10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from             to             

Commission File No. 1-11778

ACE LIMITED

(Exact name of registrant as specified in its charter)

Switzerland	98-0091805
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Baerengasse 32

Zurich, Switzerland CH-8001

(Address of principal executive offices) (Zip Code)

+41 (0)43 456 76 00

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES þ                                              NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES þ                                                 NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ		Accelerated filer ¨
Non-accelerated filer  ¨	(Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨                                                NO  þ

The number of registrant’s Common Shares (CHF 26.01 par value) outstanding as of July 16, 2014 was335,698,995.

ACE LIMITED

INDEX TO FORM 10-Q

			Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Balance Sheets (Unaudited) June 30, 2014 and December 31, 2013		3
	Consolidated Statements of Operations and Comprehensive Income (Unaudited) Three and Six Months Ended June 30, 2014 and 2013		4
	Consolidated Statements of Shareholders’ Equity (Unaudited) Six Months Ended June 30, 2014 and 2013		5
	Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2014 and 2013		6
	Notes to Consolidated Financial Statements (Unaudited)
	Note 1.	General	7
	Note 2.	Acquisitions	7
	Note 3.	Investments	8
	Note 4.	Fair value measurements	13
	Note 5.	Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts	23
	Note 6.	Debt	24
	Note 7.	Commitments, contingencies, and guarantees	25
	Note 8.	Shareholders’ equity	29
	Note 9.	Share-based compensation	29
	Note 10.	Segment information	30
	Note 11.	Earnings per share	34
	Note 12.	Information provided in connection with outstanding debt of subsidiaries	34
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		79
Item 4.	Controls and Procedures		82
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings		82
Item 1A.	Risk Factors		82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities		82
Item 6.	Exhibits		82

2

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

CONSOLIDATED BALANCE SHEETS (Unaudited)

ACE Limited and Subsidiaries

	June 30			December 31
(in millions of U.S. dollars, except share and per share data)	2014			2013
Assets
Investments
Fixed maturities available for sale, at fair value (amortized cost – $49,719 and $48,406)	$	51,601		$	49,254
(includes hybrid financial instruments of $305 and $302)
Fixed maturities held to maturity, at amortized cost (fair value – $6,015 and $6,263)	5,774			6,098
Equity securities, at fair value (cost – $874 and $841)	907			837
Short-term investments, at fair value and amortized cost	2,108			1,763
Other investments (cost – $2,876 and $2,671)	3,230			2,976
Total investments	63,620			60,928
Cash	594			579
Securities lending collateral	1,440			1,632
Accrued investment income	556			556
Insurance and reinsurance balances receivable	5,316			5,026
Reinsurance recoverable on losses and loss expenses	10,768			11,227
Reinsurance recoverable on policy benefits	234			218
Deferred policy acquisition costs	2,562			2,313
Value of business acquired	514			536
Goodwill and other intangible assets	5,522			5,404
Prepaid reinsurance premiums	1,867			1,675
Deferred tax assets	234			616
Investments in partially-owned insurance companies	470			470
Other assets	3,750			3,330
Total assets	$	97,447		$	94,510
Liabilities
Unpaid losses and loss expenses	$	37,177		$	37,443
Unearned premiums	8,296			7,539
Future policy benefits	4,778			4,615
Insurance and reinsurance balances payable	3,794			3,628
Securities lending payable	1,441			1,633
Accounts payable, accrued expenses, and other liabilities	5,419			4,810
Short-term debt	1,851			1,901
Long-term debt	4,057			3,807
Trust preferred securities	309			309
Total liabilities	67,122			65,685
Commitments and contingencies
Shareholders’ equity
Common Shares (CHF 26.01 and CHF 27.04 par value; 342,832,412 shares issued; 336,225,589 and 339,793,935 shares outstanding)	8,501			8,899
Common Shares in treasury (6,606,823 and 3,038,477 shares)	(630		)	(255		)
Additional paid-in capital	5,055			5,238
Retained earnings	15,304			13,791
Accumulated other comprehensive income (AOCI)	2,095			1,152
Total shareholders’ equity	30,325			28,825
Total liabilities and shareholders’ equity	$	97,447		$	94,510

See accompanying notes to the consolidated financial statements

3

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

ACE Limited and Subsidiaries

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars, except per share data)	2014			2013			2014			2013
Revenues
Net premiums written	$	4,559		$	4,391		$	8,744		$	8,189
Increase in unearned premiums	(227		)	(324		)	(442		)	(549		)
Net premiums earned	4,332			4,067			8,302			7,640
Net investment income	556			534			1,109			1,065
Net realized gains (losses):
Other-than-temporary impairment (OTTI) losses gross	(13		)	(7		)	(25		)	(10		)
Portion of OTTI losses recognized in other comprehensive income (OCI)	1			—			2			—
Net OTTI losses recognized in income	(12		)	(7		)	(23		)	(10		)
Net realized gains (losses) excluding OTTI losses	(61		)	111			(154		)	320
Total net realized gains (losses) (includes $21, $38, $27, and $73 reclassified from AOCI)	(73		)	104			(177		)	310
Total revenues	4,815			4,705			9,234			9,015
Expenses
Losses and loss expenses	2,388			2,250			4,549			4,176
Policy benefits	144			110			258			241
Policy acquisition costs	758			665			1,486			1,279
Administrative expenses	566			564			1,101			1,078
Interest expense	72			73			143			133
Other (income) expense	(25		)	37			(42		)	27
Total expenses	3,903			3,699			7,495			6,934
Income before income tax	912			1,006			1,739			2,081
Income tax expense (includes $5, $7, $2, and $12 of reclassified unrealized gains)	133			115			226			237
Net income	$	779		$	891		$	1,513		$	1,844
Other comprehensive income (loss)
Unrealized appreciation (depreciation)	$	589		$	(1,470	)	$	1,108		$	(1,586	)
Reclassification adjustment for net realized gains included in net income	(21		)	(38		)	(27		)	(73		)
	568			(1,508		)	1,081			(1,659		)
Change in:
Cumulative translation adjustment	153			(175		)	120			(386		)
Pension liability	(5		)	(3		)	(13		)	19
Other comprehensive income (loss), before income tax	716			(1,686		)	1,188			(2,026		)
Income tax (expense) benefit related to OCI items	(147		)	296			(245		)	399
Other comprehensive income (loss)	569			(1,390		)	943			(1,627		)
Comprehensive income (loss)	$	1,348		$	(499	)	$	2,456		$	217
Earnings per share
Basic earnings per share	$	2.30		$	2.61		$	4.47		$	5.41
Diluted earnings per share	$	2.28		$	2.59		$	4.43		$	5.36

See accompanying notes to the consolidated financial statements

4

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

ACE Limited and Subsidiaries

	Six Months Ended
	June 30
(in millions of U.S. dollars)	2014			2013
Common Shares
Balance – beginning of period	$	8,899		$	9,591
Dividends declared on Common Shares – par value reduction	(398		)	(342		)
Balance – end of period	8,501			9,249
Common Shares in treasury
Balance – beginning of period	(255		)	(159		)
Common Shares repurchased	(569		)	(212		)
Net shares redeemed under employee share-based compensation plans	194			152
Balance – end of period	(630		)	(219		)
Additional paid-in capital
Balance – beginning of period	5,238			5,179
Net shares redeemed under employee share-based compensation plans	(169		)	(128		)
Exercise of stock options	(33		)	(28		)
Share-based compensation expense and other	100			105
Funding of dividends declared to Retained earnings	(81		)	—
Balance – end of period	5,055			5,128
Retained earnings
Balance – beginning of period	13,791			10,033
Net income	1,513			1,844
Funding of dividends declared from Additional paid-in capital	81			—
Dividends declared on Common Shares	(81		)	—
Balance – end of period	15,304			11,877
Accumulated other comprehensive income
Net unrealized appreciation on investments
Balance – beginning of period	1,174			2,633
Change in period, before reclassification from AOCI, net of income tax (expense) benefit of $(210) and $332	898			(1,254		)
Amounts reclassified from AOCI, net of income tax benefit of $2 and $12	(25		)	(61		)
Change in period, net of income tax (expense) benefit of $(208) and $344	873			(1,315		)
Balance – end of period	2,047			1,318
Cumulative translation adjustment
Balance – beginning of period	63			339
Change in period, net of income tax (expense) benefit of $(42) and $62	78			(324		)
Balance – end of period	141			15
Pension liability adjustment
Balance – beginning of period	(85		)	(85		)
Change in period, net of income tax (expense) benefit of $5 and $(7)	(8		)	12
Balance – end of period	(93		)	(73		)
Accumulated other comprehensive income	2,095			1,260
Total shareholders’ equity	$	30,325		$	27,295

See accompanying notes to the consolidated financial statements

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

ACE Limited and Subsidiaries

	Six Months Ended
	June 30
(in millions of U.S. dollars)	2014			2013
Cash flows from operating activities
Net income	$	1,513		$	1,844
Adjustments to reconcile net income to net cash flows from operating activities
Net realized (gains) losses	177			(310		)
Amortization of premiums/discounts on fixed maturities	115			134
Deferred income taxes	117			98
Unpaid losses and loss expenses	(493		)	(304		)
Unearned premiums	594			693
Future policy benefits	139			117
Insurance and reinsurance balances payable	142			182
Accounts payable, accrued expenses, and other liabilities	37			230
Income taxes payable	(56		)	20
Insurance and reinsurance balances receivable	(244		)	(611		)
Reinsurance recoverable on losses and loss expenses	546			538
Reinsurance recoverable on policy benefits	(14		)	2
Deferred policy acquisition costs	(228		)	(268		)
Prepaid reinsurance premiums	(171		)	(179		)
Other	(78		)	(378		)
Net cash flows from operating activities	2,096			1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	(7,960		)	(10,778		)
Purchases of to be announced mortgage-backed securities	—			(26		)
Purchases of fixed maturities held to maturity	(129		)	(299		)
Purchases of equity securities	(64		)	(194		)
Sales of fixed maturities available for sale	3,842			5,370
Sales of to be announced mortgage-backed securities	—			26
Sales of equity securities	45			62
Maturities and redemptions of fixed maturities available for sale	3,163			4,112
Maturities and redemptions of fixed maturities held to maturity	414			908
Net change in short-term investments	(295		)	(137		)
Net derivative instruments settlements	(185		)	(317		)
Acquisition of subsidiaries (net of cash acquired of $4 and $38)	(172		)	(977		)
Other	(118		)	(126		)
Net cash flows used for investing activities	(1,459		)	(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(428		)	(169		)
Common Shares repurchased	(557		)	(212		)
Proceeds from issuance of long-term debt	699			947
Proceeds from issuance of short-term debt	977			1,570
Repayment of long-term debt	(500		)	—
Repayment of short-term debt	(977		)	(1,570		)
Proceeds from share-based compensation plans, including windfall tax benefits	75			62
Other	86			30
Net cash flows (used for) from financing activities	(625		)	658
Effect of foreign currency rate changes on cash and cash equivalents	3			(26		)
Net increase in cash	15			64
Cash – beginning of period	579			615
Cash – end of period	$	594		$	679
Supplemental cash flow information
Taxes paid	$	148		$	88
Interest paid	$	134		$	117

See accompanying notes to the consolidated financial statements

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

ACE Limited and Subsidiaries

1. General

Basis of presentation

ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE Limited and its subsidiaries (collectively, ACE, we, us, or our), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions have been eliminated.

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2013 Form 10-K.

2. Acquisitions

Large Corporate P&C Insurance Business of Itaú Seguros, S.A. (Itaú Seguros)

On July 4, 2014, we announced that we reached a definitive agreement to acquire the large corporate property and casualty (P&C) insurance business of Itaú Seguros, Brazil's leading carrier for that business, for approximately $685 million, at current exchange rates. This transaction, which is subject to regulatory approval and other customary closing conditions, is expected to be completed in the first quarter of 2015.

The Siam Commercial Samaggi Insurance PCL (Samaggi)

We and our local partner acquired 60.86 percent of Samaggi, a general insurance company in Thailand, from Siam Commercial Bank on April 28, 2014, and subsequently acquired an additional 32.17 percent ownership, through a mandatory tender offer, which expired on June 17, 2014. The purchase price for 93.03 percent of the company was $176 million in cash. This acquisition expands our presence in Thailand and Southeast Asia.

The acquisition generated $46 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $80 million based on ACE’s preliminary purchase price allocation.  The other intangible assets primarily relate to a bancassurance agreement. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

ABA Seguros

On May 2, 2013, we acquired ABA Seguros, a property and casualty insurer in Mexico that provides automobile, homeowners, and small business coverages for approximately $690 million in cash.

The acquisition generated $285 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $140 million based on ACE’s purchase price allocation. The other intangible assets primarily relate to distribution channels. Amortization of other intangible assets is included in Other (income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

Fianzas Monterrey

On April 1, 2013, we acquired Fianzas Monterrey, a leading surety lines company in Mexico offering administrative performance bonds primarily to clients in the construction and industrial sectors, for approximately $293 million in cash. This acquisition greatly expanded our global franchise in the surety business and enhanced our existing commercial lines and personal accident insurance business in Mexico.

The acquisition generated $137 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $73 million, based on ACE's purchase price allocation. The other intangible assets primarily relate to customer lists. Amortization of other intangible assets is included in Other

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

(income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

3. Investments

a) Fixed maturities

June 30, 2014	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,806	$	80	$	(17	)	$	2,869	$	—
Foreign	15,084		563		(38		)	15,609		(1		)
Corporate securities	17,085		981		(36		)	18,030		(3		)
Mortgage-backed securities	11,185		308		(75		)	11,418		(10		)
States, municipalities, and political subdivisions	3,559		131		(15		)	3,675		—
	$	49,719	$	2,063	$	(181	)	$	51,601	$	(14	)
Held to maturity
U.S. Treasury and agency	$	779	$	18	$	(2	)	$	795	$	—
Foreign	809		44		—			853		—
Corporate securities	1,828		101		—			1,929		—
Mortgage-backed securities	1,187		54		—			1,241		—
States, municipalities, and political subdivisions	1,171		31		(5		)	1,197		—
	$	5,774	$	248	$	(7	)	$	6,015	$	—

December 31, 2013	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,946	$	62	$	(59	)	$	2,949	$	—
Foreign	14,336		377		(122		)	14,591		—
Corporate securities	16,825		777		(132		)	17,470		(6		)
Mortgage-backed securities	10,937		184		(227		)	10,894		(34		)
States, municipalities, and political subdivisions	3,362		65		(77		)	3,350		—
	$	48,406	$	1,465	$	(617	)	$	49,254	$	(40	)
Held to maturity
U.S. Treasury and agency	$	820	$	16	$	(4	)	$	832	$	—
Foreign	864		33		—			897		—
Corporate securities	1,922		83		—			2,005		—
Mortgage-backed securities	1,341		39		(1		)	1,379		—
States, municipalities, and political subdivisions	1,151		16		(17		)	1,150		—
	$	6,098	$	187	$	(22	)	$	6,263	$	—

As discussed in Note 3c), if a credit loss is indicated on an impaired fixed maturity, an OTTI is considered to have occurred and the portion of the impairment not related to credit losses (non-credit OTTI) is recognized in OCI. Included in the “OTTI Recognized in AOCI” columns above are the cumulative amounts of non-credit OTTI recognized in OCI adjusted for subsequent sales, maturities, and redemptions. OTTI recognized in AOCI does not include the impact of subsequent changes in fair value of the related securities. In periods subsequent to a recognition of OTTI in OCI, changes in the fair value of the related fixed

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

maturities are reflected in Unrealized appreciation (depreciation) in the consolidated statement of shareholders’ equity. For the three and six months endedJune 30, 2014, $1 million and $5 million, respectively, of net unrealized appreciation related to such securities is included in OCI. For the three and six months endedJune 30, 2013, $1 million and $25 million, respectively, of net unrealized appreciation related to such securities is included in OCI. At June 30, 2014 and December 31, 2013, AOCI includes cumulative net unrealized depreciation of $1 million and $4 million, respectively, related to securities remaining in the investment portfolio at those dates for which ACE has recognized a non-credit OTTI.

Mortgage-backed securities (MBS) issued by U.S. government agencies are combined with all other to be announced mortgage derivatives held (refer to Note 7 a) (iv)) and are included in the category, “Mortgage-backed securities”. Approximately 83 percent of the total mortgage-backed securities at June 30, 2014 and December 31, 2013 are represented by investments in U.S. government agency bonds. The remainder of the mortgage exposure consists of collateralized mortgage obligations and non-government mortgage-backed securities, the majority of which provide a planned structure for principal and interest payments and carry a rating of AAA by the major credit rating agencies.

The following table presents fixed maturities by contractual maturity:

			June 30				December 31
			2014				2013
(in millions of U.S. dollars)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Due in 1 year or less	$	2,513	$	2,537	$	2,387	$	2,411
Due after 1 year through 5 years	15,095		15,692		14,139		14,602
Due after 5 years through 10 years	15,917		16,575		16,200		16,535
Due after 10 years	5,009		5,379		4,743		4,812
	38,534		40,183		37,469		38,360
Mortgage-backed securities	11,185		11,418		10,937		10,894
	$	49,719	$	51,601	$	48,406	$	49,254
Held to maturity
Due in 1 year or less	$	483	$	489	$	401	$	405
Due after 1 year through 5 years	2,590		2,693		2,284		2,363
Due after 5 years through 10 years	1,157		1,206		1,686		1,723
Due after 10 years	357		386		386		393
	4,587		4,774		4,757		4,884
Mortgage-backed securities	1,187		1,241		1,341		1,379
	$	5,774	$	6,015	$	6,098	$	6,263

Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. 

b) Equity securities

	June 30			December 31
(in millions of U.S. dollars)	2014			2013
Cost	$	874		$	841
Gross unrealized appreciation	77			63
Gross unrealized depreciation	(44		)	(67		)
Fair value	$	907		$	837

c)Net realized gains (losses)

In accordance with guidance related to the recognition and presentation of OTTI, when an impairment related to a fixed maturity has occurred, OTTI is required to be recorded in Net income if management has the intent to sell the security or it is more likely

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

than not that we will be required to sell the security before the recovery of its amortized cost. Further, in cases where we do not intend to sell the security and it is more likely than not that we will not be required to sell the security, ACE must evaluate the security to determine the portion of the impairment, if any, related to credit losses. If a credit loss is indicated, an OTTI is considered to have occurred and any portion of the OTTI related to credit losses must be reflected in Net income while the portion of OTTI related to all other factors is recognized in OCI. For fixed maturities held to maturity, OTTI recognized in OCI is accreted from AOCI to the amortized cost of the fixed maturity prospectively over the remaining term of the securities.

Each quarter, securities in an unrealized loss position (impaired securities), including fixed maturities, securities lending collateral, equity securities, and other investments, are reviewed to identify impaired securities to be specifically evaluated for a potential OTTI.

For all non-fixed maturities, OTTI is evaluated based on the following:

• the amount of time a security has been in a loss position and the magnitude of the loss position;

• the period in which cost is expected to be recovered, if at all, based on various criteria including economic conditions and other issuer-specific developments; and

• ACE’s ability and intent to hold the security to the expected recovery period.

As a general rule, we also consider that equity securities in an unrealized loss position for twelve consecutive months are other than temporarily impaired. For mutual funds included in equity securities in our consolidated balance sheet, we employ analysis similar to fixed maturities, when applicable.

We review each fixed maturity in an unrealized loss position to assess whether the security is a candidate for credit loss. Specifically, we consider credit rating, market price, and issuer-specific financial information, among other factors, to assess the likelihood of collection of all principal and interest as contractually due. Securities for which we determine that credit loss is likely are subjected to further analysis to estimate the credit loss recognized in Net income, if any. In general, credit loss recognized in Net income equals the difference between the security’s amortized cost and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security. All significant assumptions used in determining credit losses are subject to change as market conditions evolve.

Projected cash flows for corporate securities (principally senior unsecured bonds) are driven primarily by assumptions regarding probability of default and also the timing and amount of recoveries associated with defaults. ACE developed projected cash flows for corporate securities using market observable data, issuer-specific information, and credit ratings. We use historical default data by Moody’s Investors Service (Moody’s) rating category to calculate a 1-in-100 year probability of default, which results in a default assumption in excess of the historical mean default rate. Consistent with management's approach, ACE assumed a 32 percent recovery rate (the par value of a defaulted security that will be recovered) across all rating categories rather than using Moody's historical mean recovery rate of 42 percent. We believe that use of a default assumption in excess of the historical mean is conservative in light of current market conditions.

For the three and six months endedJune 30, 2014, credit losses recognized in Net income for corporate securities were $6 million and $10 million, respectively. For the three and six months endedJune 30, 2013, credit losses recognized in Net income for corporate securities were $6 million and $7 million, respectively.

For mortgage-backed securities, credit impairment is assessed using a cash flow model that estimates the cash flows on the underlying mortgages, using the security-specific collateral and transaction structure. The model estimates cash flows from the underlying mortgage loans and distributes those cash flows to various tranches of securities, considering the transaction structure and any subordination and credit enhancements that exist in that structure. The cash flow model incorporates actual cash flows on the mortgage-backed securities through the current period and then projects the remaining cash flows using a number of assumptions, including default rates, prepayment rates, and loss severity rates (the par value of a defaulted security that will not be recovered) on foreclosed properties.

For the three and six months endedJune 30, 2014 and 2013, there were no credit losses recognized in Net income for mortgage-backed securities.

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ACE Limited and Subsidiaries

The following table presents the Net realized gains (losses) and the losses included in Net realized gains (losses) and OCI as a result of conditions which caused us to conclude the decline in fair value of certain investments was “other-than-temporary”: 

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Fixed maturities:
OTTI on fixed maturities, gross	$	(9	)	$	(6	)	$	(15	)	$	(7	)
OTTI on fixed maturities recognized in OCI (pre-tax)	1			—			2			—
OTTI on fixed maturities, net	(8		)	(6		)	(13		)	(7		)
Gross realized gains excluding OTTI	54			64			90			126
Gross realized losses excluding OTTI	(26		)	(27		)	(46		)	(52		)
Total fixed maturities	20			31			31			67
Equity securities:
OTTI on equity securities	(1		)	—			(7		)	(1		)
Gross realized gains excluding OTTI	2			8			4			10
Gross realized losses excluding OTTI	—			(1		)	(1		)	(3		)
Total equity securities	1			7			(4		)	6
OTTI on other investments	(3		)	(1		)	(3		)	(2		)
Foreign exchange gains (losses)	(14		)	(5		)	(23		)	71
Investment and embedded derivative instruments	(15		)	40			(40		)	58
Fair value adjustments on insurance derivative	2			101			(46		)	429
S&P put options and futures	(72		)	(68		)	(91		)	(318		)
Other derivative instruments	9			(1		)	7			(1		)
Other	(1		)	—			(8		)	—
Net realized gains (losses)	$	(73	)	$	104		$	(177	)	$	310

The following table presents a roll-forward of pre-tax credit losses related to fixed maturities for which a portion of OTTI was recognized in OCI:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Balance of credit losses related to securities still held – beginning of period	$	35		$	35		$	37		$	43
Additions where no OTTI was previously recorded	5			4			7			4
Additions where an OTTI was previously recorded	1			2			3			3
Reductions for securities sold during the period	(17		)	(1		)	(23		)	(10		)
Balance of credit losses related to securities still held – end of period	$	24		$	40		$	24		$	40

d) Gross unrealized loss

At June 30, 2014, there were 3,253 fixed maturities out of a total of 25,285 fixed maturities in an unrealized loss position. The largest single unrealized loss in the fixed maturities was $3 million. There were 52 equity securities out of a total of 186 equity securities in an unrealized loss position. The largest single unrealized loss in the equity securities was $42 million. Fixed maturities in an unrealized loss position at June 30, 2014, comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase. As of June 30, 2014, there was one mutual fund, classified as an equity security investment, that was in a continuous unrealized loss position for more than twelve months where an other-than-temporary loss was not recorded. The unrealized loss of $42 million was approximately 8 percent of the original cost of the related equity security. We believe the impairment was temporary based on the relative price decline of the security and our intent and ability to hold the investment to its anticipated recovery.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The following tables present, for all securities in an unrealized loss position (including securities on loan), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

	0 – 12 Months					Over 12 Months					Total
June 30, 2014	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	—	$	—		$	1,069	$	(19	)	$	1,069	$	(19	)
Foreign	1,274		(11		)	1,303		(27		)	2,577		(38		)
Corporate securities	1,118		(12		)	1,050		(24		)	2,168		(36		)
Mortgage-backed securities	486		(4		)	2,540		(71		)	3,026		(75		)
States, municipalities, and political subdivisions	366		(4		)	1,041		(16		)	1,407		(20		)
Total fixed maturities	3,244		(31		)	7,003		(157		)	10,247		(188		)
Equity securities	45		(2		)	462		(42		)	507		(44		)
Other investments	39		(1		)	—		—			39		(1		)
Total	$	3,328	$	(34	)	$	7,465	$	(199	)	$	10,793	$	(233	)

	0 – 12 Months					Over 12 Months					Total
December 31, 2013	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	1,794	$	(57	)	$	31	$	(6	)	$	1,825	$	(63	)
Foreign	4,621		(114		)	201		(8		)	4,822		(122		)
Corporate securities	3,836		(118		)	194		(14		)	4,030		(132		)
Mortgage-backed securities	5,248		(197		)	384		(31		)	5,632		(228		)
States, municipalities, and political subdivisions	2,164		(90		)	84		(4		)	2,248		(94		)
Total fixed maturities	17,663		(576		)	894		(63		)	18,557		(639		)
Equity securities	498		(67		)	—		—			498		(67		)
Other investments	67		(9		)	—		—			67		(9		)
Total	$	18,228	$	(652	)	$	894	$	(63	)	$	19,122	$	(715	)

e) Restricted assets

ACE is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance operations. These requirements are generally promulgated in the statutory regulations of the individual jurisdictions. The assets on deposit are available to settle insurance and reinsurance liabilities. ACE is also required to restrict assets pledged under repurchase agreements. We also use trust funds in certain large reinsurance transactions where the trust funds are set up for the benefit of the ceding companies and generally take the place of letter of credit (LOC) requirements. We also have investments in segregated portfolios primarily to provide collateral or guarantees for LOC and derivative transactions. Included in restricted assets at June 30, 2014 and December 31, 2013, are investments, primarily fixed maturities, totaling $15.7 billion and $16.3 billion, respectively, and cash of $84 million and $162 million, respectively.

