		1,094			479			278			4			1,855			176			2,031
Net realized gains (losses)		10			(20	)		(17	)		(154	)		(181	)		(15	)		(196	)
Interest expense		1			—			—			224			225			—			225
Other income (expense)		(36	)		(20	)		(2	)		(25	)		(83	)		(2	)		(85	)
Income tax expense (benefit)		384			186			46			(136	)		480			48			528

Net income (loss)		1,265			814			612			(421	)		2,270			279			2,549

Net realized gains (losses)		10			(20	)		(17	)		(154	)		(181	)		(15	)		(196	)
Net realized gains (losses) in other income (expense)		(31	)		4			(4	)		(41	)		(72	)		9			(63	)
Tax expense (benefit) on net realized gains (losses)		(41	)		9			—			(15	)		(47	)		(2	)		(49	)

Income (loss) excluding net realized gains (losses) ⁽¹⁾	$	1,245		$	839		$	633		$	(241	)	$	2,476		$	283		$	2,759

⁽¹⁾	See Non-GAAP Financial Measures.


Segment 2010 YTD		Page 7


		ACE Limited
		Segment Results - Consecutive Quarters
		(in millions of U.S. dollars)
		(Unaudited)


Insurance - North American	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009

Gross premiums written	$	2,256		$	2,759		$	2,649		$	2,130		$	2,196		$	9,794		$	9,668
Net premiums written		1,519			1,445			1,438			1,395			1,421			5,797			5,641
Net premiums earned		1,511			1,444			1,326			1,370			1,365			5,651			5,684
Losses and loss expenses		1,030			1,026			924			938			959			3,918			4,013
Policy acquisition costs		178			165			126			156			123			625			517
Administrative expenses		154			112			147			148			139			561			572

Underwriting income		149			141			129			128			144			547			582

Net investment income		286			287			287			278			278			1,138			1,094
Net realized gains (losses)		254			(2	)		85			80			252			417			10
Interest expense		3			6			—			—			1			9			1
Other income (expense)		1			20			(4	)		5			(27	)		22			(36	)
Income tax expense		114			108			110			104			165			436			384

Net income		573			332			387			387			481			1,679			1,265

Net realized gains (losses)		254			(2	)		85			80			252			417			10
Net realized gains (losses) in other income (expense)		3			20			1			—			(26	)		24			(31	)
Tax expense (benefit) on net realized gains (losses)		14			(2	)		12			2			63			26			(41	)

Income excluding net realized gains (losses) ⁽¹⁾	$	330		$	312		$	313		$	309		$	318		$	1,264		$	1,245


Combined ratio
Loss and loss expense ratio		68.1	%		71.0	%		69.7	%		68.5	%		70.3	%		69.3	%		70.6	%
Policy acquisition cost ratio		11.8	%		11.4	%		9.5	%		11.4	%		9.0	%		11.1	%		9.1	%
Administrative expense ratio		10.2	%		7.8	%		11.1	%		10.8	%		10.2	%		9.9	%		10.1	%

Combined ratio		90.1	%		90.2	%		90.3	%		90.7	%		89.5	%		90.3	%		89.8	%


Large losses and other items (before tax)
Reinstatement premiums (expensed) collected	$	1		$	1		$	(3	)	$	(3	)	$	—		$	(4	)	$	—
Catastrophe losses	$	21		$	17		$	53		$	52		$	10		$	143		$	58
Prior period development - unfavorable (favorable)⁽²⁾	$	46		$	(35	)	$	(73	)	$	(45	)	$	(50	)	$	(107	)	$	(179	)

Loss and loss expense ratio excluding catastophe losses and prior period development		63.7	%		72.4	%		71.0	%		71.1	%		73.3	%		69.4	%		72.7	%

% Change versus prior year period
Net premiums written		7	%		5	%		-1	%		0	%		9	%		3	%		0	%
Net premiums earned		11	%		-2	%		-6	%		-5	%		-1	%		-1	%		0	%

Other ratios
Net premiums written/gross premiums written		67	%		52	%		54	%		65	%		65	%		59	%		58	%

(1)	See Non-GAAP Financial Measures.

(2)	For Q1 2010, prior period favorable development is net of $45 million for the annual crop insurance profit-sharing commission that is included in the expense ratio.


Insurance-North American		Page 8


		ACE Limited
		Segment Results - Consecutive Quarters
		(in millions of U.S. dollars)
		(Unaudited)


Insurance - Overseas General	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009

Gross premiums written	$	1,750		$	1,584		$	1,787		$	1,871		$	1,752		$	6,992		$	6,832
Net premiums written		1,353			1,205			1,302			1,420			1,350			5,280			5,145
Net premiums earned		1,405			1,321			1,263			1,251			1,400			5,240			5,147
Losses and loss expenses		697			605			644			701			718			2,647			2,597
Policy benefits		—			—			1			3			1			4			4
Policy acquisition costs		346			326			296			283			333			1,251			1,202
Administrative expenses		227			204			207			202			214			840			783

Underwriting income		135			186			115			62			134			498			561

Net investment income		128			118			115			114			124			475			479
Net realized gains (losses)		21			32			48			22			20			123			(20	)
Interest expense		1			—			—			—			—			1			—
Other income (expense)		8			4			3			(2	)		(8	)		13			(20	)
Income tax expense		37			63			59			14			55			173			186

Net income		254			277			222			182			215			935			814

Net realized gains (losses)		21			32			48			22			20			123			(20	)
Net realized gains (losses) in other income (expense)		7			9			1			5			(2	)		22			4
Tax expense (benefit) on net realized gains (losses)		3			6			13			1			10			23			9

Income excluding net realized gains (losses) ⁽¹⁾	$	229		$	242		$	186		$	156		$	207		$	813		$	839


