ACE Off CreditWatch, S&P Affirms Most Operating Units as ‘A-‘

Standard & Poor’s removed ACE Limited and its operating units from CreditWatch and affirmed single-‘A’-minus ratings for most of them following its review of the Group’s finances after it reported net loss exposure to the WTC attacks of $558 million.

“Subsequently, ACE disclosed a thorough ground-up analysis of its loss estimate, which alleviated some of Standard & Poor’s concerns about the group’s capital adequacy and prospective operating performance. In addition, ACE successfully raised aggregate net proceeds of $1.1 billion in common equity via a secondary offering,” said the announcement.

S&P cited ACE’s “very strong capital adequacy,” in excess of 166 percent, its “strong diversified earnings,” its “strong market position,” especially after its acquisition of Cigna as positive factors. It warned, however that the company was exposed to”large loss activity,” and that uncertainty surrounded the run-off of certain books of business acquired from Cigna.. S&P added that there was still some uncertainty on loss estimates from the WTC disaster as well.

It concluded that “ACE is well positioned to capitalize on rate increases and the need for capacity come January 1, 2002, renewals. However, uncertainty remains concerning the WTC loss development and earnings improvements within certain business segments.”|”ace, off, creditwatch,, snp, affirms, most, operating, units, ‘a-‘