The following table presents the components of restricted assets:

	June 30		December 31
(in millions of U.S. dollars)	2014		2013
Trust funds	$	10,554	$	11,315
Deposits with non-U.S. regulatory authorities	1,969		1,970
Assets pledged under repurchase agreements	1,451		1,435
Deposits with U.S. regulatory authorities	1,336		1,334
Other pledged assets	459		391
	$	15,769	$	16,445

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

4. Fair value measurements

a) Fair value hierarchy

Fair value of financial assets and financial liabilities is estimated based on the framework established in the fair value accounting guidance. The guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data.

The three levels of the hierarchy are as follows:

• Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as

interest rates and yield curves, quoted prices for similar assets and liabilities in active markets, and quoted prices for identical or similar assets and liabilities in markets that are not active; and

• Level 3 – Inputs that are unobservable and reflect management’s judgments about assumptions that market participants

would use in pricing an asset or liability.

We categorize financial instruments within the valuation hierarchy at the balance sheet date based upon the lowest level of inputs that are significant to the fair value measurement. Accordingly, transfers between levels within the valuation hierarchy occur when there are significant changes to the inputs, such as increases or decreases in market activity, changes to the availability of current prices, changes to the transparency to underlying inputs, and whether there are significant variances in quoted prices. Transfers in and/or out of any level are assumed to occur at the end of the period.

We use pricing services to obtain fair value measurements for the majority of our investment securities. Based on management’s understanding of the methodologies used, these pricing services only produce an estimate of fair value if there is observable market information that would allow them to make a fair value estimate. Based on our understanding of the market inputs used by the pricing services, all applicable investments have been valued in accordance with GAAP. We do not adjust prices obtained from pricing services. The following is a description of the valuation techniques and inputs used to determine fair values for financial instruments carried at fair value, as well as the general classification of such financial instruments pursuant to the valuation hierarchy.

Fixed maturities

We use pricing services to estimate fair value measurements for the majority of our fixed maturities. The pricing services use market quotations for fixed maturities that have quoted prices in active markets; such securities are classified within Level 1. For fixed maturities other than U.S. Treasury securities that generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Additional valuation factors that can be taken into account are nominal spreads, dollar basis, and liquidity adjustments. The pricing services evaluate each asset class based on relevant market and credit information, perceived market movements, and sector news. The market inputs used in the pricing evaluation, listed in the approximate order of priority include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. The extent of the use of each input is dependent on the asset class and the market conditions. Given the asset class, the priority of the use of inputs may change, or some market inputs may not be relevant. Additionally, fixed maturities valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing), which may increase the potential that an investment's estimated fair value is not reflective of the price at which an actual transaction would occur. The overwhelming majority of fixed maturities are classified within Level 2 because the most significant inputs used in the pricing techniques are observable. For a small number of fixed maturities, we obtain a quote from a broker (typically a market maker). Due to the disclaimers on the quotes that indicate that the price is indicative only, we include these fair value estimates in Level 3. 

Equity securities

Equity securities with active markets are classified within Level 1 as fair values are based on quoted market prices. For equity securities in markets which are less active, fair values are based on market valuations and are classified within Level 2. Equity securities for which pricing is unobservable are classified within Level 3.

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ACE Limited and Subsidiaries

Short-term investments

Short-term investments, which comprise securities due to mature within one year of the date of purchase that are traded in active markets, are classified within Level 1 as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their cost approximates fair value. Short-term investments for which pricing is unobservable are classified within Level 3.

Other investments

Fair values for the majority of Other investments including investments in partially-owned investment companies, investment funds, and limited partnerships are based on their respective net asset values or equivalent (NAV). The majority of these investments, for which NAV was used as a practical expedient to measure fair value, are classified within Level 3 because either ACE will never have the contractual option to redeem the investments or will not have the contractual option to redeem the investments in the near term. The remainder of such investments is classified within Level 2. Certain of our long-duration contracts are supported by assets that do not qualify for separate account reporting under GAAP. These assets comprise mutual funds classified within Level 1 in the valuation hierarchy on the same basis as other equity securities traded in active markets. Other investments also includes equity securities and fixed maturities held in rabbi trusts maintained by ACE for deferred compensation plans, which are classified within the valuation hierarchy on the same basis as other equity securities and fixed maturities.

Securities lending collateral

The underlying assets included in Securities lending collateral in the consolidated balance sheets are fixed maturities which are classified in the valuation hierarchy on the same basis as other fixed maturities. Excluded from the valuation hierarchy is the corresponding liability related to ACE’s obligation to return the collateral plus interest as it is reported at contract value and not fair value in the consolidated balance sheets.

Investment derivative instruments

Actively traded investment derivative instruments, including futures, options, and forward contracts are classified within Level 1 as fair values are based on quoted market prices. The fair value of cross-currency swaps are based on market valuations and are classified within Level 2. Investment derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Other derivative instruments

We maintain positions in other derivative instruments including exchange-traded equity futures contracts and option contracts designed to limit exposure to a severe equity market decline, which would cause an increase in expected claims and, therefore, reserves for our guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) reinsurance business. Our position in exchange-traded equity futures contracts is classified within Level 1. The fair value of the majority of the remaining positions in other derivative instruments is based on significant observable inputs including equity security and interest rate indices. Accordingly, these are classified within Level 2. Other derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Separate account assets

Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of certain guarantees made by ACE. Separate account assets comprise mutual funds classified in the valuation hierarchy on the same basis as other equity securities traded in active markets and are classified within Level 1. Separate account assets also include fixed maturities classified within Level 2 because the most significant inputs used in the pricing techniques are observable. Excluded from the valuation hierarchy are the corresponding liabilities as they are reported at contract value and not fair value in the consolidated balance sheets. Separate account assets are recorded in Other assets in the consolidated balance sheets.

Guaranteed living benefits

The GLB arises from life reinsurance programs covering living benefit guarantees whereby we assume the risk of guaranteed minimum income benefits (GMIB) and guaranteed minimum accumulation benefits (GMAB) associated with variable annuity contracts. GLB’s are recorded in Accounts payable, accrued expenses, and other liabilities and Future policy benefits in the consolidated balance sheets. For GLB reinsurance, ACE estimates fair value using an internal valuation model which includes current market information and estimates of policyholder behavior. All of the treaties contain claim limits, which are factored into the valuation model. The fair value depends on a number of inputs, including changes in interest rates, changes in equity

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ACE Limited and Subsidiaries

markets, credit risk, current account value, changes in market volatility, expected annuitization rates, changes in policyholder behavior, and changes in policyholder mortality.

The most significant policyholder behavior assumptions include lapse rates and the GMIB annuitization rates. Assumptions regarding lapse rates and GMIB annuitization rates differ by treaty, but the underlying methodologies to determine rates applied to each treaty are comparable. The assumptions regarding lapse and GMIB annuitization rates determined for each treaty are based on a dynamic calculation that uses several underlying factors.

A lapse rate is the percentage of in-force policies surrendered in a given calendar year. All else equal, as lapse rates increase, ultimate claim payments will decrease.

GMIB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed benefit provided under the GMIB. All else equal, as GMIB annuitization rates increase, ultimate claim payments will increase, subject to treaty claim limits.

The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data available from cedants. For treaties with limited experience, rates are established in line with data received from other ceding companies adjusted, as appropriate, with industry estimates. The model and related assumptions are continuously re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of more information, such as market conditions, market participant assumptions, and demographics of in-force annuities. During the three and six months endedJune 30, 2014, no material changes were made to actuarial or behavioral assumptions. We made minor technical refinements to the model with a favorable (unfavorable) net income impact of approximately $1 million and $(2) million for the three and six months endedJune 30, 2014, respectively. For detailed information on our lapse and annuitization rate assumptions, refer to Note 4 to the Consolidated Financial Statements of our 2013 Form 10-K.

We view the variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of a cumulative long-term economic net loss relatively small at the time of pricing. However, adverse changes in market factors and policyholder behavior will have an adverse impact on net income, which may be material. Because of the significant use of unobservable inputs including policyholder behavior, GLB reinsurance is classified within Level 3.

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ACE Limited and Subsidiaries

The following tables present, by valuation hierarchy, the financial instruments measured at fair value on a recurring basis:

June 30, 2014	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,677	$	1,192	$	—	$	2,869
Foreign	216		15,381		12		15,609
Corporate securities	—		17,826		204		18,030
Mortgage-backed securities	—		11,411		7		11,418
States, municipalities, and political subdivisions	—		3,675		—		3,675
	1,893		49,485		223		51,601
Equity securities	414		491		2		907
Short-term investments	1,069		1,039		—		2,108
Other investments	336		254		2,640		3,230
Securities lending collateral	—		1,440		—		1,440
Investment derivative instruments	9		—		—		9
Other derivative instruments	16		2		—		18
Separate account assets	1,349		88		—		1,437
Total assets measured at fair value	$	5,086	$	52,799	$	2,865	$	60,750
Liabilities:
Investment derivative instruments	$	10	$	—	$	—	$	10
Other derivative instruments	15		2		—		17
GLB(1)	—		—		241		241
Total liabilities measured at fair value	$	25	$	2	$	241	$	268

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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ACE Limited and Subsidiaries

December 31, 2013	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,626	$	1,323	$	—	$	2,949
Foreign	223		14,324		44		14,591
Corporate securities	—		17,304		166		17,470
Mortgage-backed securities	—		10,886		8		10,894
States, municipalities, and political subdivisions	—		3,350		—		3,350
	1,849		47,187		218		49,254
Equity securities	373		460		4		837
Short-term investments	953		803		7		1,763
Other investments	305		231		2,440		2,976
Securities lending collateral	—		1,632		—		1,632
Investment derivative instruments	19		—		—		19
Other derivative instruments	—		6		—		6
Separate account assets	1,145		81		—		1,226
Total assets measured at fair value	$	4,644	$	50,400	$	2,669	$	57,713
Liabilities:
Investment derivative instruments	$	6	$	—	$	—	$	6
Other derivative instruments	60		2		—		62
GLB(1)	—		—		193		193
Total liabilities measured at fair value	$	66	$	2	$	193	$	261

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

The following table presents transfers of financial instruments between Level 1 and Level 2:

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars)	2014		2013		2014		2013
Transfers from Level 1 to Level 2	$	—	$	6	$	—	$	19
Transfers from Level 2 to Level 1	—		—		—		—

Fair value of alternative investments

Included in Other investments in the fair value hierarchy at June 30, 2014 and December 31, 2013 are investment funds, limited partnerships, and partially-owned investment companies measured at fair value using NAV as a practical expedient. At June 30, 2014 and December 31, 2013, there were no probable or pending sales related to any of the investments measured at fair value using NAV. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments:

				June 30				December 31
	Expected Liquidation Period of Underlying Assets			2014				2013
(in millions of U.S. dollars)		Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
Financial	5 to 9 Years	$	274	$	119	$	256	$	129
Real estate	3 to 9 Years	322		63		322		92
Distressed	6 to 9 Years	265		145		180		230
Mezzanine	6 to 9 Years	303		222		276		252
Traditional	3 to 8 Years	923		448		813		456
Vintage	1 to 3 Years	11		—		13		—
Investment funds	Not Applicable	385		—		428		—
		$	2,483	$	997	$	2,288	$	1,159

Included in all categories in the above table except for Investment funds are investments for which ACE will never have the contractual option to redeem but receives distributions based on the liquidation of the underlying assets. Further, for all categories except for Investment funds, ACE does not have the ability to sell or transfer the investments without the consent from the general partner of individual funds.

Investment Category	Consists of investments in private equity funds:
Financial	targeting financial services companies such as financial institutions and insurance services worldwide
Real estate	targeting global distress opportunities, value added U.S. properties, and global mezzanine debt securities in the commercial real estate market
Distressed	targeting distressed debt/credit and equity opportunities in the U.S
Mezzanine	targeting private mezzanine debt of large-cap and mid-cap companies in the U.S. and worldwide
Traditional	employing traditional private equity investment strategies such as buyout and venture with different geographical focuses including Brazil, Asia, Europe, and the U.S.
Vintage	made before 2002 and where the funds’ commitment periods had already expired

Investment funds

ACE’s investment funds employ various investment strategies such as long/short equity and arbitrage/distressed. Included in this category are investments for which ACE has the option to redeem at agreed upon value as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investment fund investments may be redeemed monthly, quarterly, semi-annually, or annually. If ACE wishes to redeem an investment fund investment, it must first determine if the investment fund is still in a lock-up period (a time when ACE cannot redeem its investment so that the investment fund manager has time to build the portfolio). If the investment fund is no longer in its lock-up period, ACE must then notify the investment fund manager of its intention to redeem by the notification date prescribed by the subscription agreement. Subsequent to notification, the investment fund can redeem ACE’s investment within several months of the notification. Notice periods for redemption of the investment funds range between 5 and 120 days. ACE can redeem its investment funds without consent from the investment fund managers.

Level 3 financial instruments

The fair values of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) consist of various inputs and assumptions that management makes when determining fair value. Management analyzes changes in fair value measurements classified within Level 3 by comparing pricing and returns of our investments to benchmarks, including month-over-month movements, investment credit spreads, interest rate movements, and credit quality of securities.

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ACE Limited and Subsidiaries

The following table presents the significant unobservable inputs used in the Level 3 liability valuations. Excluded from the table below are inputs used to determine the fair value of Level 3 assets which are based on single broker quotes or net asset value and contain no quantitative unobservable inputs developed by management. 

(in millions of U.S. dollars, except for percentages)	Fair Value				Valuation Technique	Significant Unobservable Inputs	Ranges
	June 30, 2014		December 31, 2013
GLB(1)	$	241	$	193	Actuarial model	Lapse rate	1% – 30%
						Annuitization rate	0% – 55%

⁽¹⁾  Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

The following tables present a reconciliation of the beginning and ending balances of financial instruments measured at fair value using significant unobservable inputs (Level 3): 

	Assets														Liabilities
Three Months Ended	Available-for-Sale Debt Securities									Equity securities		Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	26		$	151		$	8		$	2	$	2,611		$	243
Transfers into Level 3	2			26			—			—		—			—
Transfers out of Level 3	(16		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	—			2			—			—		7			—
Net Realized Gains/Losses	1			—			—			—		(3		)	(2		)
Purchases	—			30			—			—		152			—
Sales	(1		)	(2		)	—			—		(2		)	—
Settlements	—			(3		)	(1		)	—		(125		)	—
Balance–End of Period	$	12		$	204		$	7		$	2	$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—	$	(3	)	$	(2	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Three Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	35		$	118		$	13		$	2		$	—	$	2,328		$	753
Transfers into Level 3	29			5			—			7			7		—			—
Transfers out of Level 3	(14		)	(27		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	(1		)	—			(5		)	—		13			—
Net Realized Gains/Losses	—			(1		)	—			4			—		(1		)	(101		)
Purchases	3			23			—			1			2		113			—
Sales	(1		)	—			(3		)	(5		)	—		—			—
Settlements	—			(3		)	(1		)	—			—		(104		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(1	)	$	(101	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.0 billion at March 31, 2013, which includes a fair value derivative adjustment of $652 million and $753 million, respectively.

	Assets																		Liabilities
Six Months Ended	Available-for-Sale Debt Securities									Equity securities			Short-term investments			Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	44		$	166		$	8		$	4		$	7		$	2,440		$	193
Transfers into Level 3	2			30			—			—			—			—			—
Transfers out of Level 3	(34		)	(22		)	—			(2		)	(7		)	—			—
Change in Net Unrealized Gains (Losses) included in OCI	(1		)	2			—			1			—			48			—
Net Realized Gains/Losses	1			—			—			—			—			(3		)	48
Purchases	2			45			—			1			—			352			—
Sales	(2		)	(8		)	—			(2		)	—			(3		)	—
Settlements	—			(9		)	(1		)	—			—			(194		)	—
Balance–End of Period	$	12		$	204		$	7		$	2		$	—		$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	(3	)	$	48

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Six Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	60		$	102		$	13		$	3		$	—	$	2,252		$	1,119
Transfers into Level 3	32			17			—			7			7		—			—
Transfers out of Level 3	(41		)	(29		)	—			(1		)	—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	—			—			(5		)	—		35			—
Net Realized Gains/Losses	1			(1		)	—			4			—		(2		)	(467		)
Purchases	3			33			—			1			2		249			—
Sales	(2		)	—			(3		)	(5		)	—		(9		)	—
Settlements	(1		)	(8		)	(1		)	—			—		(176		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(2	)	$	(467	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.4 billion at December 31, 2012, which includes a fair value derivative adjustment of $652 million and $1.1 billion, respectively.

b) Financial instruments disclosed, but not measured, at fair value

ACE uses various financial instruments in the normal course of its business. Our insurance contracts are excluded from fair value of financial instruments accounting guidance, and therefore, are not included in the amounts discussed below.

The carrying values of cash, other assets, other liabilities, and other financial instruments not included below approximated their fair values.

Investments in partially-owned insurance companies

Fair values for investments in partially-owned insurance companies are based on ACE’s share of the net assets based on the financial statements provided by those companies.

Short- and long-term debt and trust preferred securities

Where practical, fair values for short-term debt, long-term debt, and trust preferred securities are estimated using discounted cash flow calculations based principally on observable inputs including incremental borrowing rates, which reflect ACE’s credit rating, for similar types of borrowings with maturities consistent with those remaining for the debt being valued.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The following tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at fair value:

June 30, 2014	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	601	$	194	$	—	$	795	$	779
Foreign	—		853		—		853		809
Corporate securities	—		1,914		15		1,929		1,828
Mortgage-backed securities	—		1,241		—		1,241		1,187
States, municipalities, and political subdivisions	—		1,197		—		1,197		1,171
	601		5,399		15		6,015		5,774
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	601	$	5,399	$	485	$	6,485	$	6,244
Liabilities:
Short-term debt	$	—	$	1,870	$	—	$	1,870	$	1,851
Long-term debt	—		4,392		—		4,392		4,057
Trust preferred securities	—		456		—		456		309
Total liabilities	$	—	$	6,718	$	—	$	6,718	$	6,217

December 31, 2013	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	596	$	236	$	—	$	832	$	820
Foreign	—		897		—		897		864
Corporate securities	—		1,990		15		2,005		1,922
Mortgage-backed securities	—		1,379		—		1,379		1,341
States, municipalities, and political subdivisions	—		1,150		—		1,150		1,151
	596		5,652		15		6,263		6,098
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	596	$	5,652	$	485	$	6,733	$	6,568
Liabilities:
Short-term debt	$	—	$	1,913	$	—	$	1,913	$	1,901
Long-term debt	—		4,088		—		4,088		3,807
Trust preferred securities	—		438		—		438		309
Total liabilities	$	—	$	6,439	$	—	$	6,439	$	6,017

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

5. Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts

The following table presents income and expenses relating to GMDB and GLB reinsurance. GLBs include GMIBs as well as some GMABs originating in Japan.

	Three Months Ended					Six Months Ended
	June 30					June 30
(in millions of U.S. dollars)	2014			2013		2014			2013
GMDB
Net premiums earned	$	18		$	20	$	37		$	40
Policy benefits and other reserve adjustments	$	13		$	25	$	28		$	44
GLB
Net premiums earned	$	34		$	37	$	70		$	76
Policy benefits and other reserve adjustments	10			2		19			11
Net realized gains (losses)	2			101		(48		)	470
Gain recognized in income	$	26		$	136	$	3		$	535
Net cash received	$	29		$	31	$	62		$	63
Net (increase) decrease in liability	$	(3	)	$	105	$	(59	)	$	472

Net realized gains (losses) in the table above include gains (losses) related to foreign exchange and fair value adjustments on insurance derivatives and exclude gains (losses) on S&P put options and futures held to partially offset the risk in the GLB reinsurance portfolio. Refer to Note 7 for additional information.

At June 30, 2014, reported liabilities for GMDB and GLB reinsurance were $107 million and $486 million, respectively, compared with $100 million and $427 million, respectively, at December 31, 2013. The reported liability for GLB reinsurance of $486 million at June 30, 2014, and $427 million at December 31, 2013, includes a fair value derivative adjustment of $241 million and $193 million, respectively. Reported liabilities for both GMDB and GLB reinsurance are determined using internal valuation models. Such valuations require considerable judgment and are subject to significant uncertainty. The valuation of these products is subject to fluctuations arising from, among other factors, changes in interest rates, changes in equity markets, changes in credit markets, changes in the allocation of the investments underlying annuitants’ account values, and assumptions regarding future policyholder behavior. These models and the related assumptions are continually reviewed by management and enhanced, as appropriate, based upon improvements in modeling assumptions and availability of more information, such as market conditions and demographics of in-force annuities.

Variable Annuity Net Amount at Risk

(i) Reinsurance covering the GMDB risk only

At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GMDB risk only was $601 million and $586 million, respectively.

For reinsurance programs covering the GMDB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no lapses or withdrawals;

• mortality according to 100 percent of the Annuity 2000 mortality table;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 1.5 percent and 2.5 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering the GMDB risk only, if all the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $676 million. This takes into account all applicable reinsurance treaty claim limits.

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ACE Limited and Subsidiaries

(ii) Reinsurance covering the GLB risk only

At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GLB risk only was $173 million and $136 million, respectively.

For reinsurance programs covering the GLB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no deaths, lapses, or withdrawals;

• policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

• for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.5 percent and 4.5 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty. 

(iii) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders

At June 30, 2014 and December 31, 2013, the GMDB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $69 million and $73 million, respectively.

At June 30, 2014 and December 31, 2013, the GLB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $142 million and $141 million, respectively.

These net amounts at risk reflect the interaction between the two types of benefits on any single policyholder (eliminating double-counting), and therefore the net amounts at risk should be considered additive.

For reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no lapses or withdrawals;

• mortality according to 100 percent of the Annuity 2000 mortality table;

• policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

• for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.0 percent and 4.0 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, if all of the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $64 million. This takes into account all applicable reinsurance treaty claim limits. Although there would be an increase in death claims resulting from 100 percent immediate mortality of all policyholders, the GLB claims would be zero.

The average attained age of all policyholders under sections i), ii), and iii) above, weighted by the guaranteed value of each reinsured policy, is approximately 69 years.

6. Debt

In May 2014, ACE INA Holdings Inc. issued $700 million of 3.35 percent senior notes due May 2024.  These senior notes are redeemable at any time at ACE INA Holdings Inc.'s option subject to a “make-whole” premium (the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate plus 0.15 percent). The notes are also

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law. These notes do not have the benefit of any sinking fund.  These senior unsecured notes are guaranteed on a senior basis by ACE Limited and they rank equally with all of ACE's other senior obligations.  They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

In May 2014, we reclassified ACE INA Holdings Inc.'s $450 million of 5.6 percent senior notes, due to mature on May 15, 2015, from Long-term debt to Short-term debt in the consolidated balance sheet.

In June 2014, ACE INA Holdings Inc.'s $500 million of 5.875 percent senior notes matured and were fully paid.