Combined ratio
Loss and loss expense ratio		49.6	%		45.8	%		51.0	%		56.3	%		51.3	%		50.6	%		50.5	%
Policy acquisition cost ratio		24.6	%		24.7	%		23.5	%		22.6	%		23.7	%		23.9	%		23.3	%
Administrative expense ratio		16.1	%		15.5	%		16.4	%		16.1	%		15.3	%		16.0	%		15.2	%

Combined ratio		90.3	%		86.0	%		90.9	%		95.0	%		90.3	%		90.5	%		89.0	%


Large losses and other items (before tax)
Reinstatement premiums (expensed) collected	$	—		$	(7	)	$	(2	)	$	(24	)	$	—		$	(33	)	$	(1	)
Catastrophe losses	$	25		$	25		$	18		$	64		$	10		$	132		$	51
Prior period development - unfavorable (favorable)	$	(91	)	$	(117	)	$	(45	)	$	(37	)	$	(86	)	$	(290	)	$	(255	)
Loss and loss expense ratio excluding catastophe losses and prior period development		54.4	%		52.5	%		53.0	%		53.1	%		56.7	%		53.3	%		54.5	%

% Change versus prior year period
Net premiums written as reported		0	%		0	%		3	%		7	%		8	%		3	%		-4	%
Net premiums earned as reported		0	%		0	%		1	%		6	%		12	%		2	%		-4	%

Net premiums written constant $		1	%		1	%		-1	%		0	%		0	%		0	%		3	%
Net premiums earned constant $		1	%		2	%		-2	%		-3	%		3	%		0	%		3	%
Underwriting income constant $													$	130					$	561
Income excluding net realized gains (losses), constant $													$	201					$	841

Other ratios
Net premiums written/gross premiums written		77	%		76	%		73	%		76	%		77	%		76	%		75	%

(1)	See Non-GAAP Financial Measures.


Insurance-Overseas General		Page 9


		ACE Limited
		Segment Results - Consecutive Quarters
		(in millions of U.S. dollars)
		(Unaudited)


Global Reinsurance	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009

Gross premiums written	$	146		$	281		$	320		$	399		$	162		$	1,146		$	1,115
Net premiums written		143			272			289			371			144			1,075			1,038
Net premiums earned		268			271			256			276			253			1,071			979
Losses and loss expenses		127			137			103			151			107			518			330
Policy acquisition costs		51			51			48			54			48			204			195
Administrative expenses		14			14			15			12			14			55			55

Underwriting income		76			69			90			59			84			294			399

Net investment income		75			71			73			69			68			288			278
Net realized gains (losses)		24			10			28			31			30			93			(17	)
Other income (expense)		7			10			2			4			(2	)		23			(2	)
Income tax expense		11			12			9			10			8			42			46

Net income		171			148			184			153			172			656			612

Net realized gains (losses)		24			10			28			31			30			93			(17	)
Net realized gains (losses) in other income (expense)		6			10			1			4			(4	)		21			(4	)
Tax expense (benefit) on net realized gains (losses)		—			1			—			—			—			1			—

Income excluding net realized gains (losses) ⁽¹⁾	$	141		$	129		$	155		$	118		$	146		$	543		$	633


Combined ratio
Loss and loss expense ratio		47.5	%		50.4	%		40.4	%		54.7	%		42.4	%		48.4	%		33.7	%
Policy acquisition cost ratio		19.0	%		19.0	%		18.5	%		19.6	%		19.1	%		19.0	%		19.9	%
Administrative expense ratio		5.2	%		4.9	%		5.8	%		4.5	%		5.6	%		5.1	%		5.6	%

Combined ratio		71.7	%		74.3	%		64.7	%		78.8	%		67.1	%		72.5	%		59.2	%


Large losses and other items (before tax)
Reinstatement premiums (expensed) collected	$	—		$	—		$	—		$	2		$	—		$	2		$	2
Catastrophe losses	$	5		$	49		$	5		$	32		$	3		$	91		$	28
Prior period development - unfavorable (favorable)	$	(12	)	$	(49	)	$	(31	)	$	(14	)	$	(11	)	$	(106	)	$	(142	)
Loss and loss expense ratio excluding catastophe losses and prior period development		50.3	%		50.2	%		50.9	%		48.4	%		45.5	%		50.0	%		45.4	%

% Change versus prior year period
Net premiums written		-1	%		32	%		-12	%		3	%		14	%		4	%		14	%
Net premiums earned		6	%		10	%		6	%		16	%		5	%		9	%		-4	%

Other ratios
Net premiums written/gross premiums written		98	%		97	%		90	%		93	%		89	%		94	%		93	%

(1)	See Non-GAAP Financial Measures.


Global Reinsurance		Page 10


		ACE Limited
		Segment Results - Consecutive Quarters
		(in millions of U.S. dollars)
		(Unaudited)


Life	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009

Gross premiums written⁽¹⁾	$	413		$	378		$	398		$	390		$	397		$	1,579		$	1,549
Net premiums written		407			373			391			385			390			1,556			1,475
Net premiums earned		388			386			388			380			369			1,542			1,430
Losses and loss expenses		117			119			129			131			116			496			482
Policy benefits		90			93			86			84			68			353			321
Policy acquisition costs		65			65			66			61			55			257			216
Administrative expenses		57			59			54			58			70			228			243
Net investment income		43			43			43			43			44			172			176

Life underwriting income ⁽²⁾		102			93			96			89			104			380			344

Net realized gains (losses)		5			(85	)		(155	)		43			80			(192	)		(15	)
Interest expense		3			—			—			—			—			3			—
Other income (expense)		(9	)		(5	)		(3	)		(3	)		(1	)		(20	)		(2	)
Income tax expense		16			16			16			14			11			62			48

Net income (loss)		79			(13	)		(78	)		115			172			103			279

Net realized gains (losses)		5			(85	)		(155	)		43			80			(192	)		(15	)
Net realized gains (losses) in other income (expense)		1			—			—			1			2			2			9
Tax expense (benefit) on net realized gains (losses)		5			—			1			1			—			7			(2	)

Income excluding net realized gains (losses) ⁽³⁾	$	78		$	72		$	78		$	72		$	90		$	300		$	283


Prior period development - unfavorable (favorable)	$	(2	)	$	(4	)	$	(3	)	$	—		$	(4	)		(9	)		(3	)

Deposits collected on universal life and investment contracts⁽¹⁾	$	93		$	51		$	58		$	55		$	100		$	257		$	404
Fees on universal life and investment contracts ⁽¹⁾	$	14		$	10		$	11		$	7		$	11		$	42		$	34

% Change versus prior year period
Net premiums written		4	%		0	%		7	%		11	%		5	%		5	%		23	%
Net premiums earned		5	%		7	%		7	%		13	%		3	%		8	%		22	%

(1)	Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues. Fees on universal life and investment contracts are revenue for GAAP and have been classified as gross premiums written.