7. Commitments, contingencies, and guarantees

a) Derivative instruments

Derivative instruments employed

ACE maintains positions in derivative instruments such as futures, options, swaps, and foreign currency forward contracts for which the primary purposes are to manage duration and foreign currency exposure, yield enhancement, or to obtain an exposure to a particular financial market. ACE also maintains positions in convertible securities that contain embedded derivatives. Investment derivative instruments are recorded in either Other assets (OA) or Accounts payable, accrued expenses, and other liabilities (AP), convertible bonds are recorded in Fixed maturities available for sale (FM AFS) and convertible equity securities are recorded in Equity securities (ES) in the consolidated balance sheets. These are the most numerous and frequent derivative transactions.

In addition, ACE from time to time purchases to be announced mortgage-backed securities (TBAs) as part of its investing activities.

Under reinsurance programs covering GLBs, ACE assumes the risk of GLBs, including GMIB and GMAB, associated with variable annuity contracts. The GMIB risk is triggered if, at the time the contract holder elects to convert the accumulated account value to a periodic payment stream (annuitize), the accumulated account value is not sufficient to provide a guaranteed minimum level of monthly income. The GMAB risk is triggered if, at contract maturity, the contract holder’s account value is less than a guaranteed minimum value. The GLB reinsurance product meets the definition of a derivative instrument. Benefit reserves in respect of GLBs are classified as Future policy benefits (FPB) while the fair value derivative adjustment is classified within AP. ACE also maintains positions in exchange-traded equity futures contracts and options on equity market indices to limit equity exposure in the GMDB and GLB blocks of business.

In relation to certain debt issuances, ACE from time to time enters into interest rate swap transactions for the purpose of either fixing or reducing borrowing costs. Although the use of these interest rate swaps has the economic effect of fixing or reducing borrowing costs on a net basis, gross interest expense on the related debt issuances is included in Interest expense while the settlements related to the interest rate swaps are reflected in Net realized gains (losses) in the consolidated statements of operations. At June 30, 2014, ACE had no in-force interest rate swaps.

All derivative instruments are carried at fair value with changes in fair value recorded in Net realized gains (losses) in the consolidated statements of operations. None of the derivative instruments are designated as hedges for accounting purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The following table presents the balance sheet locations, fair values of derivative instruments in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:

				June 30, 2014							December 31, 2013
	Consolidated Balance Sheet Location	Fair Value					Notional Value/ Payment Provision		Fair Value					Notional Value/ Payment Provision
(in millions of U.S. dollars)		Derivative Asset		Derivative (Liability)					Derivative Asset		Derivative (Liability)
Investment and embedded derivative instruments
Foreign currency forward contracts	OA / (AP)	$	2	$	(4	)	$	1,296	$	3	$	(4	)	$	1,202
Cross-currency swaps	OA / (AP)	—		—			95		—		—			50
Options/Futures contracts on money market instruments	OA / (AP)	2		—			1,432		3		—			3,910
Futures contracts on notes and bonds	OA / (AP)	5		(6		)	1,372		13		(2		)	871
Convertible securities(1)	FM AFS / ES	333		—			280		302		—			254
		$	342	$	(10	)	$	4,475	$	321	$	(6	)	$	6,287
Other derivative instruments
Futures contracts on equities (2)	OA / (AP)	$	—	$	(15	)	$	1,468	$	—	$	(60	)	$	1,692
Options on equity market indices (2)	OA / (AP)	2		—			250		6		—			250
Other	OA / (AP)	16		(2		)	72		—		(2		)	8
		$	18	$	(17	)	$	1,790	$	6	$	(62	)	$	1,950
GLB(3)	(AP) / (FPB)	$	—	$	(486	)	$	315	$	—	$	(427	)	$	277

⁽¹⁾  Includes fair value of embedded derivatives.

⁽²⁾  Related to GMDB and GLB blocks of business.

⁽³⁾  Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

At June 30, 2014 and December 31, 2013, derivative liabilities of $14 million and $41 million, respectively, included in the table above were subject to a master netting agreement.  The remaining derivatives included in the table above were not subject to a master netting agreement. 

At both June 30, 2014 and December 31, 2013, our repurchase obligations of $1,401 million were fully collateralized.  At June 30, 2014 and December 31, 2013, our securities lending payable was $1,441 million and $1,633 million, respectively, and our securities lending collateral was $1,440 million and $1,632 million, respectively.  The securities lending collateral can only be accessed in the event that the institution borrowing the securities is in default under the lending agreement.  An indemnification agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of the securities on loan.  In contrast to securities lending programs, the use of cash received is not restricted for the repurchase obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The following table presents net realized gains (losses) related to derivative instrument activity in the consolidated statements of operations:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Investment and embedded derivative instruments
Foreign currency forward contracts	$	(1	)	$	12		$	(4	)	$	17
All other futures contracts and options	(18		)	33			(40		)	40
Convertible securities(1)	4			(5		)	4			1
Total investment and embedded derivative instruments	$	(15	)	$	40		$	(40	)	$	58
GLB and other derivative instruments
GLB(2)	$	2		$	101		$	(46	)	$	429
Futures contracts on equities(3)	(71		)	(66		)	(88		)	(303		)
Options on equity market indices(3)	(1		)	(2		)	(3		)	(15		)
Other	9			(1		)	7			(1		)
Total GLB and other derivative instruments	$	(61	)	$	32		$	(130	)	$	110
	$	(76	)	$	72		$	(170	)	$	168

⁽¹⁾  Includes embedded derivatives.

⁽²⁾  Excludes foreign exchange gains (losses) related to GLB.

⁽³⁾  Related to GMDB and GLB blocks of business.

Derivative instrument objectives

(i) Foreign currency exposure management

A foreign currency forward contract (forward) is an agreement between participants to exchange specific foreign currencies at a future date. ACE uses forwards to minimize the effect of fluctuating foreign currencies.

(ii) Duration management and market exposure

Futures

Futures contracts give the holder the right and obligation to participate in market movements, determined by the index or underlying security on which the futures contract is based. Settlement is made daily in cash by an amount equal to the change in value of the futures contract times a multiplier that scales the size of the contract. Exchange-traded futures contracts on money market instruments, notes and bonds are used in fixed maturity portfolios to more efficiently manage duration, as substitutes for ownership of the money market instruments, bonds and notes without significantly increasing the risk in the portfolio. Investments in futures contracts may be made only to the extent that there are assets under management not otherwise committed.

Exchange-traded equity futures contracts are used to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

Options

An option contract conveys to the holder the right, but not the obligation, to purchase or sell a specified amount or value of an underlying security at a fixed price. Option contracts are used in the investment portfolio as protection against unexpected shifts in interest rates, which would affect the duration of the fixed maturity portfolio. By using options in the portfolio, the overall interest rate sensitivity of the portfolio can be reduced. Option contracts may also be used as an alternative to futures contracts in the synthetic strategy as described above.

Another use for option contracts is to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

The price of an option is influenced by the underlying security, expected volatility, time to expiration, and supply and demand.

The credit risk associated with the above derivative financial instruments relates to the potential for non-performance by counterparties. Although non-performance is not anticipated, in order to minimize the risk of loss, management monitors the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

creditworthiness of its counterparties and obtains collateral. The performance of exchange-traded instruments is guaranteed by the exchange on which they trade. For non-exchange-traded instruments, the counterparties are principally banks which must meet certain criteria according to our investment guidelines.

Cross-currency swaps

Cross-currency swaps are agreements under which two counterparties exchange interest payments and principal denominated in different currencies at a future date.  We use cross-currency swaps to reduce the foreign currency and interest rate risk by converting cash flows back into local currency.  We invest in foreign currency denominated investments to improve credit diversification and also to obtain better duration matching to our liabilities that is limited in the local currency market.

Other

Included within Other are derivatives intended to reduce potential losses which may arise from certain exposures in our insurance business.  The economic benefit provided by these derivatives is similar to purchased reinsurance.  For example, from time to time ACE may enter into crop derivative contracts to protect underwriting results in the event of a significant decline in commodity prices.  Also included within Other are certain life insurance products that meet the definition of a derivative instrument for accounting purposes. 

(iii) Convertible security investments

A convertible security is a debt instrument or preferred stock that can be converted into a predetermined amount of the issuer’s equity. The convertible option is an embedded derivative within the host instruments which are classified in the investment portfolio as either available for sale or as an equity security. ACE purchases convertible securities for their total return and not specifically for the conversion feature.

(iv) TBA

By acquiring TBAs, we make a commitment to purchase a future issuance of mortgage-backed securities. For the period between purchase of the TBAs and issuance of the underlying security, we account for our position as a derivative in the consolidated financial statements. ACE purchases TBAs both for their total return and for the flexibility they provide related to our mortgage-backed security strategy.

(v) GLB

Under the GLB program, as the assuming entity, ACE is obligated to provide coverage until the expiration or maturity of the underlying deferred annuity contracts or the expiry of the reinsurance treaty. Premiums received under the reinsurance treaties are classified as premium. Expected losses allocated to premiums received are classified as Future policy benefits and valued similar to GMDB reinsurance. Other changes in fair value, principally arising from changes in expected losses allocated to expected future premiums, are classified as Net realized gains (losses). Fair value represents management’s estimate of exit price and thus, includes a risk margin. We may recognize a realized loss for other changes in fair value due to adverse changes in the capital markets (e.g., declining interest rates and/or declining equity markets) and changes in actual or estimated future policyholder behavior (e.g., increased annuitization or decreased lapse rates) although we expect the business to be profitable. We believe this presentation provides the most meaningful disclosure of changes in the underlying risk within the GLB reinsurance programs for a given reporting period.

b) Other investments

At June 30, 2014, included in Other investments in the consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $2.1 billion. In connection with these investments, we have commitments that may require funding of up to $1.0 billion over the next several years. 

c) Taxation

As of June 30, 2014, $27 million of unrecognized tax benefits remains outstanding. It is reasonably possible that over the next twelve months, the amount of unrecognized tax benefits may change resulting from the re-evaluation of unrecognized tax benefits arising from examinations of taxing authorities. With few exceptions, ACE is no longer subject to state and local or non-U.S. income tax examinations for years before 2005.

d) Letters of credit

We did not renew our $500 million bilateral letter of credit facility that expired in June 2014.  We elected instead to satisfy our collateral obligations primarily with insurance trusts supported by our investment portfolio.

28

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ACE Limited and Subsidiaries

e) Legal proceedings

Our insurance subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages and, in some jurisdictions, direct actions by allegedly-injured persons seeking damages from policyholders. These lawsuits, involving claims on policies issued by our subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in our loss and loss expense reserves. In addition to claims litigation, we are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct, employment claims, regulatory activity, or disputes arising from our business ventures. In the opinion of management, our ultimate liability for these matters could be, but we believe is not likely to be, material to our consolidated financial condition and results of operations.

8. Shareholders’ equity

All of ACE’s Common Shares are authorized under Swiss corporate law. Though the par value of Common Shares is stated in Swiss francs, ACE continues to use U.S. dollars as its reporting currency for preparing consolidated financial statements. Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value reduction) or from legal reserves, must be stated in Swiss francs though dividend payments are made by ACE in U.S. dollars. At our May 2013 and May 2014 annual general meetings, our shareholders approved a dividend for the following year, respectively, payable in four quarterly installments after the annual general meetings in the form of a distribution by way of a par value reduction. At the January 10, 2014 Extraordinary General Meeting, our shareholders approved a resolution to increase our quarterly dividend from $0.51 per share to $0.63 per share for the final two quarterly installments (made on January 31, 2014 and April 17, 2014) that had been earlier approved at our 2013 annual general meeting. The $0.12 per share increase for each installment was distributed from capital contribution reserves (Additional paid-in capital), a subaccount of legal reserves, and transferred to free reserves (Retained earnings) for payment, while the existing $0.51 per share was distributed by way of a par value reduction.

For the three and six months endedJune 30, 2014, dividends per Common Share amounted to CHF 0.58 ($0.65) and CHF 1.23 ($1.40), respectively. For the six months ended June 30, 2014, dividends included a distribution from capital contribution reserves of CHF 0.20 ($0.24). Par value reductions have been reflected as such through Common Shares in the consolidated statements of shareholders' equity and had the effect of reducing par value per Common Share to CHF 26.01 at June 30, 2014.

For the three and six months endedJune 30, 2013, dividends per Common Share amounted to CHF 0.48 ($0.51) and CHF 0.94 ($1.00).

Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, grants of restricted stock, and purchases under the Employee Stock Purchase Plan (ESPP). At June 30, 2014, 6,606,823 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans.

ACE Limited securities repurchase authorization

For the three and six months endedJune 30, 2014, ACE repurchased 2,306,000 and 5,793,882 Common Shares for a cost of $237 million and $569 million, respectively, in a series of open market transactions under the November 2013 Board authorization of a share repurchase program of up to $2.0 billion of ACE's Common Shares through December 31, 2014. At June 30, 2014, $1.37 billion in share repurchase authorization remained through December 31, 2014 pursuant to the Board authorization. For the period July 1, 2014 through July 29, 2014, ACE repurchased 1,281,630 Common Shares for a total of $133 million in a series of open market transactions. At July 29, 2014, $1.24 billion in share repurchase authorization remained through December 31, 2014.

9. Share-based compensation

The ACE Limited 2004 Long-Term Incentive Plan (the 2004 LTIP) permits grants of both incentive and non-qualified stock options principally at an option price per share equal to the grant date fair value of ACE’s Common Shares. Stock options are generally granted with a 3-year vesting period and a 10-year term. Stock options typically vest in equal annual installments over the vesting period, which is also the requisite service period. On February 27, 2014, ACE granted 1,779,074 stock options with a weighted-average grant date fair value of $18.00 each. The fair value of the options issued is estimated on the date of grant using the Black-Scholes option pricing model.

29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

The 2004 LTIP also permits grants of restricted stock and restricted stock units. ACE generally grants restricted stock and restricted stock units with a 4-year vesting period, based on a graded vesting schedule. The restricted stock is granted at market close price on the grant date. On February 27, 2014, ACE granted 1,492,290 restricted stock awards and 276,992 restricted stock units to employees and officers with a grant date fair value of $96.76 each. Each restricted stock unit represents our obligation to deliver to the holder one Common Share upon vesting.

10. Segment information

ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business segments have established relationships with reinsurance intermediaries.

For segment reporting purposes, certain items have been presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. ACE calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. For the Insurance – North American Agriculture segment, management includes gains and losses from fair value changes on crop derivatives as a component of underwriting income. For example, for the three months ended June 30, 2014, underwriting income in our Insurance – North American Agriculture segment was $27 million. This amount includes $8 million of realized gains related to crop derivatives which are included in Net realized gains (losses) below. For the Life segment, management 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 as components of Life underwriting income. For example, for the three months ended June 30, 2014, Life underwriting income of $89 million includes Net investment income of $66 million and gains from fair value changes in separate account assets of $17 million.

The following tables present the Statement of Operations by segment:

For the Three Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,635		$	388	$	1,760	$	278		$	498		$	—		$	4,559
Net premiums earned	1,542			330		1,709		261			490			—			4,332
Losses and loss expenses	1,016			287		830		109			146			—			2,388
Policy benefits	—			—		—		—			144			—			144
Policy acquisition costs	152			23		402		60			121			—			758
Administrative expenses	175			1		256		14			73			47			566
Underwriting income (loss)	199			19		221		78			6			(47		)	476
Net investment income	265			6		136		80			66			3			556
Net realized gains (losses) including OTTI	(11		)	8		14		(15		)	(72		)	3			(73		)
Interest expense	2			—		1		2			3			64			72
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			(17		)	—			(17		)
Other	(24		)	9		8		(10		)	4			5			(8		)
Income tax expense (benefit)	91			5		55		10			12			(40		)	133
Net income (loss)	$	384		$	19	$	307	$	141		$	(2	)	$	(70	)	$	779

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

For the Three Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance		Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,529		$	453	$	1,630	$	292	$	487	$	—		$	4,391
Net premiums earned	1,428			351		1,563		245		480		—			4,067
Losses and loss expenses	950			293		768		93		145		1			2,250
Policy benefits	—			—		—		—		110		—			110
Policy acquisition costs	142			20		360		48		95		—			665
Administrative expenses	159			3		251		12		86		53			564
Underwriting income (loss)	177			35		184		92		44		(54		)	478
Net investment income	250			7		136		71		63		7			534
Net realized gains (losses) including OTTI	28			1		8		31		36		—			104
Interest expense	3			—		2		1		4		63			73
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—		11		—			11
Other	(10		)	8		17		2		3		6			26
Income tax expense (benefit)	91			8		50		7		10		(51		)	115
Net income (loss)	$	371		$	27	$	259	$	184	$	115	$	(65	)	$	891

For the Six Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture			Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	3,053		$	582		$	3,531	$	586		$	992		$	—		$	8,744
Net premiums earned	3,029			433			3,321		545			974			—			8,302
Losses and loss expenses	1,956			413			1,647		235			297			1			4,549
Policy benefits	—			—			—		—			258			—			258
Policy acquisition costs	311			28			788		127			232			—			1,486
Administrative expenses	336			2			506		28			141			88			1,101
Underwriting income (loss)	426			(10		)	380		155			46			(89		)	908
Net investment income	535			13			268		157			130			6			1,109
Net realized gains (losses) including OTTI	(20		)	6			4		(23		)	(148		)	4			(177		)
Interest expense	5			—			2		3			6			127			143
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—		—			(11		)	—			(11		)
Other	(44		)	17			2		(29		)	11			12			(31		)
Income tax expense (benefit)	174			(2		)	92		20			22			(80		)	226
Net income (loss)	$	806		$	(6	)	$	556	$	295		$	—		$	(138	)	$	1,513

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

For the Six Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	2,813		$	566	$	3,250	$	571		$	989	$	—		$	8,189
Net premiums earned	2,766			403		3,022		492			957		—			7,640
Losses and loss expenses	1,828			325		1,515		199			302		7			4,176
Policy benefits	—			—		—		—			241		—			241
Policy acquisition costs	285			24		699		96			175		—			1,279
Administrative expenses	284			8		487		24			171		104			1,078
Underwriting income (loss)	369			46		321		173			68		(111		)	866
Net investment income	501			13		268		143			126		14			1,065
Net realized gains (losses) including OTTI	54			1		42		51			163		(1		)	310
Interest expense	1			—		3		2			8		119			133
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			7		—			7
Other	(25		)	16		16		(6		)	3		16			20
Income tax expense (benefit)	185			10		96		15			23		(92		)	237
Net income (loss)	$	763		$	34	$	516	$	356		$	316	$	(141	)	$	1,844

Underwriting assets are reviewed in total by management for purposes of decision-making. Other than goodwill and other intangible assets, ACE does not allocate assets to its segments.

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ACE Limited and Subsidiaries

The following table presents net premiums earned for each segment by product:

(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Three Months Ended June 30, 2014
Insurance – North American P&C	$	423	$	1,018	$	101	$	1,542
Insurance – North American Agriculture	330		—		—		330
Insurance – Overseas General	727		395		587		1,709
Global Reinsurance	132		129		—		261
Life	—		—		490		490
	$	1,612	$	1,542	$	1,178	$	4,332
For the Three Months Ended June 30, 2013
Insurance – North American P&C	$	368	$	967	$	93	$	1,428
Insurance – North American Agriculture	351		—		—		351
Insurance – Overseas General	658		374		531		1,563
Global Reinsurance	132		113		—		245
Life	—		—		480		480
	$	1,509	$	1,454	$	1,104	$	4,067
(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Six Months Ended June 30, 2014
Insurance – North American P&C	$	828	$	1,999	$	202	$	3,029
Insurance – North American Agriculture	433		—		—		433
Insurance – Overseas General	1,420		764		1,137		3,321
Global Reinsurance	286		259		—		545
Life	—		—		974		974
	$	2,967	$	3,022	$	2,313	$	8,302
For the Six Months Ended June 30, 2013
Insurance – North American P&C	$	715	$	1,869	$	182	$	2,766
Insurance – North American Agriculture	403		—		—		403
Insurance – Overseas General	1,243		713		1,066		3,022
Global Reinsurance	267		225		—		492
Life	—		—		957		957
	$	2,628	$	2,807	$	2,205	$	7,640

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

11. Earnings per share

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars, except share and per share data)	2014		2013		2014		2013
Numerator:
Net income	$	779	$	891	$	1,513	$	1,844
Denominator:
Denominator for basic earnings per share:
Weighted-average shares outstanding	337,846,228		341,047,290		338,353,260		340,913,450
Denominator for diluted earnings per share:
Share-based compensation plans	3,286,359		3,053,975		3,267,499		3,120,263
Weighted-average shares outstanding and assumed conversions	341,132,587		344,101,265		341,620,759		344,033,713
Basic earnings per share	$	2.30	$	2.61	$	4.47	$	5.41
Diluted earnings per share	$	2.28	$	2.59	$	4.43	$	5.36
Potential anti-dilutive share conversions	1,778,040		1,811,030		1,220,731		1,231,105

Excluded from weighted-average shares outstanding and assumed conversions is the impact of securities that would have been anti-dilutive during the respective periods.

12. Information provided in connection with outstanding debt of subsidiaries

The following tables present condensed consolidating financial information at June 30, 2014 and December 31, 2013, and for the three and six months endedJune 30, 2014 and 2013 for ACE Limited (Parent Guarantor) and ACE INA Holdings Inc. (Subsidiary Issuer). The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor. The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer.

During the third quarter of 2013, we determined that the Subsidiary Issuer columns presented in the previously issued condensed consolidating financial information should be presented on the equity method of accounting rather than on a consolidated basis. Accordingly, we have revised the disclosure to correct the Condensed Consolidating Statement of Operations and Comprehensive Income for the three and six months endedJune 30, 2013 and the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013. As a result of this revision to the Subsidiary Issuer condensed consolidating financial information, revenues and expenses and cash flows of the subsidiaries of ACE INA Holdings Inc. (Subsidiary Issuer) are now presented in the Other ACE Limited Subsidiaries column on a combined basis. In addition, we revised the Consolidating Adjustments and Eliminations column to correctly include all intercompany eliminations. Previously, this column reflected only ACE Limited parent company intercompany eliminations. We also revised the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013 to correct the presentation of negative cash associated with our affiliated notional cash pooling programs (Pools). In addition, certain items in the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013 have been reclassified to conform to current period presentation. Also, the operating cash flows have been corrected to properly reflect certain intercompany transactions previously recorded in financing cash flows for the six months endedJune 30, 2013.

Total shareholders' equity and net income of the Subsidiary Issuer and Parent Guarantor were not impacted as a result of these revisions. The impact of the revisions was not material to the prior period consolidated financial statements taken as a whole. There was no impact on the consolidated amounts previously reported.

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ACE Limited and Subsidiaries

Condensed Consolidating Balance Sheet at June 30, 2014

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	33	$	11	$	63,576	$	—		$	63,620
Cash(1)	44		1		1,026		(477		)	594
Insurance and reinsurance balances receivable	—		—		6,169		(853		)	5,316
Reinsurance recoverable on losses and loss expenses	—		—		19,609		(8,841		)	10,768
Reinsurance recoverable on policy benefits	—		—		1,260		(1,026		)	234
Value of business acquired	—		—		514		—			514
Goodwill and other intangible assets	—		—		5,522		—			5,522
Investments in subsidiaries	30,207		18,946		—		(49,153		)	—
Due from subsidiaries and affiliates, net	305		—		—		(305		)	—
Other assets	4		295		14,300		(3,720		)	10,879
Total assets	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,589	$	(8,412	)	$	37,177
Unearned premiums	—		—		10,154		(1,858		)	8,296
Future policy benefits	—		—		5,804		(1,026		)	4,778
Due to (from) subsidiaries and affiliates, net	—		78		227		(305		)	—
Affiliated notional cash pooling programs(1)	—		477		—		(477		)	—
Short-term debt	—		450		1,401		—			1,851
Long-term debt	—		4,045		12		—			4,057
Trust preferred securities	—		309		—		—			309
Other liabilities	268		1,418		12,112		(3,144		)	10,654
Total liabilities	268		6,777		75,299		(15,222		)	67,122
Total shareholders’ equity	30,325		12,476		36,677		(49,153		)	30,325
Total liabilities and shareholders’ equity	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Balance Sheet at December 31, 2013

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	32	$	10	$	60,886	$	—		$	60,928
Cash(1)	—		16		748		(185		)	579
Insurance and reinsurance balances receivable	—		—		5,835		(809		)	5,026
Reinsurance recoverable on losses and loss expenses	—		—		20,057		(8,830		)	11,227
Reinsurance recoverable on policy benefits	—		—		1,215		(997		)	218
Value of business acquired	—		—		536		—			536
Goodwill and other intangible assets	—		—		5,404		—			5,404
Investments in subsidiaries	28,351		18,105		—		(46,456		)	—
Due from subsidiaries and affiliates, net	844		—		—		(844		)
Other assets	5		258		13,788		(3,459		)	10,592
Total assets	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,714	$	(8,271	)	$	37,443
Unearned premiums	—		—		9,242		(1,703		)	7,539
Future policy benefits	—		—		5,612		(997		)	4,615
Due to (from) subsidiaries and affiliates, net	—		714		130		(844		)	—
Affiliated notional cash pooling programs(1)	185		—		—		(185		)	—
Short-term debt	—		500		1,401		—			1,901
Long-term debt	—		3,795		12		—			3,807
Trust preferred securities	—		309		—		—			309
Other liabilities	222		1,318		11,655		(3,124		)	10,071
Total liabilities	407		6,636		73,766		(15,124		)	65,685
Total shareholders’ equity	28,825		11,753		34,703		(46,456		)	28,825
Total liabilities and shareholders’ equity	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

36

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ACE Limited and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,559		$	—		$	4,559
Net premiums earned	—			—			4,332			—			4,332
Net investment income	1			1			554			—			556
Equity in earnings of subsidiaries	745			231			—			(976		)	—
Net realized gains (losses) including OTTI	—			8			(81		)	—			(73		)
Losses and loss expenses	—			—			2,388			—			2,388
Policy benefits	—			—			144			—			144
Policy acquisition costs and administrative expenses	22			8			1,294			—			1,324
Interest (income) expense	(9		)	70			11			—			72
Other (income) expense	(50		)	6			19			—			(25		)
Income tax expense (benefit)	4			(25		)	154			—			133
Net income	$	779		$	181		$	795		$	(976	)	$	779
Comprehensive income	$	1,348		$	511		$	1,364		$	(1,875	)	$	1,348

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,391		$	—		$	4,391
Net premiums earned	—			—			4,067			—			4,067
Net investment income	1			1			532			—			534
Equity in earnings of subsidiaries	842			257			—			(1,099		)	—
Net realized gains (losses) including OTTI	—			—			104			—			104
Losses and loss expenses	—			—			2,250			—			2,250
Policy benefits	—			—			110			—			110
Policy acquisition costs and administrative expenses	12			5			1,212			—			1,229
Interest (income) expense	(8		)	69			12			—			73
Other (income) expense	(57		)	6			88			—			37
Income tax expense (benefit)	5			(33		)	143			—			115
Net income	$	891		$	211		$	888		$	(1,099	)	$	891
Comprehensive loss	$	(499	)	$	(533	)	$	(502	)	$	1,035		$	(499	)

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	2,502		$	1,889	$	—		$	4,391
Net premiums earned	—			2,331			1,736		—			4,067
Net investment income	1			254			279		—			534
Equity in earnings of subsidiaries	842			—			—		(842		)	—
Net realized gains (losses) including OTTI	—			28			76		—			104
Losses and loss expenses	—			1,434			816		—			2,250
Policy benefits	—			63			47		—			110
Policy acquisition costs and administrative expenses	12			674			543		—			1,229
Interest (income) expense	(8		)	74			7		—			73
Other (income) expense	(57		)	65			29		—			37
Income tax expense	5			92			18		—			115
Net income	$	891		$	211		$	631	$	(842	)	$	891
Comprehensive income (loss)	$	(499	)	$	(533	)	$	1,375	$	(842	)	$	(499	)

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,744		$	—		$	8,744
Net premiums earned	—			—			8,302			—			8,302
Net investment income	1			1			1,107			—			1,109
Equity in earnings of subsidiaries	1,447			411			—			(1,858		)	—
Net realized gains (losses) including OTTI	—			7			(184		)	—			(177		)
Losses and loss expenses	—			—			4,549			—			4,549
Policy benefits	—			—			258			—			258
Policy acquisition costs and administrative expenses	39			14			2,534			—			2,587
Interest (income) expense	(19		)	141			21			—			143
Other (income) expense	(92		)	20			30			—			(42		)
Income tax expense (benefit)	7			(55		)	274			—			226
Net income	$	1,513		$	299		$	1,559		$	(1,858	)	$	1,513
Comprehensive income	$	2,456		$	777		$	2,502		$	(3,279	)	$	2,456

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,189	$	—		$	8,189
Net premiums earned	—			—			7,640		—			7,640
Net investment income	1			2			1,062		—			1,065
Equity in earnings of subsidiaries	1,756			445			—		(2,201		)	—
Net realized gains (losses) including OTTI	12			—			298		—			310
Losses and loss expenses	—			—			4,176		—			4,176
Policy benefits	—			—			241		—			241
Policy acquisition costs and administrative expenses	27			9			2,321		—			2,357
Interest (income) expense	(15		)	131			17		—			133
Other (income) expense	(95		)	15			107		—			27
Income tax expense (benefit)	8			(66		)	295		—			237
Net income	$	1,844		$	358		$	1,843	$	(2,201	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	216	$	318		$	217

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	4,584		$	3,605	$	—		$	8,189
Net premiums earned	—			4,337			3,303		—			7,640
Net investment income	1			502			562		—			1,065
Equity in earnings of subsidiaries	1,756			—			—		(1,756		)	—
Net realized gains (losses) including OTTI	12			38			260		—			310
Losses and loss expenses	—			2,687			1,489		—			4,176
Policy benefits	—			144			97		—			241
Policy acquisition costs and administrative expenses	27			1,300			1,030		—			2,357
Interest (income) expense	(15		)	141			7		—			133
Other (income) expense	(95		)	99			23		—			27
Income tax expense	8			148			81		—			237
Net income	$	1,844		$	358		$	1,398	$	(1,756	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	2,290	$	(1,756	)	$	217

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	83		$	(7	)	$	2,020		$	—		$	2,096
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(7,963		)	3			(7,960		)
Purchases of fixed maturities held to maturity	—			—			(129		)	—			(129		)
Purchases of equity securities	—			—			(64		)	—			(64		)
Sales of fixed maturities available for sale	—			—			3,845			(3		)	3,842
Sales of equity securities	—			—			45			—			45
Maturities and redemptions of fixed maturities available for sale	—			—			3,163			—			3,163
Maturities and redemptions of fixed maturities held to maturity	—			—			414			—			414
Net change in short-term investments	(1		)	(1		)	(293		)	—			(295		)
Net derivative instruments settlements	—			(7		)	(178		)	—			(185		)
Acquisition of subsidiaries (net of cash acquired of $4)	—			—			(172		)	—			(172		)
Other	—			(3		)	(115		)	—			(118		)
Net cash flows used for investing activities	(1		)	(11		)	(1,447		)	—			(1,459		)
Cash flows from financing activities
Dividends paid on Common Shares	(428		)	—			—			—			(428		)
Common Shares repurchased	—			—			(557		)	—			(557		)
Proceeds from issuance of long-term debt	—			699			—			—			699
Repayment of long-term debt	—			(500		)	—			—			(500		)
Proceeds from share-based compensation plans, including windfall tax benefits	—			—			75			—			75
Advances (to) from affiliates	575			(667		)	92			—			—
Net proceeds from (payments to) affiliated notional cash pooling programs(1)	(185		)	477			—			(292		)	—
Other	—			(6		)	92			—			86
Net cash flows (used for) from financing activities	(38		)	3			(298		)	(292		)	(625		)
Effect of foreign currency rate changes on cash and cash equivalents	—			—			3			—			3
Net increase (decrease) in cash	44			(15		)	278			(292		)	15
Cash – beginning of period(1)	—			16			748			(185		)	579
Cash – end of period(1)	$	44		$	1		$	1,026		$	(477	)	$	594

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Statement of Cash Flows (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	18		$	(38	)	$	1,828		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(10,907		)	103			(10,804		)
Purchases of fixed maturities held to maturity	—			—			(299		)	—			(299		)
Purchases of equity securities	—			—			(194		)	—			(194		)
Sales of fixed maturities available for sale	—			—			5,499			(103		)	5,396
Sales of equity securities	—			—			62			—			62
Maturities and redemptions of fixed maturities available for sale	—			—			4,112			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			—			908			—			908
Net change in short-term investments	—			3			(140		)	—			(137		)
Net derivative instruments settlements	—			—			(317		)	—			(317		)
Acquisition of subsidiaries (net of cash acquired of $38)	—			—			(977		)	—			(977		)
Capital contribution	(119		)	(1,010		)	—			1,129			—
Other	—			—			(126		)	—			(126		)
Net cash flows used for investing activities	(119		)	(1,007		)	(2,379		)	1,129			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Net proceeds from issuance of long-term debt	—			947			—			—			947
Advances (to) from affiliates	(352		)	352			—			—			—
Net payments to affiliated notional cash pooling programs(1)	513			(253		)	—			(260		)	—
Proceeds from exercise of options for Common Shares	6			—			56			—			62
Capital contribution	—			—			1,129			(1,129		)	—
Other	—			—			30			—			30
Net cash flows from (used for) financing activities	(2		)	1,046			1,003			(1,389		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			—			(26		)	—			(26		)
Net increase (decrease) in cash	(103		)	1			426			(260		)	64
Cash – beginning of period(1)	103			2			859			(349		)	615
Cash – end of period(1)	$	—		$	3		$	1,285		$	(609	)	$	679

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

ACE Limited and Subsidiaries

Condensed Consolidating Statement of Cash Flows (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)			Consolidating Adjustments(2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from operating activities	$	95		$	876		$	837		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			(6,604		)	(4,337		)	—			(10,941		)
Purchases of fixed maturities held to maturity	—			(284		)	(15		)	—			(299		)
Purchases of equity securities	—			(161		)	(33		)	—			(194		)
Sales of fixed maturities available for sale	—			3,571			1,825			—			5,396
Sales of equity securities	—			51			11			—			62
Maturities and redemptions of fixed maturities available for sale	—			1,839			2,273			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			613			295			—			908
Net derivative instruments settlements	—			10			(327		)	—			(317		)
Advances to affiliates	(429		)	—			—			429			—
Acquisition of subsidiaries (net of cash acquired of $38)	—			(977		)	—			—			(977		)
Capital contribution	(119		)	—			—			119			—
Other	—			(154		)	28			—			(126		)
Net cash flows used for investing activities	(548		)	(2,096		)	(280		)	548			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Proceeds from issuance of long-term debt	—			947			—			—			947
Proceeds from share-based compensation plans, including windfall tax benefits	6			(4		)	60			—			62
Advances from affiliates	—			352			77			(429		)	—
Capital contribution	—			—			119			(119		)	—
Other	—			30			—			—			30
Net cash flows from (used for) financing activities	(163		)	1,325			44			(548		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			(37		)	11			—			(26		)
Net increase (decrease) in cash	(616		)	68			612			—			64
Cash – beginning of period(3)	103			515			(3		)	—			615
Cash – end of period(3)	$	(513	)	$	583		$	609		$	—		$	679

⁽¹⁾ Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾ Includes ACE Limited parent company eliminations and certain consolidating adjustments.

⁽³⁾ ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

42

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three and six months ended June 30, 2014.

All comparisons in this discussion are to the corresponding prior year periods unless otherwise indicated.

Our results of operations and cash flows for any interim period are not necessarily indicative of our results for the full year. This discussion should be read in conjunction with our consolidated financial statements and related notes and our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2013 (2013 Form 10-K).

Other Information

We routinely post important information for investors on our website (www.acegroup.com) under the Investor Information section. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Securities and Exchange Commission (SEC) Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Investor Information portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report.

MD&A Index	Page
Forward-Looking Statements	44
Overview	46
Financial Highlights	46
Consolidated Operating Results	47
Prior Period Development	50
Segment Operating Results	54
Other Income and Expense Items	63
Net Investment Income	64
Net Realized and Unrealized Gains (Losses)	64
Investments	66
Critical Accounting Estimates	69
Reinsurance Recoverable on Ceded Reinsurance	69
Unpaid Losses and Loss Expenses	70
Asbestos and Environmental (A&E) and Other Run-off Liabilities	70
Fair Value Measurements	70
Guaranteed Living Benefits (GLB) Derivatives	71
Catastrophe Management	74
Natural Catastrophe Property Reinsurance Program	74
Crop Insurance	75
Liquidity	76
Capital Resources	77

43

______________________________________________________________________________________________________________________

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Any written or oral statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks, uncertainties, and other factors that could, should potential events occur, cause actual results to differ materially from such statements. These risks, uncertainties, and other factors, which are described in more detail elsewhere herein and in other documents we file with the U.S. Securities and Exchange Commission (SEC), include but are not limited to:

• losses arising out of natural or man-made catastrophes such as hurricanes, typhoons, earthquakes, floods, climate change (including effects on weather patterns; greenhouse gases; sea; land and air temperatures; sea levels; and rain and snow), nuclear accidents, or terrorism which could be affected by:

• the number of insureds and ceding companies affected;

• the amount and timing of losses actually incurred and reported by insureds;

• the impact of these losses on our reinsurers and the amount and timing of reinsurance recoverable actually received;

• the cost of building materials and labor to reconstruct properties or to perform environmental remediation following a catastrophic event; and

• complex coverage and regulatory issues such as whether losses occurred from storm surge or flooding and related lawsuits;

• actions that rating agencies may take from time to time, such as financial strength or credit ratings downgrades or placing these ratings on credit watch negative or the equivalent;

• the ability to collect reinsurance recoverable, credit developments of reinsurers, and any delays with respect thereto and changes in the cost, quality, or availability of reinsurance;

• actual loss experience from insured or reinsured events and the timing of claim payments;

• the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties associated with assessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-coverage limits, the impact of bankruptcy protection sought by various asbestos producers and other related businesses, and the timing of loss payments;

• changes to our assessment as to whether it is more likely than not that we will be required to sell, or have the intent to sell, available for sale fixed maturity investments before their anticipated recovery;

• infection rates and severity of pandemics and their effects on our business operations and claims activity;

• developments in global financial markets, including changes in interest rates, stock markets, and other financial markets, increased government involvement or intervention in the financial services industry, the cost and availability of financing, and foreign currency exchange rate fluctuations (which we refer to in this report as foreign exchange and foreign currency exchange), which could affect our statement of operations, investment portfolio, financial condition, and financing plans;

• general economic and business conditions resulting from volatility in the stock and credit markets and the depth and duration of potential recession;

• global political conditions, the occurrence of any terrorist attacks, including any nuclear, radiological, biological, or chemical events, or the outbreak and effects of war, and possible business disruption or economic contraction that may result from such events;

• judicial decisions and rulings, new theories of liability, legal tactics, and settlement terms;

• the effects of public company bankruptcies and/or accounting restatements, as well as disclosures by and investigations of public companies relating to possible accounting irregularities, and other corporate governance issues, including the effects of such events on:

• the capital markets;

• the markets for directors and officers (D&O) and errors and omissions (E&O) insurance; and

• claims and litigation arising out of such disclosures or practices by other companies;

44

• uncertainties relating to governmental, legislative and regulatory policies, developments, actions, investigations, and treaties, which, among other things, could subject us to insurance regulation or taxation in additional jurisdictions or affect our current operations;

• the actual amount of new and renewal business, market acceptance of our products, and risks associated with the introduction of new products and services and entering new markets, including regulatory constraints on exit strategies;

• the competitive environment in which we operate, including trends in pricing or in policy terms and conditions, which may differ from our projections and changes in market conditions that could render our business strategies ineffective or obsolete;

• acquisitions made by us performing differently than expected, our failure to realize anticipated expense-related efficiencies or growth from acquisitions, the impact of acquisitions on our pre-existing organization, or announced acquisitions not closing;

• risks associated with being a Swiss corporation, including reduced flexibility with respect to certain aspects of capital management and the potential for additional regulatory burdens;

• the potential impact from government-mandated insurance coverage for acts of terrorism;

• the availability of borrowings and letters of credit under our credit facilities;

• the adequacy of collateral supporting funded high deductible programs;

• changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;

• material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements;

• the effects of investigations into market practices in the property and casualty (P&C) industry;

• changing rates of inflation and other economic conditions, for example, recession;

• the amount of dividends received from subsidiaries;

• loss of the services of any of our executive officers without suitable replacements being recruited in a reasonable time frame;

• the ability of our technology resources, including information systems and security, to perform as anticipated; and

• management’s response to these factors and actual events (including, but not limited to, those described above).

The words “believe,” “anticipate,” “estimate,” “project,” “should,” “plan,” “expect,” “intend,” “hope,” “feel,” “foresee,” “will likely result,” or “will continue,” and variations thereof and similar expressions, identify forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future events, or otherwise.

45

______________________________________________________________________________________________________________________

Overview

ACE Limited is the Swiss-incorporated holding company of the ACE Group of Companies. ACE Limited, which is headquartered in Zurich, Switzerland, and its direct and indirect subsidiaries (collectively, the ACE Group of Companies, ACE, we, us, or our) are a global insurance and reinsurance organization, serving the needs of a diverse group of clients worldwide. At June 30, 2014, we had total assets of $97 billion and shareholders’ equity of $30 billion. ACE opened its first business office in Bermuda, in 1985, and continues to maintain operations in Bermuda.

We operate through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. For more information on our segments refer to “Segment Information” in our 2013 Form 10-K.

We have grown our business through increased premium volume, expansion of product offerings and geographic reach, and acquisitions of other companies. The Insurance – Overseas General segment has recently expanded its operations through the following acquisitions:

• The Siam Commercial Samaggi Insurance PCL (Samaggi) (we and our local partner acquired 60.86 percent ownership on April 28, 2014, and subsequently acquired an additional 32.17 percent ownership through a mandatory tender offer, which expired on June 17, 2014);

• ABA Seguros (May 2, 2013); and

• Fianzas Monterrey (April 1, 2013).

The consolidated financial statements include results of acquired businesses from the acquisition dates. Refer to Note 2 to the Consolidated Financial Statements for additional information on our acquisitions.

______________________________________________________________________________________________________________________

Financial Highlights for the Three Months Ended June 30, 2014

• Net income was $779 million compared with $891 million in the prior year period.

• Total company net premiums written increased 3.8 percent, or 4.5 percent on a constant-dollar basis.

• The P&C combined ratio was 87.7 percent compared with 87.9 percent in the prior year period.

• The current accident year P&C combined ratio excluding catastrophe losses was 88.9 percent compared with 89.2 percent in the prior year period.

• The P&C expense ratio was 29.3 percent compared with 29.2 percent in the prior year period.

• Total pre-tax and after-tax catastrophe losses including reinstatement premiums were $80 million (2.1 percentage points of the combined ratio) and $67 million, respectively, compared with $81 million (2.3 percentage points of the combined ratio) and $66 million, respectively, in the prior year period.

• Favorable prior period development pre-tax and after-tax were $126 million (3.3 percentage points of the combined ratio) and $106 million, respectively, compared with $128 million (3.6 percentage points of the combined ratio) and $109 million, respectively, in the prior year period.

• Operating cash flow was $846 million for the quarter.

• Net investment income increased 4.2 percent to $556 million.

• Share repurchases totaled $237 million, or approximately 2.3 million shares, during the quarter.

46

__________________________________________________________________________________________________________

Consolidated Operating Results – Three and Six Months Ended June 30, 2014 and 2013

	Three Months Ended							Six Months Ended
	June 30					% Change		June 30					% Change
(in millions of U.S. dollars, except for percentages)	2014			2013		Q-14 vs. Q-13		2014			2013		YTD-14 vs. YTD-13
Net premiums written	$	4,559		$	4,391	3.8	%	$	8,744		$	8,189	6.8	%
Net premiums earned	4,332			4,067		6.5	%	8,302			7,640		8.7	%
Net investment income	556			534		4.2	%	1,109			1,065		4.1	%
Net realized gains (losses)	(73		)	104		NM		(177		)	310		NM
Total revenues	4,815			4,705		2.3	%	9,234			9,015		2.4	%
Losses and loss expenses	2,388			2,250		6.1	%	4,549			4,176		8.9	%
Policy benefits	144			110		30.9	%	258			241		7.1	%
Policy acquisition costs	758			665		14.0	%	1,486			1,279		16.2	%
Administrative expenses	566			564		0.4	%	1,101			1,078		2.1	%
Interest expense	72			73		(1.4	)%	143			133		7.5	%
Other (income) expense	(25		)	37		NM		(42		)	27		NM
Total expenses	3,903			3,699		5.5	%	7,495			6,934		8.1	%
Income before income tax	912			1,006		(9.3	)%	1,739			2,081		(16.4	)%
Income tax expense	133			115		15.7	%	226			237		(4.6	)%
Net income	$	779		$	891	(12.5	)%	$	1,513		$	1,844	(18.0	)%
NM – not meaningful

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The following tables present a breakdown of consolidated net premiums written for the periods indicated:

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD-14 vs. YTD-13
Commercial P&C (retail and wholesale)	$	2,067		$	1,964		5.2	%	$	4,076		$	3,846		6.0	%
Personal and small commercial lines	614			522			17.6	%	1,124			891			26.1	%
Reinsurance	278			292			(4.9	)%	586			571			2.5	%
Property, casualty, and all other	2,959			2,778			6.5	%	5,786			5,308			9.0	%
Agriculture	388			453			(14.2	)%	582			566			3.0	%
Personal accident (A&H)	961			925			3.9	%	1,878			1,839			2.1	%
Life	251			235			6.9	%	498			476			4.6	%
Total consolidated	$	4,559		$	4,391		3.8	%	$	8,744		$	8,189		6.8	%
Total consolidated - constant dollars (C$) (1)				$	4,362		4.5	%				$	8,097		8.0	%
	2014 % of Total			2013 % of Total					2014 % of Total			2013 % of Total
Commercial P&C (retail and wholesale)	45		%	45		%			46		%	47		%
Personal and small commercial lines	14		%	12		%			13		%	11		%
Reinsurance	6		%	6		%			7		%	7		%
Property, casualty, and all other	65		%	63		%			66		%	65		%
Agriculture	8		%	11		%			7		%	7		%
Personal accident (A&H)	21		%	21		%			21		%	22		%
Life	6		%	5		%			6		%	6		%
Total consolidated	100		%	100		%			100		%	100		%

⁽¹⁾ On a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency rates as the comparable current period.

Net premiums written reflect the premiums we retain after purchasing reinsurance protection. Net premiums written increased for the three months ended June 30, 2014 in our Insurance – Overseas General segment on a constant-dollar basis from new business writings in all product lines – A&H, personal lines, and P&C. In addition, the acquisitions of ABA Seguros in May 2013 and Samaggi in April 2014 added to premium growth. The impact of foreign exchange adversely impacted growth on an as reported basis. Our Insurance – North American P&C segment also reported increases in net premiums written in our retail division from growth across a broad range of our product portfolio including our risk management business, surety, professional, general and specialty casualty, and A&H lines of business reflecting higher production and strong renewal retention. In addition, we grew net premiums written in our Commercial Risk Services division, primarily specialty and program business, and our personal lines division, primarily in the homeowners and automobile business offered through ACE Private Risk Services. Our wholesale and specialty division contributed to the increase in net premiums written from higher production in our property, casualty, and professional lines of business. Our Insurance – North American Agriculture segment reported a decrease in net premiums written primarily due to lower Multiple Peril Crop Insurance (MPCI) production reflecting lower commodity prices, partially offset by higher premium retention primarily as a result of the non-renewal of a third-party proportional reinsurance agreement.

For the six months ended June 30, 2014, net premiums written increased in our Insurance – Overseas General and Insurance – North American P&C segments due primarily to the factors described above. The acquisition of Fianzas Monterrey in April 2013 also added to premium growth in our Insurance – Overseas General segment. In addition, net premiums written increased in our Insurance – North American Agriculture segment, primarily due to decreased premium cessions to the U.S. government and to third-party reinsurers.

Net premiums earned for short-duration contracts, typically P&C contracts, generally reflect the portion of net premiums written that were recorded as revenues for the period as the exposure periods expire.  Net premiums earned for long-duration contracts,

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typically traditional life contracts, generally are recognized as earned when due from policyholders. Net premiums earned increased for the three and six months endedJune 30, 2014 primarily due to the increase in net premiums written as described above.

In evaluating our segments excluding Life, we use the combined ratio, the loss and loss expense ratio, the policy acquisition cost ratio, and the administrative expense ratio. We calculate these ratios by dividing the respective expense amounts by net premiums earned. We do not calculate these ratios for the Life segment as we do not use these measures to monitor or manage that segment. The combined ratio is determined by adding the loss and loss expense ratio, the policy acquisition cost ratio, and the administrative expense ratio. A combined ratio under 100 percent indicates underwriting income, and a combined ratio exceeding 100 percent indicates underwriting loss.