(2)	We assess the performance of our Life business based on life underwriting income which includes net investment income.

(3)	See Non-GAAP Financial Measures.


Life		Page 11


		ACE Limited
		Segment Results - Life Reinsurance
		(in millions of U.S. dollars)
		(Unaudited)

Variable Annuity (VA) Lines

Historical Cash Flow Summary by Quarter


Death Benefits (GMDB)	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009
Premium	$	27		$	27		$	27		$	28		$	28		$	109		$	108
Less paid claims		31			33			28			33			33			125			152

Net	$	(4	)	$	(6	)	$	(1	)	$	(5	)	$	(5	)	$	(16	)	$	(44	)


Guaranteed Living Benefits (Includes GMIB and GMAB)
	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009
Premium	$	41		$	41		$	40		$	40		$	41		$	162		$	162
Less paid claims		1			1			1			1			1			4			5

Net	$	40		$	40		$	39		$	39		$	40		$	158		$	157


Total VA Guaranteed Benefits
	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009
Premium	$	68		$	68		$	67		$	68		$	69		$	271		$	270
Less paid claims		32			34			29			34			34			129			157

Net	$	36		$	34		$	38		$	34		$	35		$	142		$	113

Amounts represent accrued past premium received and claims paid by quarter, split by benefit type.

Death Benefits (GMDB)

Premiums and claims from VA contracts reinsuring Guaranteed Minimum Death Benefits (GMDB).

At current market levels we expect approximately $105 million of claims and $91 million of premium on death benefits over the next 12 months.

Guaranteed Living Benefits (Includes GMIB and GMAB)

Premiums and claims from VA contracts reinsuring Guaranteed Minimum Income Benefits (GMIB) and Guaranteed Minimum Accumulation Benefits (GMAB), collectively known as Guaranteed Living Benefits.

At current market levels we expect approximately $1 million of claims and $149 million of premium on living benefits over the next 12 months.


Variable Annuity		Page 12


		ACE Limited
		Loss Reserve Rollforward
		(in millions of U.S. dollars)
		(Unaudited)


	Unpaid Losses									Net Paid to Incurred Ratio
	Gross			Ceded			Net			Net Paid to Incurred Ratio
Balance at December 31, 2008	$	37,176		$	12,935		$	24,241
Losses and loss expenses incurred		2,454			638			1,816
Losses and loss expenses paid		(2,504	)		(762	)		(1,742	)		96	%
Other (incl. foreign exch. revaluation)		(195	)		(57	)		(138	)

Balance at March 31, 2009	$	36,931		$	12,754		$	24,177
Losses and loss expenses incurred		2,633			812			1,821
Losses and loss expenses paid		(2,868	)		(1,154	)		(1,714	)		94	%
Other (incl. foreign exch. revaluation)		572			144			428

Balance at June 30, 2009	$	37,268		$	12,556		$	24,712
Losses and loss expenses incurred		3,268			1,383			1,885
Losses and loss expenses paid		(2,972	)		(1,235	)		(1,737	)		92	%
Other (incl. foreign exch. revaluation)		307			96			211

Balance at September 30, 2009	$	37,871		$	12,800		$	25,071
Losses and loss expenses incurred		2,786			886			1,900
Losses and loss expenses paid		(2,749	)		(994	)		(1,755	)		92	%
Other (incl. foreign exch. revaluation)		(125	)		53			(178	)

Balance at December 31, 2009	$	37,783		$	12,745		$	25,038
Losses and loss expenses incurred		2,544			623			1,921
Losses and loss expenses paid		(2,491	)		(729	)		(1,762	)		92	%
Other (incl. foreign exch. revaluation)		(285	)		(79	)		(206	)

Balance at March 31, 2010	$	37,551		$	12,560		$	24,991
Losses and loss expenses incurred		2,725			925			1,800
Losses and loss expenses paid		(2,824	)		(976	)		(1,848	)		103	%
Other (incl. foreign exch. revaluation)		(390	)		(135	)		(255	)

Balance at June 30, 2010	$	37,062		$	12,374		$	24,688
Losses and loss expenses incurred		3,236			1,349			1,887
Losses and loss expenses paid		(3,010	)		(1,139	)		(1,871	)		99	%
Other (incl. foreign exch. revaluation)		454			166			288

Balance at September 30, 2010	$	37,742		$	12,750		$	24,992
Losses and loss expenses incurred		2,350			379			1,971
Losses and loss expenses paid		(2,954	)		(1,022	)		(1,932	)		98	%
Other (incl. foreign exch. revaluation)		253			42			211

Balance at December 31, 2010	$	37,391		$	12,149		$	25,242


Add net recoverable on paid losses		—			722			(722	)

Balance including net recoverable on paid losses	$	37,391		$	12,871		$	24,520


Loss Reserve Rollforward		Page 13


		ACE Limited
		Reinsurance Recoverable Analysis
		(in millions of U.S. dollars)
		(Unaudited)