The following table presents our consolidated loss and loss expense ratio, policy acquisition cost ratio, administrative expense ratio, and combined ratio: 

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio	58.4	%	58.7	%	58.0	%	58.0	%
Policy acquisition cost ratio	16.6	%	15.9	%	17.1	%	16.5	%
Administrative expense ratio	12.7	%	13.3	%	13.1	%	13.6	%
Combined ratio	87.7	%	87.9	%	88.2	%	88.1	%

The following table presents the impact of catastrophe losses and related reinstatement premiums and the impact of prior period reserve development on our consolidated loss and loss expense ratio: 

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio, as reported	58.4	%	58.7	%	58.0	%	58.0	%
Catastrophe losses and related reinstatement premiums	(2.1	)%	(2.3	)%	(1.8	)%	(1.7	)%
Prior period development	3.3	%	3.6	%	2.4	%	3.0	%
Loss and loss expense ratio, adjusted	59.6	%	60.0	%	58.6	%	59.3	%

Total net pre-tax catastrophe losses, excluding related reinstatement premiums, were $80 million and $133 million for the three and six months endedJune 30, 2014, compared with $81 million and $113 million in the prior year periods, respectively. Catastrophe losses through June 30, 2014 were primarily related to severe weather-related events in the U.S., Japan, and Australia, and flooding and hailstorms in Europe. Catastrophe losses in the prior year periods were primarily related to flooding in Canada and Australia and severe storms in the U.S. The adjusted loss and loss expense ratio decreased for the three and six months endedJune 30, 2014 primarily due to both mix of business and underwriting actions improving loss ratios on several portfolios.

Prior period development arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years. We experienced net favorable prior period development of $126 million and $188 million for the three and six months endedJune 30, 2014, respectively. This compares with net favorable prior period development of $128 million and $198 million in the prior year periods, respectively. Refer to “Prior Period Development” for additional information.

Net investment income for the three and six months endedJune 30, 2014 was $556 million and $1.1 billion compared with $534 million and $1.1 billion for the prior year periods, respectively. Refer to “Net Investment Income” and “Investments” for additional information.

Policy acquisition costs consist of commissions, premium taxes, and certain underwriting costs related directly to the successful acquisition of a new or renewal insurance contract. Our policy acquisition cost ratio increased for the three and six months endedJune 30, 2014 primarily due to a change in the mix of business to products and regions that have a higher acquisition ratio.

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Our administrative expense ratio decreased for the three months ended June 30, 2014 primarily due to growth in net premiums earned that outpaced the growth in administrative expenses, and the impact of the acquisitions described above, which include lower administrative expenses than our other businesses. In addition, the prior year included an expense adjustment that unfavorably impacted the prior year administrative expense ratio. A similar adjustment did not occur in the current year.

Our administrative expense ratio decreased for the six months ended June 30, 2014 primarily due to growth in net premiums earned that outpaced the growth in administrative expenses, and the impact of the acquisitions described above. In addition, the prior year included expense adjustments that unfavorably impacted the prior year administrative expense ratio, which were offset by the favorable impact of a prior year legal settlement.

Our effective income tax rate, which we calculate as income tax expense divided by income before income tax, 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 income tax rate. Our effective income tax rate was 14.6 percent and 13.0 percent for the three and six months endedJune 30, 2014, respectively. Our effective income tax rate was 11.5 percent and 11.4 percent for the three and six months endedJune 30, 2013, respectively. The increase in effective tax rate was primarily due to both net realized losses and a lower percentage of operating earnings being generated in lower tax paying jurisdictions.

Prior Period Development

The following tables summarize (favorable) and adverse prior period development (PPD) by segment. Long-tail lines include lines such as workers' compensation, general liability, and professional liability; while short-tail lines include lines such as most property lines, energy, personal accident, aviation, marine (including associated liability-related exposures) and agriculture. Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail and short-tail business for each segment comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate.

Three Months Ended June 30	Long-tail			Short-tail			Total			% of net unpaid reserves(1)
(in millions of U.S. dollars, except for percentages)
2014
Insurance – North American P&C	$	(19	)	$	(20	)	$	(39	)	0.2	%
Insurance – North American Agriculture	—			—			—			—
Insurance – Overseas General	3			(66		)	(63		)	0.8	%
Global Reinsurance	(24		)	—			(24		)	1.2	%
Total	$	(40	)	$	(86	)	$	(126	)	0.5	%
2013
Insurance – North American P&C	$	(19	)	$	(28	)	$	(47	)	0.3	%
Insurance – North American Agriculture	—			—			—			—
Insurance – Overseas General	1			(53		)	(52		)	0.7	%
Global Reinsurance	(27		)	(2		)	(29		)	1.3	%
Total	$	(45	)	$	(83	)	$	(128	)	0.5	%
(1) Calculated based on the segment's total beginning of period net unpaid loss and loss expenses reserves.

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Six Months Ended June 30	Long-tail			Short-tail			Total			% of net unpaid reserves(1)
(in millions of U.S. dollars, except for percentages)
2014
Insurance – North American P&C	$	(80	)	$	(27	)	$	(107	)	0.7	%
Insurance – North American Agriculture	—			38			38			7.5	%
Insurance – Overseas General	4			(90		)	(86		)	1.0	%
Global Reinsurance	(23		)	(10		)	(33		)	1.5	%
Total	$	(99	)	$	(89	)	$	(188	)	0.7	%
2013
Insurance – North American P&C	$	(48	)	$	(39	)	$	(87	)	0.5	%
Insurance – North American Agriculture	—			(3		)	(3		)	0.9	%
Insurance – Overseas General	1			(75		)	(74		)	0.9	%
Global Reinsurance	(29		)	(5		)	(34		)	1.5	%
Total	$	(76	)	$	(122	)	$	(198	)	0.7	%
(1) Calculated based on the segment's total beginning of period net unpaid loss and loss expenses reserves.

Insurance – North American P&C

2014

For the three months ended June 30, 2014, net favorable PPD was $39 million, which was the net result of several underlying favorable and adverse movements, driven by the following principal changes:

• Net favorable development of $19 million in long-tail business, primarily from:

• Net favorable development of $33 million in our workers' compensation lines primarily in the 2013 accident year related to our annual assessment of multi-claimant events including industrial accidents. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses;

• Net favorable development of $21 million in our auto liability excess lines primarily impacting the 2009 accident year. Reported activity on loss and allocated loss expenses was lower than expected based on estimates from our prior review and original pricing assumptions; and

• Net adverse development of $28 million in our Brandywine run-off portfolios, primarily in general and products liability lines, including unallocated loss adjustment expenses, impacting the 1996 and prior accident years. Loss activity was higher than expected in these portfolios.

• Net favorable development of $20 million in short-tail business, with the notable driver being net favorable development of $14 million on wholesale property, primarily impacting the 2012 and 2013 accident years. Paid and reported loss activity was favorable relative to prior expectations, especially in our primary business, and in the development of losses arising from natural catastrophes.

For the six months ended June 30, 2014, net favorable PPD was $107 million, which was the net result of several underlying favorable and adverse movements, driven by the following principal changes:

• Net favorable development of $80 million in long-tail business, primarily from:

• Favorable development of $67 million in our excess casualty and umbrella businesses. Resolution of a disputed matter on an individual claim led to a release of $42 million in the 2003 accident year, and lower than expected reported activity across a number of years drove the remaining improvement;

• Favorable development of $26 million in our surety business, primarily from favorable claim emergence in the 2012 accident year;

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• Net favorable development of $21 million in our auto liability excess lines primarily impacting the 2009 accident year due to the same factors experienced for the three months ended June 30, 2014 as described above; and

• Net adverse development of $36 million in our Brandywine run-off portfolios, primarily in general and products liability lines, including unallocated loss adjustment expenses, impacting the 1996 and prior accident years due to the same factors experienced for the three months ended June 30, 2014 as described above.

• Net favorable development of $27 million in short-tail business driven by net favorable development of $14 million on wholesale property, primarily impacting the 2012 and 2013 accident years, due to the same factors experienced for the three months ended June 30, 2014 as described above.

2013

For the three months ended June 30, 2013, net favorable PPD was $47 million, which was the net result of several underlying favorable and adverse movements, driven by the following principal changes:

• Net favorable development of $19 million in long-tail business, primarily from:

• Net favorable development of $28 million in our national accounts portfolios which consist of commercial auto, general liability and workers' compensation lines of business. This favorable movement was the net impact of favorable and adverse movements, including:

• Favorable development of $40 million related to our annual assessment of multi-claimant events including industrial accidents impacting the 2012 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses;

• Net favorable development of $28 million on excess and high deductible workers' compensation lines driven by lower levels of reported losses than anticipated in our prior review and original pricing assumptions; and

• Adverse development of $40 million predominantly in workers' compensation related product lines primarily impacting the 2006 and prior accident years. The development was a function of higher than expected reported loss activity, higher allocated loss adjustment expenses, as well as increased weighting applied to experience-based methods.

• Net adverse development of $24 million in our Brandywine run-off portfolios primarily in general liability and workers' compensation product lines, including unallocated loss adjustment expenses, impacting the 1996 and prior accident years. Loss activity was higher than expected in these portfolios.

• Net favorable development of $28 million in short-tail business, which was the net result of several underlying favorable and adverse movements, none of which was significant individually or in the aggregate.

For the six months ended June 30, 2013, net favorable PPD was $87 million, which was the net result of several underlying favorable and adverse movements, driven by the following principal changes:

• Net favorable development of $48 million in long-tail business, primarily from:

• Favorable development of $50 million in our U.S. excess casualty and umbrella businesses primarily impacting the 2007 and prior accident years. Reported activity on loss and allocated loss expenses was lower than expected based on estimates from our prior review. In addition, increased weighting was applied to experience-based methods;

• Net favorable development of $28 million in our national accounts portfolios, which consist of commercial auto, general liability and workers' compensation lines of business, due to the same factors experienced for the three months ended June 30, 2013 as described above.

• Net adverse development of $24 million in our Brandywine run-off portfolios' general liability and workers' compensation product lines, including unallocated loss adjustment expenses, impacting the 1996 and prior accident years due to the same factors experienced for the three months ended June 30, 2013 as described above.

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• Favorable development of $22 million in our surety business primarily impacting the 2011 accident year. Reported claims to date in the 2011 accident year were lower than historical averages which in turn has generated lower than expected reported loss activity; and

• Adverse development of $23 million in our construction business impacting the 2012 and prior accident years. The adverse development was realized in both our workers' compensation and general liability product lines where loss activity in the period since our prior review was higher than expected.

• Net favorable development of $39 million in short-tail business, which was the net result of several underlying favorable and adverse movements, none of which was significant individually or in the aggregate.

Insurance – North American Agriculture

Insurance – North American Agriculture experienced no PPD in both the three months ended June 30, 2014 and 2013.

For the six months ended June 30, 2014, adverse PPD was $38 million compared with favorable PPD of $3 million for the prior year period. Actual claim development in the first quarter of 2014 for the Multiple Peril Crop Insurance (MPCI) business was higher than our year-end 2013 expectations for the 2013 crop year.

Insurance – Overseas General

2014

For the three months ended June 30, 2014 net favorable PPD was $63 million which was the net result of several underlying favorable and adverse movements, driven by the following principal change:

• Favorable development of $66 million in short-tail business, primarily from the property (excluding technical lines) and marine lines. Favorable large loss experience in accident year 2013 led to a $36 million reduction. Favorable development on specific claims and additional credibility assigned to accident years 2012 and prior favorable indications led to a $28 million reduction.

For the six months ended June 30, 2014 net favorable PPD was $86 million due primarily to the same factors experienced for the three months ended June 30, 2014 as described above.

2013

For the three months ended June 30, 2013 net favorable PPD was $52 million, which was the net result of several underlying favorable and adverse movements, driven by the following principal change:

• Favorable development of $53 million in short-tail business, primarily from property and marine lines. Accident year 2009 through 2012 had favorable development of $38 million with no significant movement in any particular line or year. Accident years 2007 and prior had favorable development of $15 million mainly from specific litigated claims.

For the six months ended June 30, 2013 net favorable PPD was $74 million due to the same factors experienced for the three months ended June 30, 2013 as described above.

Global Reinsurance

2014

For the three and six months ended June 30, 2014, net favorable PPD were $24 million and $33 million, respectively, which were the net result of several underlying favorable and adverse movements across a number of lines and across a number of treaty years, none of which was significant individually or in the aggregate.

2013

For the three months ended June 30, 2013, net favorable PPD was $29 million which was the net result of several underlying favorable and adverse movements, driven by the following principal changes:

• Favorable development of $27 million in long-tail business, primarily in the casualty line of business principally in treaty years 2007 and prior and in the professional liability line of business principally in treaty years 2008 and prior. Following the reserve studies completed in the three months ended June 30, 2013, we increased weighting applied to experience-

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based methods. Since experience has tended to be generally favorable compared with assumptions, the changes resulted in the favorable development referenced above.

For the six months ended June 30, 2013, net favorable PPD was $34 million, which was the net result of several underlying favorable and adverse movements, primarily due to the same factors experienced for the three months ended June 30, 2013 as described above.

__________________________________________________________________________________________________________

Segment Operating Results – Three and Six Months Ended June 30, 2014 and 2013

We operate through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. For additional information on our segments refer to “Segment Information” in our 2013 Form 10-K under Item 1. The discussions that follow include tables that show our segment operating results for the three and six months endedJune 30, 2014 and 2013.

Insurance – North American

Insurance – North American P&C

The Insurance – North American P&C segment comprises our operations in the U.S., Canada, and Bermuda. This segment includes our retail divisions: ACE USA (including ACE Canada), ACE Commercial Risk Services, and ACE Private Risk Services; our wholesale and specialty divisions of ACE Westchester and ACE Bermuda; and various run-off operations, including Brandywine Holdings Corporation (Brandywine). 

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD-14 vs. YTD-13
Net premiums written	$	1,635		$	1,529		6.9	%	$	3,053		$	2,813		8.5	%
Net premiums earned	1,542			1,428			7.9	%	3,029			2,766			9.5	%
Losses and loss expenses	1,016			950			6.9	%	1,956			1,828			7.0	%
Policy acquisition costs	152			142			7.0	%	311			285			9.1	%
Administrative expenses	175			159			10.1	%	336			284			18.3	%
Underwriting income	199			177			12.4	%	426			369			15.4	%
Net investment income	265			250			6.0	%	535			501			6.8	%
Net realized gains (losses)	(11		)	28			NM		(20		)	54			NM
Interest expense	2			3			(33.3	)%	5			1			400.0	%
Other (income) expense	(24		)	(10		)	140.0	%	(44		)	(25		)	76.0	%
Income tax expense	91			91			—		174			185			(5.9	)%
Net income	$	384		$	371		3.5	%	$	806		$	763		5.6	%
Loss and loss expense ratio	66.0		%	66.6		%			64.6		%	66.1		%
Policy acquisition cost ratio	9.8		%	9.9		%			10.3		%	10.3		%
Administrative expense ratio	11.3		%	11.1		%			11.0		%	10.3		%
Combined ratio	87.1		%	87.6		%			85.9		%	86.7		%

Net premiums written increased for the three and six months endedJune 30, 2014 in our retail division from growth across a broad range of our product portfolio including our risk management business, surety, professional, general and specialty casualty, and A&H lines of business reflecting higher production and strong renewal retention. In addition, we grew net premiums written for the three and six months endedJune 30, 2014 in our Commercial Risk Services division, primarily specialty and program business, and our personal lines division, primarily in the homeowners and automobile business offered through ACE Private Risk Services. Our wholesale and specialty divisions contributed to the increase in net premiums written for the three and six months endedJune 30, 2014 from higher production in our property, casualty, and professional lines of business. In addition, net premiums written increased for the three and six months ended June 30, 2014 due to lower excess of loss premiums ceded under our 2014 catastrophe reinsurance program.

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Net premiums earned increased for the three and six months endedJune 30, 2014 primarily due to the increase in net premiums written as described above.

The following tables present a line of business breakdown of Insurance – North American P&C net premiums earned:

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD-14 vs. YTD-13
Commercial P&C (retail and wholesale)	$	1,215		$	1,132		7.3	%	$	2,385		$	2,192		8.8	%
Personal and small commercial lines	226			203			11.4	%	442			392			12.8	%
Personal accident (A&H)	101			93			7.8	%	202			182			10.2	%
Net premiums earned	$	1,542		$	1,428		7.9	%	$	3,029		$	2,766		9.5	%
	2014 % of Total			2013 % of Total					2014 % of Total			2013 % of Total
Commercial P&C (retail and wholesale)	79		%	79		%			78		%	79		%
Personal and small commercial lines	15		%	15		%			15		%	14		%
Personal accident (A&H)	6		%	6		%			7		%	7		%
Net premiums earned	100		%	100		%			100		%	100		%

The following table presents the impact of catastrophe losses and related reinstatement premiums and prior period reserve development on our loss and loss expense ratio:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio, as reported	66.0	%	66.6	%	64.6	%	66.1	%
Catastrophe losses and related reinstatement premiums	(2.4	)%	(3.5	)%	(2.3	)%	(2.2	)%
Prior period development	2.6	%	3.4	%	3.6	%	3.2	%
Loss and loss expense ratio, adjusted	66.2	%	66.5	%	65.9	%	67.1	%

Net pre-tax catastrophe losses, excluding reinstatement premiums, were $36 million and $68 million for the three and six months endedJune 30, 2014, compared with $50 million and $61 million in the prior year periods, respectively. Catastrophe losses through June 30, 2014 were primarily from severe weather-related events in the U.S. and Australia. Catastrophe losses through June 30, 2013 were primarily from flooding in Canada and severe weather-related events in the U.S. Net favorable prior period development was $39 million and $107 million for the three and six months endedJune 30, 2014, compared with $47 million and $87 million in the prior year periods, respectively. Refer to “Prior Period Development” for additional information. For the three and six months ended June 30, 2014, the adjusted loss and loss expense ratio declined due to lower loss ratios in several of our lines where a combination of the execution of detailed portfolio management plans, product mix and earned rate changes have resulted in improved current accident year loss ratio performance. The improvement also reflects a reduction in loss adjustment expenses due to a change in estimated claim handling costs. These reductions were partially offset by higher non-catastrophe large losses in the current year quarter.

The policy acquisition cost ratio decreased slightly for the quarter and remained flat for the six months endedJune 30, 2014.

The administrative expense ratio was higher for the three months ended June 30, 2014 due primarily to a non-recurring expense adjustment which unfavorably impacted the current year ratio. Excluding this adjustment, the administrative expense ratio decreased by 0.1 points. For the six months ended June 30, 2014, the administrative expense ratio was higher compared to the prior year ratio which included a 1.0 point favorable impact related to a $29 million legal settlement. Excluding the impact of the legal settlement and the second quarter expense adjustment, the administrative expense ratio decreased for the six-month period by 0.4 points due to growth in net premiums earned that outpaced the growth in administrative expenses.

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Insurance – North American Agriculture

The Insurance – North American Agriculture segment comprises our North American based businesses that provide a variety of coverages in the U.S. and Canada including crop insurance, primarily MPCI and crop-hail through Rain and Hail as well as farm and ranch and specialty P&C commercial insurance products and services through our ACE Agribusiness unit.

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD-14 vs. YTD-13
Net premiums written	$	388		$	453		(14.2	)%	$	582		$	566		3.0	%
Net premiums earned	330			351			(5.7	)%	433			403			7.6	%
Losses and loss expenses (1)	279			293			(4.8	)%	407			325			25.2	%
Policy acquisition costs	23			20			15.0	%	28			24			16.7	%
Administrative expenses	1			3			(66.7	)%	2			8			(75.0	)%
Underwriting income (loss)	27			35			(22.9	)%	(4		)	46			NM
Net investment income	6			7			(14.3	)%	13			13			—
Net realized gains (losses) excluding gains (losses) from fair value changes on crop derivatives(1)	—			1			NM		—			1			NM
Other (income) expense	9			8			12.5	%	17			16			6.3	%
Income tax expense (benefit)	5			8			(37.5	)%	(2		)	10			NM
Net income (loss)	$	19		$	27		(29.6	)%	$	(6	)	$	34		NM
Loss and loss expense ratio	84.4		%	83.4		%			93.9		%	80.6		%
Policy acquisition cost ratio	7.0		%	5.6		%			6.4		%	5.8		%
Administrative expense ratio	0.4		%	0.9		%			0.6		%	2.2		%
Combined ratio	91.8		%	89.9		%			100.9		%	88.6		%

⁽¹⁾ (Gains) losses from fair value changes on crop derivatives are reclassified from Net realized gains (losses) to Losses and loss expenses for purposes of presenting Insurance - North American Agriculture underwriting income. Refer to Note 7 and Note 10 to the consolidated financial statements for more information on these derivatives.

Net premiums written decreased for the three months ended June 30, 2014 principally due to lower MPCI production reflecting lower commodity prices partially offset by higher premium retention primarily as a result of the non-renewal of a third-party proportional reinsurance agreement. For the six months ended June 30, 2014, net premiums written increased as the decrease for the quarter was more than offset by lower premium cessions to the U.S. government for the 2013 crop year as a result of the government's crop insurance profit and loss calculation formula, which typically results in higher retained premiums when losses increase.

Net premiums earned decreased for the three months ended June 30, 2014 and increased for the six months endedJune 30, 2014 primarily due to the factors described above.

The following table presents the impact of catastrophe losses and related reinstatement premiums and prior period reserve development on our loss and loss expense ratio:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio, as reported	84.4	%	83.4	%	93.9	%	80.6	%
Catastrophe losses and related reinstatement premiums	(2.6	)%	(0.8	)%	(2.2	)%	(0.7	)%
Prior period development	—		—		(10.5	)%	0.8	%
Loss and loss expense ratio, adjusted	81.8	%	82.6	%	81.2	%	80.7	%

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Net pre-tax catastrophe losses, excluding reinstatement premiums, were $9 million and $10 million for the three and six months endedJune 30, 2014 and $3 million for both of the prior year periods, respectively. For the three and six months ended June 30, 2014, net unfavorable prior period development was nil and $38 million, respectively. For the six month period, the amount includes an increase in incurred losses of $39 million for higher than expected MPCI losses for the 2013 crop year, as well as $36 million of unfavorable MPCI losses offset by a favorable increase in net premiums earned related to the government's crop insurance profit and loss calculation formula. For the three and six months ended June 30, 2013, net favorable prior period development was nil and $3 million, respectively. Refer to “Prior Period Development” for additional information. The adjusted loss and loss expense ratio was lower for the three months ended June 30, 2014 due to the net impact of a decline in commodity prices that resulted in higher estimated losses on our crop policies that was more than offset by a decrease in losses from the fair value changes on our crop derivative. Despite the reduction in the adjusted loss and loss expense ratio for the three month period, the ratio for the six months ended June 30, 2014 increased reflecting lower loss adjustment expenses in the prior year period due to a change in estimated claim handling costs. A similar benefit did not occur in the current year.

The policy acquisition cost ratio increased for the three and six months endedJune 30, 2014 primarily from lower ceded commission benefits on third-party reinsurance. For the six months endedJune 30, 2014, lower agent profit commission accruals for the 2013 crop year partially offset this increase.

The administrative expense ratio decreased for the three and six months ended June 30, 2014 due to lower expenses incurred.

Insurance – Overseas General

The Insurance – Overseas General segment comprises ACE International, ACE Global Markets (AGM), and the international supplemental A&H business of Combined Insurance. ACE International comprises our retail commercial P&C, A&H, and personal lines businesses serving territories outside the U.S., Bermuda, and Canada. AGM comprises the segment's London-based wholesale insurance business for excess and surplus lines; this includes Lloyd’s of London Syndicate 2488. The reinsurance operations of AGM are included in the Global Reinsurance segment.

	Three Months Ended									Six Months Ended
	June 30						% Change			June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13			2014			2013			YTD-14 vs. YTD-13
Net premiums written	$	1,760		$	1,630		8.0	%	(1)	$	3,531		$	3,250		8.7	%	(1)
Net premiums earned	1,709			1,563			9.4	%		3,321			3,022			9.9	%
Losses and loss expenses	830			768			8.1	%		1,647			1,515			8.7	%
Policy acquisition costs	402			360			11.7	%		788			699			12.7	%
Administrative expenses	256			251			2.0	%		506			487			3.9	%
Underwriting income	221			184			20.1	%		380			321			18.4	%
Net investment income	136			136			—			268			268			—
Net realized gains (losses)	14			8			75.0	%		4			42			(90.5	)%
Interest expense	1			2			(50.0	)%		2			3			(33.3	)%
Other (income) expense	8			17			(52.9	)%		2			16			(87.5	)%
Income tax expense	55			50			10.0	%		92			96			(4.2	)%
Net income	$	307		$	259		18.5	%		$	556		$	516		7.8	%
Loss and loss expense ratio	48.6		%	49.1		%				49.6		%	50.1		%
Policy acquisition cost ratio	23.5		%	23.0		%				23.7		%	23.1		%
Administrative expense ratio	15.0		%	16.1		%				15.3		%	16.2		%
Combined ratio	87.1		%	88.2		%				88.6		%	89.4		%

⁽¹⁾ For the three and six months ended June 30, 2014, net premiums written increased $143 million or 8.8% on a constant-dollar basis and $337 million or 10.5% on a constant-dollar basis, respectively. Amounts are calculated by translating prior period results using the same local currency rates as the comparable current period. 