Net Reinsurance Recoverable by Division


	December 31 2010			September 30 2010			June 30 2010			March 31 2010			December 31 2009
Reinsurance recoverable on paid losses and loss expenses
Active operations	$	579		$	571		$	550		$	605		$	703
Brandywine		281			278			294			284			289
Westchester Run-off		26			31			31			36			36
Other Run-off		12			12			13			13			13

Total	$	898		$	892		$	888		$	938		$	1,041

Reinsurance recoverable on unpaid losses and loss expenses
Active operations	$	9,956		$	10,638		$	10,212		$	10,250		$	10,316
Brandywine		2,024			1,998			2,084			2,197			2,268
Westchester Run-off		468			464			473			474			482
Other Run-off		55			23			27			30			70

Total	$	12,503		$	13,123		$	12,796		$	12,951		$	13,136

Gross reinsurance recoverable
Active operations	$	10,535		$	11,209		$	10,762		$	10,855		$	11,019
Brandywine		2,305			2,276			2,378			2,481			2,557
Westchester Run-off		494			495			504			510			518
Other Run-off		67			35			40			43			83

Total	$	13,401		$	14,015		$	13,684		$	13,889		$	14,177

Provision for uncollectible reinsurance
Active operations	$	(324	)	$	(326	)	$	(357	)	$	(360	)	$	(399	)
Brandywine		(175	)		(184	)		(166	)		(165	)		(147	)
Westchester Run-off		(21	)		(25	)		(25	)		(25	)		(25	)
Other Run-off		(10	)		(5	)		(4	)		(4	)		(11	)

Total	$	(530	)	$	(540	)	$	(552	)	$	(554	)	$	(582	)

Net reinsurance recoverable
Active operations	$	10,211		$	10,883		$	10,405		$	10,495		$	10,620
Brandywine		2,130			2,092			2,212			2,316			2,410
Westchester Run-off		473			470			479			485			493
Other Run-off		57			30			36			39			72

Total	$	12,871		$	13,475		$	13,132		$	13,335		$	13,595


Reinsurance Recoverable		Page 14


		ACE Limited
		Investment Portfolio
		(in millions of U.S. dollars)
		(Unaudited)


	December 31 2010					September 30 2010					June 30 2010					March 31 2010					December 31 2009
Market Value
Fixed maturities available for sale	$	37,539				$	41,103				$	41,554				$	40,564				$	39,525
Fixed maturities held to maturity		9,461					6,104					3,339					3,433					3,561
Short-term investments		1,983					1,857					2,097					2,052					1,667

Total	$	48,983				$	49,064				$	46,990				$	46,049				$	44,753

Asset Allocation by Market Value
Treasury	$	2,075		4	%	$	2,168		4	%	$	2,207		5	%	$	2,268		5	%	$	2,068		5	%
Agency		2,015		4	%		2,242		5	%		2,298		5	%		2,449		5	%		2,698		6	%
Corporate and asset-backed		15,900		33	%		16,186		33	%		15,089		32	%		14,492		31	%		13,537		30	%
Mortgage-backed		12,362		25	%		12,074		25	%		11,926		25	%		11,406		25	%		11,311		25	%
Municipal		2,449		5	%		2,207		4	%		2,148		5	%		2,091		5	%		2,300		5	%
Non-U.S.		12,199		25	%		12,330		25	%		11,225		24	%		11,291		25	%		11,172		25	%
Short-term investments		1,983		4	%		1,857		4	%		2,097		4	%		2,052		4	%		1,667		4	%

Total	$	48,983		100	%	$	49,064		100	%	$	46,990		100	%	$	46,049		100	%	$	44,753		100	%


Note: Insured municipal bonds represent $741 million, or 30% of our municipal bond holdings.

Credit Quality by Market Value
AAA	$	23,718		48	%	$	24,145		49	%	$	23,807		51	%	$	23,472		51	%	$	22,884		51	%
AA		4,714		10	%		4,367		9	%		4,158		9	%		4,003		9	%		4,021		9	%
A		8,482		17	%		8,594		17	%		7,884		17	%		7,635		17	%		7,461		17	%
BBB		5,487		11	%		5,647		11	%		5,231		11	%		5,024		11	%		4,910		11	%
BB		3,357		7	%		3,213		7	%		2,987		6	%		3,009		6	%		2,866		6	%
B		2,393		5	%		2,362		5	%		2,175		5	%		2,187		5	%		2,029		5	%
Other		832		2	%		736		2	%		748		1	%		719		1	%		582		1	%

Total	$	48,983		100	%	$	49,064		100	%	$	46,990		100	%	$	46,049		100	%	$	44,753		100	%

Cost/Amortized Cost
Fixed maturities available for sale	$	36,542				$	39,089				$	40,204				$	39,603				$	38,985
Fixed maturities held to maturity		9,501					5,977					3,222					3,335					3,481
Short-term investments		1,983					1,857					2,097					2,052					1,667

Subtotal		48,026					46,923					45,523					44,990					44,133
Equity securities		666					387					200					271					398
Other investments		1,511					1,449					1,308					1,332					1,258

Total	$	50,203				$	48,759				$	47,031				$	46,593				$	45,789


Avg. duration of fixed maturities		3.7 years					3.6 years					3.6 years					3.7 years					3.7 years
Avg. market yield of fixed maturities ⁽¹⁾		3.6	%				3.2	%				3.7	%				4.0	%				4.3	%
Avg. credit quality		AA					AA					AA					AA					AA
Avg. yield on invested assets⁽²⁾		4.3	%				4.3	%				4.4	%				4.4	%				4.5	%

⁽¹⁾	Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.

⁽²⁾	Net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.


Investments		Page 15


		ACE Limited
		Investment Portfolio - 2
		(in millions of U.S. dollars)
		(Unaudited)

Mortgage-backed Fixed Income Portfolio

Market Value at December 31, 2010


	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Mortgage-backed securities
Residential mortgage-backed (RMBS)
GNMA	$	686	$	—	$	—	$	—	$	—	$	686
FNMA		6,427		—		—		—		—		6,427
Freddie Mac		2,587		—		—		—		—		2,587

Total agency RMBS		9,700		—		—		—		—		9,700
Non-agency RMBS		337		20		21		48		812		1,238

Total residential mortgage-backed		10,037		20		21		48		812		10,938
Commercial mortgage-backed		1,386		21		14		3		—		1,424

Total mortgage-backed securities	$	11,423	$	41	$	35	$	51	$	812	$	12,362

Mortgage-backed securities total $12.4 billion, are rated predominantly AAA and comprise 25% of the fixed income portfolio. This compares to a 35% mortgage-backed weighting in representative indices of the U.S. fixed income market. The minimum rating for initial purchases of mortgage-backed securities is AAA.

Securities issued by Federal agencies with implied or explicit government guarantees total $9.7 billion and represent 89% of the residential mortgage-backed portfolio.

Non-agency residential mortgage-backed securities are backed by prime collateral, and broadly diversified in over 220,000 loans. The portfolio’s loan-to-value ratio is approximately 70% with an average FICO score of 730. With this conservative loan-to-value ratio and subordinated collateral of 12%, the cumulative 5-year foreclosure rate would have to rise to 18% and real estate values would have to fall 19% from their current levels before principal is impaired. The current foreclosure rate of ACE's non-agency RMBS portfolio is 9%.

Commercial mortgage-backed securities of $1.4 billion are rated predominantly AAA, broadly diversified with over 17,000 loans and seasoned with 79% of the portfolio issued before 2006. The average loan-to-value ratio is approximately 68% with a debt service coverage ratio in excess of 1.7 and weighted average subordinated collateral of 33%. The cumulative foreclosure rate would have to rise to 41% and commercial real estate values would have to fall more than 5% from their current levels before principal is impaired. The current foreclosure rate of the portfolio is about 2.6%.


Investments 2		Page 16


		ACE Limited
		Investment Portfolio - 3
		(in millions of U.S. dollars)
		(Unaudited)

Mortgage-backed Fixed Income Portfolio

Amortized Cost at December 31, 2010


	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Mortgage-backed securities
Residential mortgage-backed (RMBS)
GNMA	$	668	$	—	$	—	$	—	$	—	$	668
FNMA		6,346		—		—		—		—		6,346
Freddie Mac		2,550		—		—		—		—		2,550

Total agency RMBS		9,564		—		—		—		—		9,564
Non-agency RMBS		351		23		23		55		947		1,399

Total residential mortgage-backed		9,915		23		23		55		947		10,963
Commercial mortgage-backed		1,320		20		13		3		—		1,356

Total mortgage-backed securities	$	11,235	$	43	$	36	$	58	$	947	$	12,319


Investments 3		Page 17


		ACE Limited
		Investment Portfolio - 4
		(in millions of U.S. dollars)
		(Unaudited)

U.S. Investment Grade Corporate and Asset-backed Fixed Income Portfolio


	S&P Credit Rating
Market Value at December 31, 2010	AAA		AA		A		BBB		Total

Asset-backed	$	221	$	2	$	13	$	6	$	242
Banks		615		265		2,116		199		3,195
Basic Materials		—		—		61		166		227
Communications		—		—		636		642		1,278
Consumer, Cyclical		—		81		202		201		484
Consumer, Non-Cyclical		54		486		392		572		1,504
Diversified Financial Services		43		56		146		221		466
Energy		79		14		209		514		816
Industrial		95		379		303		166		943
Utilities		—		1		386		529		916
All Others		115		68		397		320		900

Total	$	1,222	$	1,352	$	4,861	$	3,536	$	10,971

U.S. Investment Grade Corporate Fixed Income Portfolio

The average credit quality of ACE’s US investment grade bond portfolio is high at A.

ACE prohibits investments in complex structured securities (e.g. CDOs, CLOs) and over-the-counter derivatives and does not permit the use of portfolio leverage.

Corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA 2%, A 1%, BBB 0.5% of total portfolio) and are monitored on a daily basis by ACE via an internal compliance system.


Investments 4		Page 18


		ACE Limited
		Investment Portfolio - 5
		(in millions of U.S. dollars)
		(Unaudited)

Below Investment Grade Corporate and Asset-backed Fixed Income Portfolio

Market Value at December 31, 2010


	S&P Credit Rating
	BB		B		CCC		Other		Total

Asset-backed	$	7	$	16	$	7	$	2	$	32
Basic Materials		199		142		16		—		357
Communications		433		396		13		—		842
Consumer, Cyclical		334		270		28		2		634
Consumer, Non-Cyclical		547		396		6		—		949
Diversified Financial Services		68		67		3		17		155
Energy		643		201		4		—		848
Industrial		311		204		16		—		531
Utilities		218		107		—		—		325
All Others		141		109		6		—		256

Total	$	2,901	$	1,908	$	99	$	21	$	4,929

Below Investment Grade Corporate Fixed Income Portfolio

ACE manages high yield bonds as a distinct and separate asset class from investment grade bonds. ACE’s allocation to high yield bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B). Our minimum rating for initial purchase is BB/B.

Six external investment managers are responsible for high yield security selection and portfolio construction.

ACE’s high yield managers have a conservative approach to credit selection and very low historical default experience.

Securities holdings are highly diversified across industries and are subject to a 1.5% issuer limit as a percentage of high yield allocation. The portfolio comprises over 650 issuers with our largest current issuer exposure at $72 million. ACE monitors position limits on a daily basis through an internal compliance system.

Derivative and structured securities (e.g. credit default swaps, CLOs) are not permitted in high yield portfolios.