Net premiums written increased for the three and six months endedJune 30, 2014 on a constant-dollar basis from new business writings in our retail operations in all product lines – A&H, personal lines, and P&C. A&H growth was driven by strong

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results in all regions except Europe, and the increase in personal lines reflected growth in all regions, except Japan. P&C growth was driven primarily by new business writings in Asia and Europe and the acquisitions of ABA Seguros in May 2013 and Samaggi in April 2014. Growth for the six months ended June 30, 2014 also included the impact of Fianzas Monterrey, acquired in April 2013. The impact of foreign exchange adversely impacted growth in both periods on an as reported basis.

Net premiums earned increased for the three and six months endedJune 30, 2014 primarily due to the increase in net premiums written as described above.

Insurance – Overseas General conducts business internationally and in most major foreign currencies. The following tables present a line of business and regional breakdown of Insurance – Overseas General net premiums earned:

	Three Months Ended June 30										% Change
(in millions of U.S. dollars, except for percentages)	2014		2014 % of Total		2013		2013 % of Total		C$(1) 2013		Q-14 vs. Q-13		C$(1) Q-14 vs. Q-13
Line of Business
Commercial P&C (retail and wholesale)	$	798	47	%	$	775	50	%	$	790	3.0	%	1.0	%
Personal and small commercial lines	324		19	%	257		16	%	242		26.2	%	33.8	%
Personal accident (A&H)	587		34	%	531		34	%	526		10.6	%	11.7	%
Net premiums earned	$	1,709	100	%	$	1,563	100	%	$	1,558	9.4	%	9.8	%
Region
Europe / U.K.	$	801	47	%	$	740	48	%	$	834	8.2	%	(4.0	)%
Asia Pacific	389		23	%	350		22	%	282		11.1	%	37.9	%
Far East	107		6	%	107		7	%	104		—		2.9	%
Latin America	412		24	%	366		23	%	338		12.6	%	21.9	%
Net premiums earned	$	1,709	100	%	$	1,563	100	%	$	1,558	9.4	%	9.8	%

	Six Months Ended June 30										% Change
(in millions of U.S. dollars, except for percentages)	2014		2014 % of Total		2013		2013 % of Total		C$(1) 2013		YTD-14 vs. YTD-13		C$(1)YTD-14 vs. YTD-13
Line of Business
Commercial P&C (retail and wholesale)	$	1,561	47	%	$	1,511	50	%	$	1,512	3.3	%	3.2	%
Personal and small commercial lines	623		19	%	445		15	%	414		40.1	%	50.6	%
Personal accident (A&H)	1,137		34	%	1,066		35	%	1,038		6.7	%	9.6	%
Net premiums earned	$	3,321	100	%	$	3,022	100	%	$	2,964	9.9	%	12.1	%
Region
Europe / U.K.	$	1,553	47	%	$	1,466	49	%	$	1,573	5.9	%	(1.3	)%
Asia Pacific	738		22	%	692		23	%	600		6.6	%	23.0	%
Far East	214		6	%	224		7	%	205		(4.5	)%	4.4	%
Latin America	816		25	%	640		21	%	586		27.5	%	39.2	%
Net premiums earned	$	3,321	100	%	$	3,022	100	%	$	2,964	9.9	%	12.1	%

⁽¹⁾ On a constant-dollar basis.  Amounts are calculated by translating prior period results using the same local currency rates as the comparable current period. 

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The following table presents the impact of catastrophe losses and related reinstatement premiums and prior period reserve development on our loss and loss expense ratio: 

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio, as reported	48.6	%	49.1	%	49.6	%	50.1	%
Catastrophe losses and related reinstatement premiums	(1.5	)%	(1.1	)%	(1.3	)%	(1.3	)%
Prior period development	3.7	%	3.3	%	2.6	%	2.5	%
Loss and loss expense ratio, adjusted	50.8	%	51.3	%	50.9	%	51.3	%

Net pre-tax catastrophe losses, excluding reinstatement premiums, were $26 million and $43 million for the three and six months endedJune 30, 2014, compared with $17 million and $38 million in the prior year periods, respectively. Catastrophe losses through June 30, 2014 were primarily related to flooding in Europe and severe storms in Japan. Catastrophe losses through June 30, 2013 were primarily related to flooding in Australia and Canada. Net favorable prior period development was $63 million and $86 million for the three and six months endedJune 30, 2014, compared with $52 million and $74 million in the prior year periods, respectively. Refer to “Prior Period Development” for additional information. The decrease in the adjusted loss and loss expense ratio for the three and six months endedJune 30, 2014 was due primarily to both mix of business and underwriting actions improving loss ratios on several portfolios.

The policy acquisition cost ratio increased for the three months ended June 30, 2014 primarily due to a change in the overall mix of business towards A&H and personal lines products in regions that have higher acquisition cost ratios. For the six months ended June 30, 2014, the increase noted above was partially offset by the impact of the businesses acquired described above, which carry lower acquisition cost ratios than our other businesses, and the result of purchase accounting requirements. As a result of purchase accounting requirements, the unearned premiums at the date of purchase related to the businesses acquired are recognized over the remaining coverage period with no expense for the associated historical acquisition costs that were incurred to underwrite those policies.

The administrative expense ratio decreased for the three and six months endedJune 30, 2014 due primarily to growth in net premiums earned that outpaced the growth in administrative expenses, and the acquisitions described above, which include lower administrative expenses than our other businesses.

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Global Reinsurance

The Global Reinsurance segment represents our reinsurance operations comprising ACE Tempest Re Bermuda, ACE Tempest Re USA, ACE Tempest Re International, and ACE Tempest Re Canada. Global Reinsurance markets its reinsurance products worldwide under the ACE Tempest Re brand name and provides a broad range of coverage to a diverse array of primary P&C companies.

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD-14 vs. YTD-13
Net premiums written	$	278		$	292		(4.9	)%	$	586		$	571		2.5	%
Net premiums earned	261			245			6.1	%	545			492			10.8	%
Losses and loss expenses	109			93			17.2	%	235			199			18.1	%
Policy acquisition costs	60			48			25.0	%	127			96			32.3	%
Administrative expenses	14			12			16.7	%	28			24			16.7	%
Underwriting income	78			92			(15.2	)%	155			173			(10.4	)%
Net investment income	80			71			12.7	%	157			143			9.8	%
Net realized gains (losses)	(15		)	31			NM		(23		)	51			NM
Interest expense	2			1			100.0	%	3			2			50.0	%
Other (income) expense	(10		)	2			NM		(29		)	(6		)	383.3	%
Income tax expense	10			7			42.9	%	20			15			33.3	%
Net income	$	141		$	184		(23.4	)%	$	295		$	356		(17.1	)%
Loss and loss expense ratio	41.7		%	37.7		%			43.1		%	40.3		%
Policy acquisition cost ratio	23.1		%	19.9		%			23.3		%	19.6		%
Administrative expense ratio	5.1		%	4.6		%			5.1		%	4.9		%
Combined ratio	69.9		%	62.2		%			71.5		%	64.8		%

Net premiums written decreased for the three months ended June 30, 2014 primarily due to lower net property catastrophe premiums. For the six months endedJune 30, 2014, this decrease was more than offset by increased net premiums written from a number of new large personal lines structured transactions (homeowners and automobile) in our U.S. operations.

Net premiums earned increased for the three and six months endedJune 30, 2014 primarily in our U.S. property and casualty lines of business from higher premiums written in the current and prior year periods.

The following tables present a line of business breakdown of Global Reinsurance net premiums earned:

	Three Months Ended								Six Months Ended
	June 30						% Change		June 30						% Change
(in millions of U.S. dollars, except for percentages)	2014			2013			Q-14 vs. Q-13		2014			2013			YTD -14 vs. YTD -13
Property and all other	$	72		$	59		22.0	%	$	156		$	119		31.1	%
Casualty	129			113			14.2	%	259			225			15.1	%
Property catastrophe	60			73			(17.8	)%	130			148			(12.2	)%
Net premiums earned	$	261		$	245		6.1	%	$	545		$	492		10.8	%
	2014 % of Total			2013 % of Total					2014 % of Total			2013 % of Total
Property and all other	28		%	24		%			29		%	24		%
Casualty	49		%	46		%			47		%	46		%
Property catastrophe	23		%	30		%			24		%	30		%
Net premiums earned	100		%	100		%			100		%	100		%

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The following table presents the impact of catastrophe losses and related reinstatement premiums and prior period reserve development on our loss and loss expense ratio:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2014		2013		2014		2013
Loss and loss expense ratio, as reported	41.7	%	37.7	%	43.1	%	40.3	%
Catastrophe losses and related reinstatement premiums	(3.4	)%	(4.6	)%	(2.2	)%	(2.2	)%
Prior period development	8.9	%	12.2	%	5.9	%	7.0	%
Loss and loss expense ratio, adjusted	47.2	%	45.3	%	46.8	%	45.1	%

Net pre-tax catastrophe losses, excluding reinstatement premiums, were $9 million and $12 million for the three and six months endedJune 30, 2014 and $11 million for both of the prior year periods, respectively. Catastrophe losses through June 30, 2014 were related to severe storms in Japan, European hailstorms and severe weather related events in the U.S. Catastrophe losses through June 30, 2013 were primarily related to flooding in Canada and Europe. Net favorable prior period development was $24 million and $33 million for the three and six months endedJune 30, 2014, compared with $29 million and $34 million in the prior year periods, respectively. Refer to “Prior Period Development” for additional information. The adjusted loss and loss expense ratio increased for the three and six months endedJune 30, 2014 primarily due to a change in the mix of business towards higher loss ratio products.

The policy acquisition cost ratio increased for the three and six months endedJune 30, 2014 primarily due to a change in the mix of business towards products written in the U.S. that have a higher acquisition cost ratio than in other regions.

The administrative expense ratio increased for the three and six months endedJune 30, 2014. The prior year included the favorable impact of a $2 million expense adjustment that reduced the administrative expense ratio in the prior year periods. Excluding this adjustment, the administrative expense ratio decreased for the three and six months endedJune 30, 2014 due to the increase in net premiums earned.

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Life

The Life segment includes our international life operations (ACE Life), ACE Tempest Life Re (ACE Life Re), and the North American supplemental A&H and life business of Combined Insurance. 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 that do not qualify for separate account reporting under GAAP.

	Three Months Ended							Six Months Ended
	June 30					% Change		June 30					% Change
(in millions of U.S. dollars, except for percentages)	2014			2013		Q-14 vs. Q-13		2014			2013		YTD-14 vs. YTD-13
Net premiums written	$	498		$	487	2.2	%	$	992		$	989	0.2	%
Net premiums earned	490			480		2.2	%	974			957		1.8	%
Losses and loss expenses	146			145		0.7	%	297			302		(1.7	)%
Policy benefits	144			110		30.9	%	258			241		7.1	%
(Gains) losses from fair value changes in separate account assets(1)	(17		)	11		NM		(11		)	7		NM
Policy acquisition costs	121			95		27.4	%	232			175		32.6	%
Administrative expenses	73			86		(15.1	)%	141			171		(17.5	)%
Net investment income	66			63		4.8	%	130			126		3.2	%
Life underwriting income	89			96		(7.3	)%	187			187		—
Net realized gains (losses)	(72		)	36		NM		(148		)	163		NM
Interest expense	3			4		(25.0	)%	6			8		(25.0	)%
Other (income) expense(1)	4			3		33.3%		11			3		266.7	%
Income tax expense	12			10		20.0	%	22			23		(4.3	)%
Net income (loss)	$	(2	)	$	115	NM		$	—		$	316	NM

⁽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 following table presents a line of business breakdown of Life net premiums written and deposits collected on universal life and investment contracts: 

	Three Months Ended						Six Months Ended
	June 30				% Change		June 30				% Change
(in millions of U.S. dollars, except for percentages)	2014		2013		Q-14 vs. Q-13		2014		2013		YTD-14 vs. YTD-13
A&H	$	247	$	252	(2.0	)%	$	494	$	513	(3.7	)%
Life insurance	186		163		14.1	%	366		330		10.9	%
Life reinsurance	65		72		(9.7	)%	132		146		(9.6	)%
Net premiums written (excludes deposits below)	$	498	$	487	2.2	%	$	992	$	989	0.2	%
Deposits collected on universal life and investment contracts	$	282	$	222	27.0	%	$	484	$	424	14.2	%

A&H net premiums written decreased for the three and six months endedJune 30, 2014 as growth in certain program business was more than offset by the non-renewal of several large accounts and a catch-up in premium registrations in the prior year periods. Life insurance net premiums written increased for the three and six months endedJune 30, 2014 primarily due to growth in our Asian and Latin American markets. Life reinsurance net premiums written decreased for the three and six months endedJune 30, 2014 because no new life reinsurance business is currently being written.

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. New life deposits are an important component of production and key to our efforts to grow our business. Although life deposits do not significantly affect current period income from operations, they are an

62

important indicator of future profitability. Life deposits collected for the three and six months endedJune 30, 2014 increased compared to prior year due to growth in our Asian markets.

Net realized gains (losses), which are excluded from Life underwriting income, relate primarily to the change in the net fair value of reported GLB reinsurance liabilities and changes in the fair value of derivatives used to partially offset the risk in the variable annuity guarantee portfolio. During the quarter, realized gains of $2 million were associated with a net decrease in the value of GLB liabilities. During the six months ended June 30, 2014, realized losses of $48 million were associated with a net increase in the value of GLB liabilities. The increase in the value of GLB liabilities during the six months ended June 30, 2014, was primarily due to lower interest rates and the unfavorable impact of discounting future claims for two fewer quarters, partially offset by rising U.S. equity levels. In addition, we experienced realized losses of $72 million and $91 million for the three and six months ended June 30, 2014 due to a decrease in the value of the derivative instruments, which decrease in value when the S&P 500 index increases.

______________________________________________________________________________________________________________________

Other Income and Expense Items

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U. S. dollars)	2014			2013			2014			2013
Amortization of intangible assets	$	30		$	23		$	51		$	38
Equity in net (income) loss of partially-owned entities	(44		)	(14		)	(99		)	(49		)
(Gains) losses from fair value changes in separate account assets	(17		)	11			(11		)	7
Federal excise and capital taxes	5			6			9			11
Acquisition-related costs	2			2			6			2
Other	(1		)	9			2			18
Other (income) expense	$	(25	)	$	37		$	(42	)	$	27

Other (income) expense includes Amortization of intangible assets, which is higher in 2014 due primarily to our recent acquisitions. Refer to Note 2 to the Consolidated Financial Statements for additional information on our acquisitions. Equity in net (income) loss of partially-owned entities includes our share of net (income) loss related to investment funds, limited partnerships, partially-owned investment companies, and partially-owned insurance companies. Also included in Other (income) expense are (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP. The offsetting movement in the separate account liabilities is included in Policy benefits in the consolidated statements of operations. Certain federal excise and capital taxes incurred as a result of capital management initiatives are included in Other (income) expense as these are considered capital transactions and are excluded from underwriting results.

The following table presents, as of June 30, 2014, the estimated pre-tax amortization expense related to intangible assets for the third and fourth quarters of 2014 and the next five years:

For the Year Ending December 31	Amortization of intangible assets
(in millions of U.S. dollars)
Third and fourth quarters of 2014	$	52
2015	80
2016	66
2017	60
2018	57
2019	54
Total	$	369

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______________________________________________________________________________________________________________________

Net Investment Income

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Fixed maturities	$	541		$	518		$	1,085		$	1,034
Short-term investments	10			7			18			13
Equity securities	10			12			19			20
Other investments	27			26			47			57
Gross investment income	588			563			1,169			1,124
Investment expenses	(32		)	(29		)	(60		)	(59		)
Net investment income	$	556		$	534		$	1,109		$	1,065

Net investment income is influenced by a number of factors including the amounts and timing of inward and outward cash flows, the level of interest rates, and changes in overall asset allocation. Net investment income increased 4.2 percent and 4.1 percent for the three and six months ended June 30, 2014, respectively, compared with the prior year periods. The increase in net investment income was primarily due to a higher invested asset base.

The investment portfolio’s average market yield on fixed maturities was 2.6 percent and 2.9 percent at June 30, 2014 and 2013, respectively. Average market yield on fixed maturities represents the weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings at that date.

The 1.8 percent and 1.7 percent yield on short-term investments for the three and six months endedJune 30, 2014, respectively, reflect the global nature of our insurance operations. For example, yields on short-term investments in Mexico, Malaysia, Indonesia, China, and Ecuador range from 3.0 percent to 8.2 percent.

The 4.4 percent yield on our equity securities portfolio is high relative to the yield on the S&P 500 Index because of dividends on preferred equity securities and because we classify our strategic emerging debt portfolio, which is a mutual fund, as equity. The preferred equity securities and strategic emerging debt portfolio represented 68 percent and 70 percent of the gross equity securities investment income for the three and six months endedJune 30, 2014, respectively.

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Net Realized and Unrealized Gains (Losses)

We take a long-term view with our investment strategy, and our investment managers manage our investment portfolio to maximize total return within certain specific guidelines designed to minimize risk. The majority of our investment portfolio is available for sale and reported at fair value. Our held to maturity investment portfolio is reported at amortized cost.

The effect of market movements on our available for sale investment portfolio impacts Net income (through Net realized gains (losses)) when securities are sold or when we record an Other-than-temporary impairment (OTTI) charge in Net income. For a discussion related to how we assess OTTI for all of our investments, including credit-related OTTI, and the related impact on Net income, refer to Note 3 c) to the Consolidated Financial Statements. Additionally, Net income is impacted through the reporting of changes in the fair value of derivatives, including financial futures, options, swaps, and GLB reinsurance. Changes in unrealized appreciation and depreciation on available for sale securities, which result from the revaluation of securities held, are reported as a separate component of Accumulated other comprehensive income in Shareholders’ equity in the consolidated balance sheets.

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The following tables present our pre-tax net realized and unrealized gains (losses) on investments:

	Three Months Ended June 30, 2014								Three Months Ended June 30, 2013
(in millions of U.S. dollars)	Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)		Net Impact			Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact
Fixed maturities	$	20		$	538	$	558		$	31		$	(1,466	)	$	(1,435	)
Fixed income derivatives	(15		)	—		(15		)	40			—			40
Total fixed maturities	5			538		543			71			(1,466		)	(1,395		)
Public equity	1			24		25			7			(57		)	(50		)
Private equity	(3		)	6		3			(1		)	15			14
Other	(1		)	—		(1		)	—			—			—
Subtotal	2			568		570			77			(1,508		)	(1,431		)
Derivatives
Fair value adjustment on insurance derivatives	2			—		2			101			—			101
S&P put option and futures	(72		)	—		(72		)	(68		)	—			(68		)
Fair value adjustment on other derivatives	9			—		9			(1		)	—			(1		)
Subtotal derivatives	(61		)	—		(61		)	32			—			32
Foreign exchange losses	(14		)	—		(14		)	(5		)	—			(5		)
Total gains (losses)	$	(73	)	$	568	$	495		$	104		$	(1,508	)	$	(1,404	)

⁽¹⁾  For the three months ended June 30, 2014, other-than-temporary impairments include $8 million for fixed maturities, $3 million for private equity, and $1 million for public equity. For the three months ended June 30, 2013, other-than-temporary impairments include $6 million for fixed maturities and $1 million for private equity.

	Six Months Ended June 30, 2014								Six Months Ended June 30, 2013
(in millions of U.S. dollars)	Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)		Net Impact			Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact
Fixed maturities	$	31		$	999	$	1,030		$	67		$	(1,657	)	$	(1,590	)
Fixed income derivatives	(40		)	—		(40		)	58			—			58
Total fixed maturities	(9		)	999		990			125			(1,657		)	(1,532		)
Public equity	(4		)	34		30			6			(43		)	(37		)
Private equity	(3		)	48		45			(2		)	40			38
Other	(8		)	—		(8		)	—			1			1
Subtotal	(24		)	1,081		1,057			129			(1,659		)	(1,530		)
Derivatives
Fair value adjustment on insurance derivatives	(46		)	—		(46		)	429			—			429
S&P put option and futures	(91		)	—		(91		)	(318		)	—			(318		)
Fair value adjustment on other derivatives	7			—		7			(1		)	—			(1		)
Subtotal derivatives	(130		)	—		(130		)	110			—			110
Foreign exchange gains (losses)	(23		)	—		(23		)	71			—			71
Total gains (losses)	$	(177	)	$	1,081	$	904		$	310		$	(1,659	)	$	(1,349	)

⁽¹⁾  For the six months ended June 30, 2014, other-than-temporary impairments include $13 million for fixed maturities, $3 million for private equity, and $7 million for public equity. For the six months ended June 30, 2013, other-than-temporary impairments include $7 million for fixed maturities, $2 million for private equity, and $1 million for public equity.

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At June 30, 2014, our investment portfolios held by U.S. legal entities included approximately $60 million of gross unrealized losses on fixed income investments. Our tax planning strategy related to these losses is based on our view that we will hold these fixed income investments until they recover their cost. As such, we have recognized a deferred tax asset of approximately $21 million related to these fixed income investments. This strategy allows us to recognize the associated deferred tax asset related to these fixed income investments as we do not believe these losses will ever be realized.

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Investments

Our investment portfolio is invested primarily in publicly traded, investment grade, fixed income securities with an average credit quality of A/Aa as rated by the independent investment rating services Standard and Poor’s (S&P)/ Moody’s Investors Service (Moody’s). The portfolio is externally managed by independent, professional investment managers and is broadly diversified across geographies, sectors, and issuers. Other investments principally comprise direct investments, investment funds, and limited partnerships. We hold no collateralized debt obligations or collateralized loan obligations in our investment portfolio, and we provide no credit default protection. We have long-standing global credit limits for our entire portfolio across the organization. Exposures are aggregated, monitored, and actively managed by our Global Credit Committee, comprising senior executives, including our Chief Financial Officer, our Chief Risk Officer, our Chief Investment Officer, and our Treasurer. We also have well-established, strict contractual investment rules requiring managers to maintain highly diversified exposures to individual issuers and closely monitor investment manager compliance with portfolio guidelines.

The average duration of our fixed income securities, including the effect of options and swaps, was 4.0 years at both June 30, 2014 and December 31, 2013. We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $2.4 billion at June 30, 2014.

The following table shows the fair value and cost/amortized cost of our invested assets:

	June 30, 2014				December 31, 2013
(in millions of U.S. dollars)	Fair Value		Cost/ Amortized Cost		Fair Value		Cost/ Amortized Cost
Fixed maturities available for sale	$	51,601	$	49,719	$	49,254	$	48,406
Fixed maturities held to maturity	6,015		5,774		6,263		6,098
Short-term investments	2,108		2,108		1,763		1,763
	59,724		57,601		57,280		56,267
Equity securities	907		874		837		841
Other investments	3,230		2,876		2,976		2,671
Total investments	$	63,861	$	61,351	$	61,093	$	59,779

The fair value of our total investments increased $2.8 billion during the six months ended June 30, 2014, primarily due to the investing of operating cash flows and unrealized appreciation.

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The following tables present the market value of our fixed maturities and short-term investments at June 30, 2014 and December 31, 2013. The first table lists investments according to type and second according to S&P credit rating:

	June 30, 2014				December 31, 2013
(in millions of U.S. dollars, except for percentages)	Market Value		% of Total		Market Value		% of Total
Treasury	$	2,386	4	%	$	2,327	4	%
Agency	1,278		2	%	1,454		3	%
Corporate and asset-backed securities	19,959		33	%	19,475		34	%
Mortgage-backed securities	12,659		21	%	12,273		21	%
Municipal	4,872		8	%	4,500		8	%
Non-U.S.	16,462		28	%	15,488		27	%
Short-term investments	2,108		4	%	1,763		3	%
Total	$	59,724	100	%	$	57,280	100	%
AAA	$	9,073	15	%	$	8,677	15	%
AA	22,470		38	%	21,520		38	%
A	11,400		19	%	11,168		19	%
BBB	7,996		13	%	7,193		12	%
BB	4,435		7	%	4,418		8	%
B	4,126		7	%	3,940		7	%
Other	224		1	%	364		1	%
Total	$	59,724	100	%	$	57,280	100	%

Corporate and asset-backed securities

The following table presents our 10 largest global exposures to corporate bonds by market value at June 30, 2014:

(in millions of U.S. dollars)	Market Value
JP Morgan Chase & Co	$	481
General Electric Co	407
Goldman Sachs Group Inc	360
Wells Fargo & Co	291
Verizon Communications Inc	274
HSBC Holdings Plc	260
Morgan Stanley	256
Citigroup Inc	251
Bank of America Corp	239
AT&T INC	235

Mortgage-backed securities

	S&P Credit Rating										Market  Value		Amortized Cost
June 30, 2014 (in millions of U.S. dollars)	AAA		AA		A		BBB		BB and below		Total		Total
Agency residential mortgage-backed (RMBS)	$	—	$	10,563	$	—	$	—	$	—	$	10,563	$	10,319
Non-agency RMBS	51		7		21		14		51		144		142
Commercial mortgage-backed	1,923		14		12		3		—		1,952		1,911
Total mortgage-backed securities	$	1,974	$	10,584	$	33	$	17	$	51	$	12,659	$	12,372

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Municipal

As part of our overall investment strategy, we may invest in states, municipalities, and other political subdivisions fixed maturity securities (Municipal). We apply the same investment selection process described previously to our Municipal investments. The portfolio is highly diversified primarily in state general obligation bonds and essential service revenue bonds including education and utilities (water, power, and sewers).