Investments 5		Page 19


		ACE Limited
		Investment Portfolio - 6
		(in millions of U.S. dollars)
		(Unaudited)

Non-U.S. Fixed Income Portfolio

Market Value at December 31, 2010


	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total

United Kingdom	$	972	$	—	$	—	$	—	$	—	$	972
Canada		886		—		—		—		—		886
Germany		404		—		—		—		—		404
Japan		—		379		—		—		—		379
France		193		—		—		—		—		193
Province of Ontario		—		192		—		—		—		192
Province of Quebec		—		—		147		—		—		147
Switzerland		142		—		—		—		—		142
Brazil		—		—		—		139		—		139
State of Queensland		69		40		—		—		—		109
Republic of Korea		—		—		102		—		—		102
Thailand		3		—		72		13		—		88
United Mexican States		—		—		27		59		—		86
Australia		72		—		—		—		—		72
Taiwan		7		58		—		—		—		65
State of New South Wales		62		—		—		—		—		62
New Zealand		58		—		—		—		—		58
State of Victoria		52		—		—		—		—		52
People’s Republic of China		15		33		—		—		—		48
Austria		46		—		—		—		—		46
Malaysia		3		—		36		—		2		41
Egypt		24		—		—		—		13		37
State of Western Australia		36		—		—		—		—		36
Qatar		—		35		—		—		—		35
Province of British Columbia		33		—		—		—		—		33
Other Non-U.S. Government		142		141		50		31		33		397

Non-U.S. Government Securities	$	3,219	$	878	$	434	$	242	$	48	$	4,821
Non-U.S. Corporate		1,615		1,054		2,468		1,474		767		7,378

	$	4,834	$	1,932	$	2,902	$	1,716	$	815	$	12,199

Non-U.S. Fixed Income Portfolio

ACE’s non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of ACE’s non-U.S. operations. 85% of ACE’s non-U.S. fixed income is denominated in G7 currencies.

Average credit quality of non-U.S. fixed income securities is very high at AA and 53% of holdings are rated AAA or guaranteed by governments or quasi-government agencies.


Investments 6		Page 20


		ACE Limited
		Investment Portfolio - 7
		(in millions of U.S. dollars)
		(Unaudited)

Investment portfolio

Top 25 Exposures - Fixed Maturity Investments


December 31, 2010					Rating
	1	General Electric Co	$	468		AA+
	2	JP Morgan Chase & Co		451		A+
	3	Bank of America Corp		409		A
	4	Citigroup Inc		330		A
	5	Goldman Sachs Group Inc/The		305		A
	6	Wells Fargo & Co		297		AA-
	7	Verizon Communications Inc		296		A-
	8	Morgan Stanley		285		A
	9	AT&T INC		240		A-
	10	HSBC Holdings Plc		234		AA-
	11	Credit Suisse Group		195		A
	12	Barclays PLC		181		A+
	13	Kraft Foods Inc		162		BBB
	14	Comcast Corp		153		BBB+
	15	Royal Bank of Scotland Group Plc		151		A
	16	Lloyds Banking Group Plc		147		A
	17	American Express Co		135		BBB+
	18	Time Warner Cable Inc		128		BBB
	19	ConocoPhillips		125		A
	20	UBS AG		116		A+
	21	Pfizer Inc		111		AA
	22	Anheuser-Busch InBev NV		105		BBB+
	23	Dominion Resources Inc/VA		104		A-
	24	BP PLC		99		A
	25	Banco Santander SA		95		AA


Investments 7		Page 21


		ACE Limited
		Net Realized and Unrealized Gains (Losses)
		(in millions of U.S. dollars)
		(Unaudited)


	Three months ended December 31, 2010									Year ended December 31, 2010
	Net Realized Gains (Losses) ⁽¹⁾			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) ⁽¹⁾			Net Unrealized Gains (Losses)			Net Impact
Fixed maturities	$	109		$	(653	)	$	(544	)	$	380		$	973		$	1,353
Equity securities		—			(3	)		(3	)		84			(44	)		40
Equity and fixed income derivatives		35			—			35			58			—			58
Foreign exchange gains (losses)		(44	)		—			(44	)		(54	)		—			(54	)
Other ⁽²⁾		177			(122	)		55			161			(30	)		131

Sub-total		277			(778	)		(501	)		629			899			1,528
Mark-to-market gains (losses) from derivative transactions ⁽³⁾		28			—			28			(197	)		—			(197	)

Total gains (losses)		305			(778	)		(473	)		432			899			1,331
Partially-owned entities ⁽⁴⁾		17			(5	)		12			69			(5	)		64
Income tax expense (benefit)		23			(214	)		(191	)		50			152			202

Net gains (losses)	$	299		$	(569	)	$	(270	)	$	451		$	742		$	1,193

(1)	Other-than-temporary impairments for the quarter include $4 million for fixed maturities. Year to date other-than-temporary impairments of $59 million include $46 million for fixed maturities and $13 million for other investments.

(2)	The quarter includes $175 million of non-taxable realized gain which includes the reversal of a previously recorded unrealized gain of $131 million which relates to the acquisition of Rain & Hail. This resulted in a tax benefit of $46 million.

(3)

The quarter includes $28 million of realized gains on the life reinsurance operations which is comprised of a $152 million gain on guaranteed living benefit derivatives and $124 million of losses on other derivatives, including S&P put options and futures. The full year includes $178 million of realized losses on the life reinsurance operations which is comprised of a $28 million loss on guaranteed living benefit derivatives and $150 million of losses on other derivatives, including S&P put options and futures.

(4)	Net realized and unrealized gains (losses) on partially-owned entities that meet the requirements for equity accounting. The net income or loss is included in other income (expense).


	Three months ended December 31, 2009									Year ended December 31, 2009
	Net Realized Gains (Losses)⁽⁵⁾			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) ⁽⁵⁾			Net Unrealized Gains (Losses) ⁽⁶⁾		Net Impact
Fixed maturities	$	79		$	(19	)	$	60		$	(41	)	$	2,717	$	2,676
Equity securities		35			15			50			(145	)		213		68
Equity and fixed income derivatives		6			—			6			68			—		68
Foreign exchange gains (losses)		10			—			10			(21	)		—		(21	)
Other		164			(122	)		42			31			138		169

Sub-total		294			(126	)		168			(108	)		3,068		2,960
Mark-to-market gains (losses) from derivative transactions ⁽⁷⁾		79			—			79			(88	)		—		(88	)

Total gains (losses)		373			(126	)		247			(196	)		3,068		2,872
Partially-owned entities ⁽⁸⁾		(31	)		15			(16	)		(63	)		24		(39	)
Income tax expense (benefit)		72			(74	)		(2	)		(49	)		481		432

Net gains (losses)	$	270		$	(37	)	$	233		$	(210	)	$	2,611	$	2,401

(5)

Other-than-temporary impairments for the quarter of $33 million include $17 million for fixed maturities and $16 million for other investments. Other-than-temporary impairments for the year of $397 million include $234 million for fixed maturities, $26 million for equities and $137 million for other investments.

(6)	Excludes $242 million of change in unrealized losses, net of tax of $63 million, related to the adoption of certain provisions that amended GAAP relating to other-than-temporary impairments.

(7)

The quarter includes $87 million of realized gains on the life reinsurance operations which is comprised of a $150 million gain on guaranteed living benefit derivatives and $63 million of losses on other derivatives, including S&P put options and futures. The full year includes $5 million of realized gains on the life reinsurance operations which is comprised of a $368 million gain on guaranteed living benefit derivatives offset by $363 million of losses on other derivatives, including S&P put options and futures.

(8)	Net realized and unrealized gains (losses) on partially-owned entities that meet the requirements for equity accounting. The net income or loss is included in other income (expense).


Investment Gains (Losses)		Page 22

ACE Limited

Capital Structure

(in millions of U.S. dollars)

(Unaudited)


	December 31 2010			September 30 2010			June 30 2010			March 31 2010			December 31 2009			December 31 2008

Total short-term debt	$	1,300		$	155		$	147		$	150		$	161		$	471
Total long-term debt		3,358			3,158			3,158			3,158			3,158			2,806

Total debt	$	4,658		$	3,313		$	3,305		$	3,308		$	3,319		$	3,277


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


Total shareholders’ equity	$	22,974		$	22,845		$	21,410		$	20,636		$	19,667		$	14,446


Total capitalization	$	27,941		$	26,467		$	25,024		$	24,253		$	23,295		$	18,032
Tangible capital ⁽¹⁾	$	23,265		$	22,561		$	21,188		$	20,370		$	19,364		$	14,285

Leverage ratios
Debt/ total capitalization		16.7	%		12.5	%		13.2	%		13.6	%		14.2	%		18.2	%
Debt plus trust preferred securities/ total capitalization		17.8	%		13.7	%		14.4	%		14.9	%		15.6	%		19.9	%
Debt/ tangible capital		20.0	%		14.7	%		15.6	%		16.2	%		17.1	%		22.9	%

Debt plus trust preferred securities/ tangible capital		21.3	%		16.1	%		17.1	%		17.8	%		18.7	%		25.1	%

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


Capital Structure		Page 23

ACE Limited

Debt, Trust Preferred, and Credit Facilities

(in millions of U.S. dollars)

(Unaudited)

December 31, 2010


	Par Amount Outstanding		Carrying value		Coupon			Maturity Date
Debt and Trust Preferred
Credit Facility Borrowing	$	150	$	150		0.51	%	January 13, 2011
Credit Facility Borrowing	$	150	$	150		0.51	%	January 18, 2011
Repurchase Agreements	$	450	$	450		0.34	%	March 8, 2011
Repurchase Agreements	$	550	$	550		0.29	%	March 9, 2011
ACE INA Holdings Inc. Senior Notes	$	500	$	500		5.88	%	June 15, 2014
ACE INA Holdings Inc. Senior Notes	$	450	$	447		5.60	%	May 15, 2015
ACE INA Holdings Inc. Senior Notes	$	700	$	699		2.60	%	November 23, 2015
ACE INA Holdings Inc. Senior Notes	$	500	$	500		5.70	%	February 15, 2017
ACE INA Holdings Inc. Senior Notes	$	300	$	300		5.80	%	March 15, 2018
ACE INA Holdings Inc. Senior Notes	$	500	$	500		5.90	%	June 15, 2019
ACE INA Holdings Inc. Debentures	$	100	$	100		8.88	%	August 15, 2029
ACE Capital Trust II Preferred Securities	$	309	$	309		9.70	%	April 1, 2030
ACE INA Holdings Inc. Senior Notes	$	300	$	299		6.70	%	May 15, 2036
Other	$	13	$	13

	$	4,972	$	4,967


	Commitment		Usage					Maturity Date
Credit Facilities
Syndicated Letter of Credit Facility	$	1,000	$	574				November 8, 2012
Revolving Credit / LOC Facility	$	500	$	370				November 8, 2012
Bilateral Letter of Credit Facility	$	500	$	500				September 20, 2014
Funds at Lloyds Capital Facilities	$	400	$	340				December 31, 2015

	$	2,400	$	1,784


Capital Structure 2		Page 24

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 December 31						Years ended December 31
	2010			2009			2010			2009
Numerator
Income to common shares, excl. net realized gains (losses) ⁽¹⁾	$	702		$	683			2,657			2,759
Net realized gains (losses), net of income tax		299			270			451			(210	)

Net income available to the holders of common shares	$	1,001		$	953		$	3,108		$	2,549


Rollforward of Common Shares Outstanding
Shares - beginning of period		339,229,422			336,280,476			336,524,657			333,645,471
Repurchase of shares		(4,926,082	)		—			(4,926,082	)		—
Issued under employee stock purchase plan		—			(176	)		240,979			259,219
Shares (cancelled) granted		102,761			24,680			1,774,583			2,082,411
Issued for option exercises		536,751			219,677			1,328,715			537,556