Non-U.S.

Our exposure to the Euro results primarily from ACE European Group which is headquartered in London and offers a broad range of coverages throughout the European Union, Central, and Eastern Europe. ACE primarily invests in Euro denominated investments to support its local currency insurance obligations and required capital levels. ACE’s local currency investment portfolios have strict contractual investment guidelines requiring managers to maintain a high quality and diversified portfolio to both sector and individual issuers. Investment portfolios are monitored daily to ensure investment manager compliance with portfolio guidelines.

Our non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of our non-U.S. operations. The average credit quality of our non-U.S. fixed income securities is A and 52 percent of our holdings are rated AAA or guaranteed by governments or quasi-government agencies. Within the context of these investment portfolios, our government and corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA—two percent, A—one percent, BBB—0.5 percent of the total portfolio) and are monitored daily via an internal compliance system. Because of this investment approach we do not have a direct exposure to troubled sovereign borrowers in Europe. We manage our indirect exposure using the same credit rating based investment approach. Accordingly, we do not believe our indirect exposure is material.

The following table summarizes the market value and amortized cost of our non-U.S. fixed income portfolio by country/sovereign for non-U.S. government securities at June 30, 2014: 

(in millions of U.S. dollars)	Market Value		Amortized Cost
United Kingdom	$	1,123	$	1,130
Republic of Korea	812		760
Canada	560		548
United Mexican States	462		458
Kingdom of Thailand	377		373
Province of Ontario	359		347
Japan	302		302
Federative Republic of Germany	285		277
Province of Quebec	270		260
Federative Republic of Brazil	264		260
Other Non-U.S. Government Securities(1)	2,773		2,676
Total	$	7,587	$	7,391

⁽¹⁾  There are no investments in Portugal, Ireland, Italy, Greece or Spain.

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The following table summarizes the market value and amortized cost of our non-U.S. fixed income portfolio by country/sovereign for non-U.S. corporate securities at June 30, 2014: 

(in millions of U.S. dollars)	Market Value		Amortized Cost
United Kingdom	$	1,588	$	1,507
Canada	1,150		1,087
Australia	663		638
United States	620		585
France	581		555
Netherlands	549		524
Germany	477		455
Switzerland	297		282
Euro Supranational	289		280
Brazil	235		229
Other Non-U.S. Corporate Securities	2,426		2,360
Total	$	8,875	$	8,502

The countries that are listed in the non-U.S. corporate fixed income portfolio above represent the ultimate parent company's country of risk. Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations.

Below-investment grade corporate fixed income portfolio

Below-investment grade securities have different characteristics than investment grade corporate debt securities. Risk of loss from default by the borrower is greater with below-investment grade securities. Below-investment grade securities are generally unsecured and are often subordinated to other creditors of the issuer. Also, issuers of below-investment grade securities usually have higher levels of debt and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than are investment grade issuers. At June 30, 2014, our corporate fixed income investment portfolio included below-investment grade and non-rated securities which, in total, comprised approximately 14 percent of our fixed income portfolio. Our below-investment grade and non-rated portfolio includes over 1,200 issuers, with the greatest single exposure being $97 million.

We manage high-yield bonds as a distinct and separate asset class from investment grade bonds. The 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. Our high-yield managers have a conservative approach to credit selection and very low historical default experience. Holdings are highly diversified across industries and subject to a 1.5 percent issuer limit as a percentage of high-yield allocation. We monitor position limits daily through an internal compliance system. Derivative and structured securities (e.g., credit default swaps and collateralized loan obligations) are not permitted in the high-yield portfolio.

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Critical Accounting Estimates

As of June 30, 2014, there were no material changes to our critical accounting estimates. For a full discussion of our critical accounting estimates, refer to Item 7 in our 2013 Form 10-K.

Reinsurance recoverable on ceded reinsurance

	June 30		December 31
(in millions of U.S. dollars)	2014		2013
Reinsurance recoverable on unpaid losses and loss expenses (1)	$	10,110	$	10,612
Reinsurance recoverable on paid losses and loss expenses (1)	658		615
Net reinsurance recoverable on losses and loss expenses	$	10,768	$	11,227
Reinsurance recoverable on policy benefits	$	234	$	218

⁽¹⁾  Net of provision for uncollectible reinsurance

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We evaluate the financial condition of our reinsurers and potential reinsurers on a regular basis and also monitor concentrations of credit risk with reinsurers. The provision for uncollectible reinsurance is required principally due to the potential failure of reinsurers to indemnify us, primarily because of disputes under reinsurance contracts and insolvencies. The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance recoverables, net of approximately $2.4 billion and $2.3 billion of collateral at June 30, 2014 and December 31, 2013, respectively. The decrease in net reinsurance recoverable on losses and loss expenses was primarily due to favorable PPD, crop activity, and collections relating to run-off operations.

Unpaid losses and loss expenses

As an insurance and reinsurance company, we are required by applicable laws and regulations and GAAP to establish loss and loss expense reserves for the estimated unpaid portion of the ultimate liability for losses and loss expenses under the terms of our policies and agreements with our insured and reinsured customers. At June 30, 2014, our gross unpaid loss and loss expense reserves were $37.2 billion and our net unpaid loss and loss expense reserves were $27.1 billion. With the exception of certain structured settlements, for which the timing and amount of future claim payments are reliably determinable, and certain reserves for unsettled claims that are discounted in statutory filings, our loss reserves are not discounted for the time value of money.

The following table presents a roll-forward of our unpaid losses and loss expenses: 

(in millions of U.S. dollars)	Gross Losses			Reinsurance Recoverable(1)			Net Losses
Balance at December 31, 2013	$	37,443		$	10,612		$	26,831
Losses and loss expenses incurred	5,466			917			4,549
Losses and loss expenses paid	(5,937		)	(1,491		)	(4,446		)
Other (including foreign exchange translation)	205			72			133
Balance at June 30, 2014	$	37,177		$	10,110		$	27,067

⁽¹⁾  Net of provision for uncollectible reinsurance

The estimate of the liabilities includes provisions for claims that have been reported but are unpaid at the balance sheet date (case reserves) and for obligations on claims that have been incurred but not reported (IBNR) at the balance sheet date. IBNR may also include provisions to account for the possibility that reported claims may settle for amounts that differ from the established case reserves. Loss reserves also include an estimate of expenses associated with processing and settling unpaid claims (loss expenses).

The following table presents our total reserves segregated between case reserves (including loss expense reserves) and IBNR reserves: 

	June 30, 2014						December 31, 2013
(in millions of U.S. dollars)	Gross		Ceded		Net		Gross		Ceded		Net
Case reserves	$	15,894	$	4,377	$	11,517	$	16,558	$	4,790	$	11,768
IBNR reserves	21,283		5,733		15,550		20,885		5,822		15,063
Total	$	37,177	$	10,110	$	27,067	$	37,443	$	10,612	$	26,831

Asbestos and Environmental (A&E) and Other Run-off Liabilities

There was no significant A&E reserve activity during the six months ended June 30, 2014. Refer to our 2013 Form 10-K for additional information on A&E and Other Run-off Liabilities.

Fair value measurements

Accounting guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1 inputs) and the lowest priority to unobservable data (Level 3 inputs):

• Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets.

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• Level 2 includes inputs other than quoted prices included within Level 1 that are observable for assets or liabilities either directly or indirectly. Level 2 inputs include, among other items, quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves.

• Level 3 inputs are unobservable and reflect our judgments about assumptions that market participants would use in pricing an asset or liability.

We categorize financial instruments within the valuation hierarchy at the balance sheet date based upon the lowest level of inputs that are significant to the fair value measurement. Accordingly, transfers between levels within the valuation hierarchy occur when there are significant changes to the inputs, such as increases or decreases in market activity, changes to the availability of current prices, changes to the transparency to underlying inputs, and whether there are significant variances in quoted prices. Transfers in and/or out of any level are assumed to occur at the end of the period.

While we obtain values for the majority of our investment securities from pricing services, it is ultimately our responsibility to determine whether the values obtained in the financial statements are representative of fair value. We periodically update our understanding of the methodologies used by our pricing services in order to validate that the prices obtained from those services are consistent with the GAAP definition of fair value as an exit price. Based on our understanding of the methodologies, our pricing services only produce an estimate of fair value if there is observable market information that would allow them to make a fair value estimate. Based on our understanding of the market inputs used by our pricing services, all applicable investments have been valued in accordance with GAAP valuation principles. We have controls to review significant price changes and stale pricing, and to ensure that prices received from pricing services have been accurately reflected in the consolidated financial statements. We do not adjust prices obtained from pricing services.

Additionally, fixed maturities valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing), which may increase the potential that an investment's estimated fair value is not reflective of the price at which an actual transaction would occur. For a small number of fixed maturities, we obtain a quote from a broker (typically a market maker). Due to the disclaimers on the quotes that indicate that the price is indicative only, we include these fair value estimates in Level 3.

At both June 30, 2014 and December 31, 2013, Level 3 assets represented five percent of assets measured at fair value and three percent of total assets. Level 3 liabilities represented 90 percent and 74 percent of liabilities measured at fair value at June 30, 2014 and December 31, 2013, respectively, and less than one percent of our total liabilities at both June 30, 2014 and December 31, 2013. During the three and six months ended June 30, 2014, we transferred assets of $28 million and $32 million into our Level 3 assets from other levels of the valuation hierarchy. During the three and six months ended June 30, 2014, we transferred assets of $16 million and $65 million out of our Level 3 assets to other levels of the valuation hierarchy. Refer to Note 4 to the consolidated financial statements for a description of the valuation techniques and inputs used to determine fair values for our financial instruments measured or disclosed at fair value by valuation hierarchy (Levels 1, 2, and 3) as well as a roll-forward of Level 3 financial instruments measured at fair value for the three and six months ended June 30, 2014 and 2013.

Guaranteed living benefits (GLB) derivatives

Under life reinsurance programs covering living benefit guarantees, we assumed the risk of GLBs associated with variable annuity (VA) contracts. We ceased writing this business in 2007. Our GLB reinsurance product meets the definition of a derivative for accounting purposes and is therefore carried at fair value. We believe that the most meaningful presentation of these derivatives is to reflect cash inflows or revenue as net premiums earned, and to record estimates of the average modeled value of future cash outflows as incurred losses. Accordingly, we recognize benefit reserves consistent with the accounting guidance related to accounting and reporting by insurance enterprises for certain non-traditional long-duration contracts and for separate accounts. Changes in the benefit reserves are reflected as Policy benefits expense, which is included in life underwriting income. The incremental difference between fair value and benefit reserves is reflected in Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets and related changes in fair value are reflected in Net realized gains (losses) in the consolidated statement of operations. We intend to hold these derivative contracts to maturity (i.e., the expiration of the underlying liabilities through lapse, annuitization, death, or expiration of the reinsurance contract). To partially offset the risk in the VA guarantee reinsurance portfolio, we invest in derivative hedge instruments. At maturity, the cumulative gains and losses will net to zero (excluding cumulative hedge gains or losses) because, over time, the insurance liability will be increased or decreased to equal our obligation. For a sensitivity discussion of the effect of changes in interest

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rates, equity indices, and other assumptions on the fair value of GLBs, and the resulting impact on our net income, refer to Item 3.

The fair value of GLB reinsurance is estimated using an internal valuation model, which includes current market information and estimates of policyholder behavior from the perspective of a theoretical market participant that would assume these liabilities. All of our treaties contain claim limits, which are factored into the valuation model. The fair value depends on a number of factors, including interest rates, current account value, market volatility, expected annuitization rates and other policyholder behavior, and changes in policyholder mortality. The model and related assumptions are continuously re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of more timely market information, such as market conditions and demographics of in-force annuities. Due to the inherent uncertainties of the assumptions used in the valuation models to determine the fair value of these derivative products, actual experience may differ from the estimates reflected in our consolidated financial statements, and the differences may be material. For further information on the estimates and assumptions used in determining the fair value of GLB reinsurance, refer to Note 4 to the Consolidated Financial Statements of our 2013 Form 10-K.

ACE Tempest Life Re employs a strategy to manage the financial market and policyholder behavior risks embedded in the reinsurance of VA guarantees. Risk management begins with underwriting a prospective client and guarantee design, with particular focus on protecting our position from policyholder options that, because of anti-selective behavior, could adversely impact our obligation.

A second layer of risk management is the structure of the reinsurance contracts. All VA guarantee reinsurance contracts include some form of annual or aggregate claim limit(s) that would reduce our obligation. For further information on the different categories of claim limits, refer to "Guaranteed living benefits derivatives" in our 2013 Form 10-K under Item 7.

A third layer of risk management is the hedging strategy which looks to mitigate both long-term economic loss over time as well as dampen income statement volatility. ACE Tempest Life Re owned financial market instruments as part of the hedging strategy with a fair value liability of $13 million and $54 million at June 30, 2014 and December 31, 2013, respectively. The instruments are substantially collateralized by our counterparties, on a daily basis.

We also limit the aggregate amount of variable annuity reinsurance guarantee risk we are willing to assume. The last substantive U.S. transaction was quoted in mid-2007 and the last transaction in Japan was quoted in late 2007. The aggregate number of policyholders is currently decreasing at a rate of 7 percent – 15 percent per annum due to policyholder lapses, annuitizations, and deaths.

Note that GLB claims cannot occur for any reinsured policy until it has reached the end of its “waiting period”. The majority of policies we reinsure reach the end of their “waiting periods” in 2014 or later, as shown in the table below.

Year of first payment eligibility	Percent of living benefit account values
June 30, 2014 and prior	39	%
Remainder of 2014	8	%
2015	6	%
2016	6	%
2017	20	%
2018	14	%
2019	4	%
2020 and after	3	%
Total	100	%

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The following table presents the historical cash flows under these policies for the periods indicated. The amounts represent accrued past premium received and claims paid, split by benefit type.

	Three Months Ended					Six Months Ended
	June 30					June 30
(in millions of U.S. dollars)	2014		2013			2014		2013
Death Benefits (GMDB)
Premium	$	18	$	20		$	37	$	40
Less paid claims	9		22			21		42
Net	$	9	$	(2	)	$	16	$	(2	)
Living Benefits (Includes GMIB and GMAB)
Premium	$	35	$	37		$	70	$	76
Less paid claims	6		6			8		13
Net	$	29	$	31		$	62	$	63
Total VA Guaranteed Benefits
Premium	$	53	$	57		$	107	$	116
Less paid claims	15		28			29		55
Net	$	38	$	29		$	78	$	61

Death Benefits (GMDB)

For premiums and claims from VA contracts reinsuring GMDBs, at current market levels, we expect approximately $40 million of claims and $66 million of premium on death benefits over the next 12 months.

GLB (includes GMIB and GMAB)

Our GLBs predominantly include premiums and claims from VA contracts reinsuring GMIB and GMAB. More than 60 percent of our living benefit reinsurance clients’ policyholders, measured by account value, are currently ineligible to trigger a claim payment. At current market levels, we expect approximately $5 million of claims and $132 million of premium on living benefits over the next 12 months.

Collateral

ACE Tempest Life Re holds collateral on behalf of most of its clients in the form of qualified assets in trust or letters of credit, typically in an amount sufficient for the client to obtain statutory reserve credit for the reinsurance. The timing of the calculation and amount of the collateral varies by client according to the particulars of the reinsurance treaty and the statutory reserve guidelines of the client’s domicile.

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Catastrophe management

We actively monitor our catastrophe risk accumulation around the world. The table below presents our modeled annual aggregate pre-tax probable maximum loss (PML), net of reinsurance, for 100-year and 250-year return periods for a U.S. hurricane and a California earthquake at June 30, 2014 and 2013. The table also presents ACE’s corresponding share of pre-tax industry losses for each of the return periods for a U.S. hurricane and a California earthquake. For example, according to the model, for the 1-in-100 return period scenario, there is a one percent chance that our losses incurred in any year from a U.S. hurricane could be in excess of $1,745 million (or 5.8 percent of our total shareholders’ equity at June 30, 2014). We estimate that at such hypothetical loss levels, ACE’s share of aggregate industry losses would be approximately 1.1 percent.

	U.S. Hurricane								California Earthquake
			June 30				June 30				June 30				June 30
			2014				2013				2014				2013
Modeled Annual Aggregate Net PML	ACE		% of Total Shareholders’ Equity		% of Industry		ACE		ACE		% of Total Shareholders’ Equity		% of Industry		ACE
(in millions of U.S. dollars, except for percentages)
1-in-100	$	1,745	5.8	%	1.1	%	$	1,714	$	778	2.6	%	1.9	%	$	802
1-in-250	$	2,335	7.7	%	1.0	%	$	2,263	$	1,020	3.4	%	1.6	%	$	1,005

The above modeled loss information reflects our in-force portfolio as of April 1, 2014 and reinsurance program effective at July 1, 2014. Effective July 1, 2014, ACE established a new Global Property Catastrophe Program for our North American and International operations that provided global natural catastrophe and terrorism coverage. Refer to "Natural catastrophe property reinsurance program" for additional information.

The modeling estimates of both ACE and industry loss levels are inherently uncertain owing to key assumptions. First, while the use of third-party catastrophe modeling packages to simulate potential hurricane and earthquake losses is prevalent within the insurance industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate hurricane and earthquake losses. In particular, modeled hurricane and earthquake events are not always a representation of actual events and ensuing additional loss potential. Second, there is no universal standard in the preparation of insured data for use in the models and the running of the modeling software. Third, we are reliant upon third-party estimates of industry insured exposures and there is significant variation possible around the relationship between our loss and that of the industry following an event. Fourth, we assume that our reinsurance recoveries following an event are fully collectible. These loss estimates do not represent our potential maximum exposures and it is highly likely that our actual incurred losses would vary materially from the modeled estimates.

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Natural catastrophe property reinsurance program

ACE’s core property catastrophe reinsurance program provides protection against natural catastrophes impacting its primary property operations (i.e., excluding our Global Reinsurance and Life segments).

We regularly review our reinsurance protection and corresponding property catastrophe exposures. This may or may not lead to the purchase of additional reinsurance prior to a program’s renewal date. In addition, prior to each renewal date, we consider how much, if any, coverage we intend to buy and we may make material changes to the current structure in light of various factors, including modeled PML assessment at various return periods, reinsurance pricing, our risk tolerance and exposures, and various other structuring considerations.

ACE established a new Global Catastrophe Program for our North American and International operations. The program is effective July 1, 2014 through June 30, 2015, and consists of two layers in excess of losses retained by ACE. Approximately 20 percent of the coverage was placed with reinsurers providing upfront collateral equal to the limit of their participation and without a reinstatement. The remaining coverage was placed without upfront collateral and with one additional reinstatement limit in the event of a natural peril loss. In addition, we also purchased terrorism coverage (excluding nuclear, biological, chemical and radiation coverage) for the United States from July 1, 2014 to June 30, 2015 with the same limits and retention

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and percentage placed except that the majority of terrorism coverage is on an aggregate basis above our retentions without a reinstatement.

	Loss Location	Layer of Loss	Comments	Notes
	United States (excluding Alaska and Hawaii)	$0 million - $500 million	Losses retained by ACE	(a)
	United States (excluding Alaska and Hawaii)	$500 million - $1.0 billion	All natural perils, and terrorism (excluding nuclear, biological, chemical and radiation)	(b)
	United States (excluding Alaska and Hawaii)	$1.0 billion - $1.275 billion	All natural perils, and terrorism (excluding nuclear, biological, chemical and radiation)	(c)
	International (including Alaska and Hawaii)	$0 million - $150 million	Losses retained by ACE	(a)
	International (including Alaska and Hawaii)	$150 million - $650 million	All natural perils, and terrorism (excluding nuclear, biological, chemical and radiation)	(b)
	Alaska, Hawaii, and Canada	$650 million - $925 million	All natural perils, and terrorism (excluding nuclear, biological, chemical and radiation)	(c)
(a) Ultimate retention will depend upon the nature of the loss and the interplay between the underlying per risk programs and certain other catastrophe programs purchased by individual business units. These other catastrophe programs have the potential to reduce our effective retention below the stated levels.
(b) These coverages are both part of the same Core layer within the Global Catastrophe Program and are approximately 90% placed with Reinsurers. As such, it may be exhausted in one region and not available in the other.
(c) These coverages are both part of the same Second layer within the Global Catastrophe Program and are approximately 98% placed with Reinsurers. As such, it may be exhausted in one region and not available in the other.

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Crop Insurance

We are, and have been since the 1980s, one of the leading writers of crop insurance in the U.S. and have conducted that business through a managing general agent subsidiary of Rain and Hail. We provide protection throughout the U.S. on a variety of crops and are therefore geographically diversified, which reduces the risk of exposure to a single event or a heavy accumulation of losses in any one region. Our crop insurance business comprises two components – Multiple Peril Crop Insurance (MPCI) and crop-hail insurance.

The MPCI program is offered in conjunction with the U.S. Department of Agriculture (USDA). The policies cover revenue shortfalls or production losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. Generally, policies have deductibles ranging from 10 percent to 50 percent of the insured's risk. The USDA's Risk Management Agency (RMA) sets the policy terms and conditions, rates and forms, and is also responsible for setting compliance standards. As a participating company, we report all details of policies underwritten to the RMA and are party to a Standard Reinsurance Agreement (SRA). The SRA sets out the relationship between private insurance companies and the Federal Crop Insurance Corporation (FCIC) concerning the terms and conditions regarding the risks each will bear including the pro-rata and state stop-loss provisions which allows companies to limit the exposure of any one state or group of states on their underwriting results. In addition to the pro-rata and excess of loss reinsurance protections inherent in the SRA, we also purchase third-party proportional and stop-loss reinsurance for our MPCI business to reduce our exposure. From time to time we may also enter into crop derivative contracts to further manage our risk exposure.

Each year the RMA issues a final SRA for the subsequent reinsurance year. In June 2014, the RMA released the 2015 SRA which establishes the terms and conditions for the 2015 reinsurance year (i.e., July 1, 2014 through June 30, 2015) that replaced the 2014 SRA.  There were no significant changes in the terms and conditions.

On the MPCI business, we recognize net premiums written as soon as estimable, which is generally when we receive acreage reports from the policyholders on the various crops throughout the U.S. This allows us to best determine the premium associated with the liability that is being planted. The MPCI program has specific timeframes as to when producers must report acreage to us and in certain cases, the reporting occurs after the close of the respective reinsurance year. Once the net premium written has been recorded, the premium is then earned over the growing season for the crops. A majority of the crops

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that are covered in the program are typically subject to the SRA in effect at the beginning of the year. Given the major crops covered in the program, we typically see a substantial written and earned premium impact in the second and third quarters.

The pricing of MPCI premium is determined using a number of factors including commodity prices and related volatility. For instance, in most states the pricing for the MPCI Revenue Product for corn includes a factor that is based on the average price in February of the Chicago Board of Trade December corn futures. To the extent that the corn commodity prices are higher in February than they were in the previous February, and all other factors are the same, the increase in corn prices will increase the corn premium year over year.

Our crop-hail program is a private offering. Premium is earned on the crop-hail program over the coverage period of the policy. Given the very short nature of the growing season, most crop-hail business is typically written in the second and third quarters with the earned premium also more heavily occurring during this time frame. We use industry data to develop our own rates and forms for the coverage offered. The policy primarily protects farmers against yield reduction caused by hail and/or fire, and related costs such as transit to storage. We offer various deductibles to allow the grower to partially self-insure for a reduced premium cost. We limit our crop-hail exposures through the use of township liability limits and third-party proportional and stop-loss reinsurance on our net retained hail business.

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Liquidity

We anticipate that positive cash flows from operations (underwriting activities and investment income) should be sufficient to cover cash outflows under most loss scenarios for the near term. In addition to cash from operations, routine sales of investments, and financing arrangements, we have agreements with a third-party bank provider which implemented two international multi-currency notional cash pooling programs to enhance cash management efficiency during periods of short-term timing mismatches between expected inflows and outflows of cash by currency. The programs allow us to optimize investment income by avoiding portfolio disruption. Should the need arise, we generally have access to capital markets and available credit facilities. At June 30, 2014, our available credit lines totaled $1.4 billion and usage of these credit lines was $648 million. Our access to funds under existing credit facilities is dependent on the ability of the banks that are parties to the facilities to meet their funding commitments. Our existing credit facilities have remaining terms expiring between November 2017 and December 2017 and require that we maintain certain financial covenants, all of which we met at June 30, 2014. We did not renew our $500 million bilateral letter of credit facility that expired in June 2014.  We elected instead to satisfy our collateral obligations primarily with insurance trusts supported by our investment portfolio. Should any of our existing credit providers experience financial difficulty, we may be required to replace credit sources, possibly in a difficult market. If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our business, operating results, and financial condition could be adversely affected. To date, we have not experienced difficulty accessing any of our credit facilities. Refer to “Credit Facilities” in our 2013 Form 10-K for additional information.