Shares - end of period		334,942,852			336,524,657			334,942,852			336,524,657


Denominator
Weighted average shares outstanding		340,150,218			337,432,132			339,685,143			336,725,625
Effect of other dilutive securities		2,405,219			1,523,034			1,561,244			813,669

Adj. wtd. avg. shares outstanding and assumed conversions		342,555,437			338,955,166			341,246,387			337,539,294


Basic earnings per share
Income excluding net realized gains (losses) ⁽¹⁾	$	2.06		$	2.02		$	7.82		$	8.19
Net realized gains (losses), net of income tax		0.88			0.80			1.33			(0.62	)

Net income	$	2.94		$	2.82		$	9.15		$	7.57


Diluted earnings per share
Income excluding net realized gains (losses) ⁽¹⁾	$	2.05		$	2.01		$	7.79		$	8.17
Net realized gains (losses), net of income tax		0.87			0.80			1.32			(0.62	)

Net income	$	2.92		$	2.81		$	9.11		$	7.55

(1)	See Non-GAAP Financial Measures.


Earnings per share		Page 25

ACE Limited

Non-GAAP Financial Measures

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures

In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations. However, they should not be viewed as a substitute for measures determined in accordance with generally accepted accounting principles (GAAP). A reconciliation of book value per common share is provided on the next page.

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).

The following non-GAAP measure is a common performance measurement and is defined as income excluding net realized gains (losses) and the related tax expense (benefit). We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) 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. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with GAAP.


	4Q-10		3Q-10			2Q-10		1Q-10		4Q-09			Full Year 2010		Full Year 2009

Net income, as reported	$	1,001	$	675		$	677	$	755	$	953		$	3,108	$	2,549
Net realized gains (losses)		305		(50	)		9		168		373			432		(196	)
Net realized gains (losses) in other income (expense) ⁽¹⁾		17		39			3		10		(31	)		69		(63	)
Income tax expense (benefit) on net realized gains (losses)		23		2			23		2		72			50		(49	)

Income excluding net realized gains (losses)	$	702	$	688		$	688	$	579	$	683		$	2,657	$	2,759

(1)	Realized gains (losses) on partially-owned entities that meet the requirements for equity accounting. The net income or loss is included in other income (expense).


Reconciliation Non-GAAP		Page 26

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


	December 31 2010			September 30 2010			June 30 2010			March 31 2010			December 31 2009

Shareholders’ equity	$	22,974		$	22,845		$	21,410		$	20,636		$	19,667
Less: goodwill and other intangible assets		4,676			3,906			3,836			3,883			3,931

Numerator for tangible book value per share	$	18,298		$	18,939		$	17,574		$	16,753		$	15,736


Denominator		334,942,852			339,229,422			338,755,604			338,610,718			336,524,657


Book value per common share	$	68.59		$	67.34		$	63.20		$	60.94		$	58.44
Tangible book value per common share	$	54.63		$	55.83		$	51.88		$	49.48		$	46.76

Reconciliation of Book Value

Shareholders’ equity, beginning of quarter	$	22,845		$	21,410		$	20,636		$	19,667		$	18,733
Income excluding net realized gains (losses)		702			688			688			579			683
Net realized gains (losses), net of tax		299			(13	)		(11	)		176			270
Net unrealized gains (losses), net of tax		(569	)		680			282			349			(37	)
Repurchase of shares		(303	)		—			—			—			—
Dividend declared on common shares		(113	)		(112	)		(113	)		(105	)		(105	)
Cumulative translation, net of tax		47			140			(115	)		(50	)		97
Pension liability		6			(4	)		1			4			(22	)
Other⁽¹⁾		60			56			42			16			48

	$	22,974		$	22,845		$	21,410		$	20,636		$	19,667

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


Reconciliation Book Value		Page 27

ACE Limited

Comprehensive Income

(in millions of U.S. dollars)

(Unaudited)


Consolidated Statement of Comprehensive Income	4Q-10			3Q-10			2Q-10			1Q-10			4Q-09			Full Year 2010			Full Year 2009

Net income	$	1,001		$	675		$	677		$	755		$	953		$	3,108		$	2,549


Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments ⁽¹⁾		(497	)		953			487			583			201			1,526			2,712
Reclassification adjustment for net realized (gains) losses included in net income		(286	)		(120	)		(97	)		(129	)		(312	)		(632	)		75
Change in cumulative translation adjustments		66			186			(169	)		(90	)		141			(7	)		568
Change in minimum pension liability		9			(6	)		2			6			(35	)		11			(48	)
Income tax (expense) benefit related to other comprehensive income items ⁽²⁾		192			(197	)		(55	)		(67	)		43			(127	)		(568	)

Other comprehensive income		(516	)		816			168			303			38			771			2,739


Comprehensive income	$	485		$	1,491		$	845		$	1,058		$	991		$	3,879		$	5,288

(1)	Unrealized appreciation on investments for the full year 2009 includes $305 million of losses related to the adoption of certain provisions that amended GAAP relating to other-than-temporary impairments.

(2)	Income tax expense for the full year 2009 includes $63 million related to the adoption of certain provisions that amended GAAP relating to other-than-temporary impairments.


Comprehensive Income		Page 28

ACE Limited

Glossary

Annualized return on ordinary shareholders’ equity (ROE): Income excluding net realized gains (losses) divided by average shareholders’ equity for the period excluding unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity. To annualize a quarterly rate multiply by four.

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

Combined Insurance: Combined Insurance Company of America, acquired April 1, 2008.

Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding life business. Calculated on a GAAP basis.

Effective tax rate: Income tax expense divided by the sum of income tax expense and income excluding net realized gains (losses).

G7: A group of seven industrialized nations including Canada, France, Germany, Italy, Japan, United Kingdom, and the United States.

Life underwriting income: Net premiums earned and net investment income less policy benefits, acquisition costs, and administrative expenses.

NM: Not meaningful.

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

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

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


Glossary		Page 29

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