The payment of dividends or other statutorily permissible distributions from our operating companies are subject to the laws and regulations applicable to each jurisdiction as well as the need to maintain capital levels adequate to support the insurance and reinsurance operations, including financial strength ratings issued by independent rating agencies. During the six months ended June 30, 2014, we were able to meet all of our obligations, including the payments of dividends on our Common Shares, with our net cash flows.

We assess which subsidiaries to draw dividends from based on a number of factors. Considerations such as regulatory and legal restrictions as well as the subsidiary’s financial condition are paramount to the dividend decision. ACE Limited received no dividends from its Bermuda subsidiaries during the six months ended June 30, 2014 and 2013.

The payment of any dividends from AGM or its subsidiaries is subject to applicable U.K. insurance laws and regulations. In addition, the release of funds by Syndicate 2488 to subsidiaries of AGM is subject to regulations promulgated by the Society of Lloyd’s. The U.S. insurance subsidiaries of ACE INA may pay dividends, without prior regulatory approval, subject to restrictions set out in state law of the subsidiary’s domicile (or, if applicable, commercial domicile). ACE INA’s international subsidiaries are also subject to insurance laws and regulations particular to the countries in which the subsidiaries operate. These laws and regulations sometimes include restrictions that limit the amount of dividends payable without prior approval of regulatory insurance authorities. ACE Limited received no dividends from AGM or ACE INA during the six months ended June 30, 2014 and 2013. Debt issued by ACE INA is serviced by statutorily permissible distributions by ACE INA’s insurance subsidiaries to ACE INA as well as other group resources. ACE INA received no dividends from its subsidiaries during the six months ended June 30, 2014 and 2013.

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Cash Flows

Our sources of liquidity include cash from operations, routine sales of investments, and financing arrangements. The following is a discussion of our cash flows for the six months ended June 30, 2014 and 2013.

Operating cash flows were $2.1 billion in the six months ended June 30, 2014, compared with $1.8 billion in the prior year period, primarily due to $569 million of higher net premiums collected, partially offset by higher losses paid of $267 million.

Cash used for investing was $1.5 billion in the six months ended June 30, 2014, compared with $2.4 billion in the prior year period. The decrease in cash flows used for investing activities was primarily due to cash paid for acquisitions in the prior year of $977 million compared with $172 million in the current year. Refer to Note 2 to the Consolidated Financial Statements for additional information on our acquisitions.

Cash used for financing was $625 million in the six months ended June 30, 2014, compared with cash flows from financing of $658 million in the prior year period. Financing cash flows for the six months ended June 30, 2014 included $500 million of repayments of long-term debt, $557 million of share repurchases, and $428 million of dividends paid on Common Shares, partially offset by proceeds from the issuance of long-term debt of $699 million. Cash flows from financing for the six months ended June 30, 2013 included $947 million of proceeds from the issuance of long-term debt, partially offset by $212 million of share repurchases and $169 million of dividends paid on Common Shares. Dividends paid were lower in the prior year due to the accelerated payment of the fourth quarter 2012 dividend in December 2012, which would normally have been paid during the first quarter 2013.

Both internal and external forces influence our financial condition, results of operations, and cash flows. Claim settlements, premium levels, and investment returns may be impacted by changing rates of inflation and other economic conditions. In many cases, significant periods of time, ranging up to several years or more, may lapse between the occurrence of an insured loss, the reporting of the loss to us, and the settlement of the liability for that loss.

In the current low interest rate environment, we use repurchase agreements as a low-cost alternative for short-term funding needs and to address short-term cash timing differences without disrupting our investment portfolio holdings. At June 30, 2014, there were $1.4 billion in repurchase agreements outstanding.

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Capital Resources

Capital resources consist of funds deployed or available to be deployed to support our business operations.

	June 30			December 31
(in millions of U.S. dollars, except for percentages)	2014			2013
Short-term debt	$	1,851		$	1,901
Long-term debt	4,057			3,807
Total debt	5,908			5,708
Trust preferred securities	309			309
Total shareholders’ equity	30,325			28,825
Total capitalization	$	36,542		$	34,842
Ratio of debt to total capitalization	16.2		%	16.4		%
Ratio of debt plus trust preferred securities to total capitalization	17.0		%	17.3		%

In May 2014, we reclassified $450 million of 5.6 percent senior notes, due to mature on May 15, 2015, from Long-term debt to Short-term debt in the consolidated balance sheet.In May 2014, we issued $700 million of 3.35 percent senior notes due May 2024. The proceeds from the debt issuance are expected to be used to repay at maturity the $700 million of 2.6 percent senior notes due November 2015. In June 2014, ACE INA Holdings Inc.'s $500 million of 5.875 percent senior notes matured and were fully paid.

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The following table presents the significant movements in our shareholders’ equity:

	Six Months Ended
(in millions of U.S. dollars)	June 30, 2014
Balance – beginning of period	$	28,825
Net income	1,513
Net unrealized appreciation on investments, net of tax	873
Repurchase of shares	(569		)
Dividends on Common Shares	(479		)
Change in cumulative translation, net of tax	78
Exercise of stock options	48
Other movements, net of tax	36
Balance – end of period	$	30,325

For the six months ended June 30, 2014 and 2013, we repurchased $569 million and $212 million, respectively, of Common Shares in a series of open market transactions under existing Board authorizations. As of June 30, 2014, $1.37 billion in repurchase authorization remained through December 31, 2014. Refer to Note 8 to the Consolidated Financial Statements for additional information on the repurchase authorization. As of June 30, 2014, there were 6,606,823 Common Shares in treasury with a weighted average cost of $95.30 per share. For the period July 1, 2014 through July 29, 2014, we repurchased 1,281,630 Common Shares for a total of $133 million in a series of open market transactions. At July 29, 2014, $1.24 billion in share repurchase authorization remained through December 31, 2014.

We generally maintain the ability to issue certain classes of debt and equity securities via an unlimited Securities and Exchange Commission (SEC) shelf registration which is renewed every three years. This allows us capital market access for refinancing as well as for unforeseen or opportunistic capital needs. Our current shelf registration on file with the SEC expires in December 2014.

Dividends

We have paid dividends each quarter since we became a public company in 1993. Under Swiss law, dividends must be stated in Swiss francs though dividend payments are made by ACE in U.S. dollars. Refer to Note 8 to the Consolidated Financial Statements for a discussion of our dividend methodology. At our May 2013 annual general meeting, our shareholders approved an annual dividend distribution for the following year by way of a par value reduction equal to $2.04 per share, or CHF 1.92 per share, calculated using the USD/CHF exchange rate as published in the Wall Street Journal on May 10, 2013. The annual dividend approved in May 2013 was paid in four quarterly installments, in accordance with the shareholder resolution.

At the January 10, 2014 Extraordinary General Meeting, our shareholders approved a resolution to increase our quarterly dividend 24 percent from $0.51 per share to $0.63 per share for the payment made on January 31, 2014 and April 17, 2014, with the $0.12 per share increase for each installment distributed from capital contribution reserves (and the $0.51 per share distributed by way of par value reduction).

At our May 2014 annual general meeting, our shareholders approved an annual dividend distribution for the following year by way of a par value reduction equal to $2.60 per share, or CHF 2.28 per share, calculated using the USD/CHF exchange rate as published in the Wall Street Journal on May 9, 2014, payable in four quarterly installments.

The following table represents dividends paid per Common Share to shareholders of record on each of the following dates:

Shareholders of record as of:	Dividends paid as of:
January 13, 2014	January 31, 2014	$0.63 (CHF 0.55)
March 28, 2014	April 17, 2014	$0.63 (CHF 0.55)
July 23, 2014	August 13, 2014	$0.65 (CHF 0.58)

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to Item 7A included in our 2013 Form 10-K.

Reinsurance of GMDB and GLB guarantees

Net income is directly impacted by changes in benefit reserves calculated in connection with reinsurance of variable annuity guarantees, primarily GMDB and GLB. Benefit reserves are calculated in accordance with guidance related to accounting and reporting by insurance enterprises for certain non-traditional long-duration contracts and for separate accounts. Changes in benefit reserves are reflected as policy benefits expense, which is included in life underwriting income. In addition, net income is directly impacted by the change in the fair value of the GLB liability (FVL), which is classified as a derivative for accounting purposes. The FVL established for a GLB reinsurance contract represents the difference between the fair value of the contract and the benefit reserves. Changes in the FVL, net of associated changes in the calculated benefit reserves, are reflected as realized gains or losses.

ACE views its variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance with the probability of long-term economic loss relatively small, at the time of pricing. Adverse changes in market factors and policyholder behavior will have an impact on both life underwriting income and net income. When evaluating these risks, we expect to be compensated for taking both the risk of a cumulative long-term economic net loss, as well as the short-term accounting variations caused by these market movements. Therefore, we evaluate this business in terms of its long-term economic risk and reward.

At June 30, 2014, management established benefit reserves based on the benefit ratio calculated using assumptions reflecting management’s best estimate of the future performance of the variable annuity line of business. Management exercises judgment in determining the extent to which short-term market movements impact the benefit reserves. The benefit reserves are based on the calculation of a long-term benefit ratio (or loss ratio) for the variable annuity guarantee reinsurance. Despite the long-term nature of the risk, the benefit ratio calculation is impacted by short-term market movements that may be judged by management to be temporary or transient. Management’s best estimate reflected a judgment that the equity markets will exhibit growth somewhat lower than historical average levels. Management regularly examines both quantitative and qualitative analysis and for the quarter ended June 30, 2014, determined that no change to the benefit ratio was warranted.

The guidance requires us to “regularly evaluate estimates used and adjust the liability balance... if actual experience or other evidence suggests that earlier assumptions should be revised.” ACE evaluates its estimates regularly and management uses judgment to determine the extent to which assumptions underlying the benefit ratio calculation used to establish benefit reserves should be adjusted. The benefit ratio is calculated based on management’s expectation for the short-term and long-term performance of the variable annuity guarantee liability. Management’s quantitative analysis includes a review of the differential between the benefit ratio used at the most recent valuation date and the benefit ratio calculated on subsequent dates.

Benefit reserves and FVL calculations are directly affected by market factors, including equity levels, interest rate levels, credit risk, and implied volatilities, as well as policyholder behaviors, such as annuitization and lapse rates. The tables below assume no changes to the benefit ratio used to establish benefit reserves at June 30, 2014 and show the sensitivity, at June 30, 2014, of the FVL associated with the variable annuity guarantee reinsurance portfolio. In addition, the tables below present the sensitivity of the fair value of specific derivative instruments held (hedge value) to partially offset the risk in the variable annuity guarantee reinsurance portfolio. The tables below are estimates of the sensitivities to instantaneous changes in economic inputs or actuarial assumptions.

The tables below do not reflect the expected quarterly run rate of net income generated by the variable annuity guarantee reinsurance portfolio if markets remain unchanged during the period. All else equal, if markets remain unchanged during the period, the Gross FVL will increase, resulting in a realized loss. The realized loss occurs primarily because, during the period, we will collect premium while paying little or no claims on our GLB reinsurance (since most policies are not eligible to annuitize until after June 30, 2014). This increases the Gross FVL because future premiums are lower by the amount collected in the quarter, and also because future claims are discounted for a shorter period. We refer to this increase in Gross FVL as “timing effect”. The unfavorable impact of timing effect on our Gross FVL in a quarter is not reflected in the sensitivity tables below. For this reason, when using the tables below to estimate the sensitivity of Gross FVL in the third quarter to various changes, it is necessary to assume an additional $5 million to $45 million increase in Gross FVL and realized losses. However, the impact to Net income is substantially mitigated because this realized loss is expected to be exceeded by the positive quarterly run rate of life underwriting income generated by the variable annuity guarantee reinsurance portfolio if markets remain unchanged during

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the period. Note that both the timing effect and the quarterly run rate of life underwriting income change over time as the book ages.

Interest Rate Shock		Worldwide Equity Shock
(in millions of U.S. dollars)		+10%			Flat			-10%			-20%			-30%			-40%
+100 bps	(Increase)/decrease in Gross FVL	$	294		$	186		$	20		$	(251	)	$	(609	)	$	(1,069	)
	Increase/(decrease) in hedge value	(148		)	—			149			300			456			619
	Increase/(decrease) in net income	$	146		$	186		$	169		$	49		$	(153	)	$	(450	)
Flat	(Increase)/decrease in Gross FVL	$	184		$	—		$	(268	)	$	(613	)	$	(1,054	)	$	(1,583	)
	Increase/(decrease) in hedge value	(148		)	—			149			301			457			620
	Increase/(decrease) in net income	$	36		$	—		$	(119	)	$	(312	)	$	(597	)	$	(963	)
-100 bps	(Increase)/decrease in Gross FVL	$	(74	)	$	(335	)	$	(671	)	$	(1,098	)	$	(1,618	)	$	(2,213	)
	Increase/(decrease) in hedge value	(148		)	—			150			302			459			623
	Increase/(decrease) in net income	$	(222	)	$	(335	)	$	(521	)	$	(796	)	$	(1,159	)	$	(1,590	)
Sensitivities to Other Economic Variables		AA-rated Credit Spreads						Interest Rate Volatility						Equity Volatility
(in millions of U.S. dollars)		+100			-100			+2%			-2%			+2%			-2%
(Increase)/decrease in Gross FVL		$	49		$	(53	)	$	(1	)	$	—		$	(22	)	$	20
Increase/(decrease) in hedge value		—			—			—			—			1			(1		)
Increase/(decrease) in net income		$	49		$	(53	)	$	(1	)	$	—		$	(21	)	$	19
Sensitivities to Actuarial Assumptions								Mortality
(in millions of U.S. dollars)								+20%			+10%			-10%			-20%
(Increase)/decrease in Gross FVL								$	20		$	10		$	(10	)	$	(21	)
Increase/(decrease) in hedge value								—			—			—			—
Increase/(decrease) in net income								$	20		$	10		$	(10	)	$	(21	)
								Lapses
(in millions of U.S. dollars)								+50%			+25%			-25%			-50%
(Increase)/decrease in Gross FVL								$	159		$	90		$	(118	)	$	(249	)
Increase/(decrease) in hedge value								—			—			—			—
Increase/(decrease) in net income								$	159		$	90		$	(118	)	$	(249	)
								Annuitization
(in millions of U.S. dollars)								+50%			+25%			-25%			-50%
(Increase)/decrease in Gross FVL								$	(237	)	$	(131	)	$	130		$	227
Increase/(decrease) in hedge value								—			—			—			—
Increase/(decrease) in net income								$	(237	)	$	(131	)	$	130		$	227

The above tables assume equity shocks impact all global equity markets equally and that the interest rate shock is a parallel shift in the U.S. yield curve. Our liabilities are sensitive to global equity markets in the following proportions: 70 percent—80 percent U.S. equity, 10 percent—20 percent international equity ex-Japan, 5 percent—15 percent Japan equity. Our current hedge portfolio is sensitive to global equity markets in the following proportions: 100 percent U.S. equity. We would suggest using the S&P 500 index as a proxy for U.S. equity, the MSCI EAFE index as a proxy for international equity, and the TOPIX as a proxy for Japan equity.

Our liabilities are also sensitive to global interest rates at various points on the yield curve, mainly the U.S. Treasury curve in the following proportions: 0 percent—10 percent short-term rates (maturing in less than 5 years), 20 percent—30 percent medium-term rates (maturing between 5 years and 10 years, inclusive), and 65 percent—75 percent long-term rates (maturing

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beyond 10 years). A change in AA-rated credit spreads (AA-rated credit spreads are a proxy for both our own credit spreads and the credit spreads of the ceding insurers) impacts the rate used to discount cash flows in the fair value model. The hedge sensitivity is from June 30, 2014 market levels.

The above sensitivities are not directly additive because changes in one factor will affect the sensitivity to changes in other factors. Also, the sensitivities do not scale linearly and may be proportionally greater for larger movements in the market factors. Sensitivities may also vary due to foreign exchange rate fluctuations. The calculation of the FVL is based on internal models that include assumptions regarding future policyholder behavior, including lapse, annuitization, and asset allocation. These assumptions impact both the absolute level of the FVL as well as the sensitivities to changes in market factors shown above. Additionally, actual sensitivity of our net income may differ from those disclosed in the tables above due to differences between short-term market movements and management judgment regarding the long-term assumptions implicit in our benefit ratios. Furthermore, the sensitivities above could vary by multiples of the sensitivities in the tables above.

Variable Annuity Net Amount at Risk

The tables below present the net amount at risk at June 30, 2014 following an immediate change in equity market levels, assuming all global equity markets are impacted equally. For further information on the net amount at risk, refer to Note 5 to the Consolidated Financial Statements.

a) Reinsurance covering the GMDB risk only

	Equity Shock
(in millions of U.S. dollars, except percentages)	+20%		Flat		-20%		-40%		-60%		-80%
GMDB net amount at risk	$	427	$	601	$	1,078	$	1,656	$	1,707	$	1,463
Claims at 100% immediate mortality	823		676		386		291		265		241

The treaty claim limits function as a ceiling on the net amount at risk as equity markets fall. In addition, the claims payable if all of the policyholders were to die immediately declines as equity markets fall due to the specific nature of these claim limits, many of which are annual claim limits calculated as a percentage of the reinsured account value. There is also some impact due to a small portion of the GMDB reinsurance under which claims are positively correlated to equity markets (claims decrease as equity markets fall).

b) Reinsurance covering the GLB risk only

	Equity Shock
(in millions of U.S. dollars, except percentages)	+20%		Flat		-20%		-40%		-60%		-80%
GLB net amount at risk	$	64	$	173	$	684	$	1,633	$	2,346	$	2,835

The treaty claim limits cause the net amount at risk to increase at a declining rate as equity markets fall.

c) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders

	Equity Shock
(in millions of U.S. dollars, except percentages)	+20%		Flat		-20%		-40%		-60%		-80%
GMDB net amount at risk	$	44	$	69	$	106	$	146	$	180	$	208
GLB net amount at risk	51		142		478		1,098		1,745		2,273
Claims at 100% immediate mortality	21		64		369		612		821		1,012

The treaty limits control the increase in the GMDB net amount at risk as equity markets fall. The GMDB net amount at risk continues to grow as equity markets fall because most of these reinsurance treaties do not have annual claim limits calculated as a percentage of the underlying account value.

The treaty limits cause the GLB net amount at risk to increase at a declining rate as equity markets fall.

81

ITEM 4. Controls and Procedures

ACE’s management, with the participation of ACE’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of ACE’s disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 as of June 30, 2014. Based upon that evaluation, ACE’s Chief Executive Officer and Chief Financial Officer concluded that ACE’s disclosure controls and procedures are effective in allowing information required to be disclosed in reports filed under the Securities and Exchange Act of 1934 to be recorded, processed, summarized, and reported within time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to ACE’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in ACE’s internal controls over financial reporting during the three months ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect, ACE’s internal controls over financial reporting.

PART II OTHER INFORMATION

ITEM 1. Legal Proceedings

The information required with respect to this item is included in Note 7 e) to the Consolidated Financial Statements which is hereby incorporated by reference.

ITEM 1A. Risk Factors

Refer to “Risk Factors” under Item 1A of Part I of our 2013 Form 10-K. There have been no material changes to the risk factors disclosed in Item 1A of Part I of our 2013 Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities

Issuer’s Repurchases of Equity Securities

The following table provides information with respect to purchases by ACE of its Common Shares during the three months ended June 30, 2014:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan(2)	Approximate Dollar Value of  Shares that May Yet be Purchased  Under the Plan(3)
April 1 through April 30	502,368	$	100.04	501,000	$	1,562	million
May 1 through May 31	733,632	$	102.69	630,000	$	1,497	million
June 1 through June 30	1,175,988	$	104.17	1,175,000	$	1,374	million
Total	2,411,988			2,306,000

⁽¹⁾  This column primarily represents open market share repurchases. Other activity during the three months ended June 30, 2014 is related to the surrender to ACE of Common Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and the exercising of options by employees.

⁽²⁾ The aggregate value of shares purchased in the three months ended June 30, 2014 as part of the publicly announced plan was $237 million.

⁽³⁾  Refer to Note 8 to the Consolidated Financial Statements for more information on the ACE Limited securities repurchase authorization. For the period July 1, 2014 through July 29, 2014, we repurchased 1,281,630 Common Shares for a total of $133 million in a series of open market transactions. At July 29, 2014, $1.24 billion in share repurchase authorization remained through December 31, 2014.

ITEM 6. Exhibits

Refer to the Exhibit Index.

82

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
	(Registrant)
July 30, 2014	/s/ Evan G. Greenberg
	Evan G. Greenberg
	Chairman, President, and Chief Executive Officer
July 30, 2014	/s/ Philip V. Bancroft
	Philip V. Bancroft
	Chief Financial Officer

83

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Original Number	Date Filed	Filed Herewith
3.1	Articles of Association of the Company, as amended and restated	8-K	3	July 24, 2014
3.2	Organizational Regulations of the Company, as amended and restated	8-K	3	August 16, 2013
4.1	Articles of Association of the Company, as amended and restated	8-K	4	July 24, 2014
4.2	Organizational Regulations of the Company, as amended and restated	8-K	4	August 16, 2013
4.3	Form of 3.35 percent Senior Notes due 2024	8-K	4.1	May 27, 2014
31.1	Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002				X
31.2	Certification Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002				X
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002				X
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002				X
101.1	The following financial information from ACE Limited’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 formatted in XBRL: (i) Consolidated Balance Sheets at June 30, 2014, and December 31, 2013; (ii) Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2014 and 2013; (iii) Consolidated Statements of Shareholders’ Equity for the six months ended June 30, 2014 and 2013; (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013; and (v) Notes to Consolidated Financial Statements				X

84

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Evan G. Greenberg, certify that:

1) I have reviewed this quarterly report on Form 10-Q of ACE Limited;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2014

/s/ Evan G. Greenberg

Evan G. Greenberg

Chairman, President, and Chief

Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Philip V. Bancroft, certify that:

1) I have reviewed this quarterly report on Form 10-Q of ACE Limited;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2014

/s/ Philip V. Bancroft

Philip V. Bancroft

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of ACE Limited (the Corporation) hereby certifies that the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, fully complies with the applicable reporting requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)) and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Dated: July 30, 2014	/s/ Evan G. Greenberg
	Evan G. Greenberg Chairman, President, and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of ACE Limited (the Corporation) hereby certifies that the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, fully complies with the applicable reporting requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)) and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Dated: July 30, 2014	/s/ Philip V. Bancroft
	Philip V. Bancroft
	Chief Financial Officer

XML

Fair Value Measurements (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Fair Value Measurements Of Financial Instruments [Line Items]
Level 1 to Level 2 Transfers	$ 0	$ 6	$ 0	$ 19
Level 2 to Level 1 Transfers	0	0	0	0
Guaranteed Living Benefits, Net Income Impact From Model Refinement	$ 1		$ (2)
Redemption Notice Periods Lower Range [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Notice period for redemption for alternative investments investment funds, days			5 days
Redemption Notice Periods Upper Range [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Notice period for redemption for alternative investments investment funds, days			120 days

XML

Segment Information (Net Premiums Earned For Segment By Product) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Property & All Other	$ 1,612	$ 1,509	$ 2,967	$ 2,628
Casualty	1,542	1,454	3,022	2,807
Life, Accident & Health	1,178	1,104	2,313	2,205
Net premiums earned	4,332	4,067	8,302	7,640
Insurance - North American P&C [Member]
Segment Reporting Information [Line Items]
Property & All Other	423	368	828	715
Casualty	1,018	967	1,999	1,869
Life, Accident & Health	101	93	202	182
Net premiums earned	1,542	1,428	3,029	2,766
Insurance - North American Agriculture [Member]
Segment Reporting Information [Line Items]
Property & All Other	330	351	433	403
Casualty	0	0	0	0
Life, Accident & Health	0	0	0	0
Net premiums earned	330	351	433	403
Insurance - Overseas General [Member]
Segment Reporting Information [Line Items]
Property & All Other	727	658	1,420	1,243
Casualty	395	374	764	713
Life, Accident & Health	587	531	1,137	1,066
Net premiums earned	1,709	1,563	3,321	3,022
Global Reinsurance [Member]
Segment Reporting Information [Line Items]
Property & All Other	132	132	286	267
Casualty	129	113	259	225
Net premiums earned	261	245	545	492
Life [Member]
Segment Reporting Information [Line Items]
Life, Accident & Health	490	480	974	957
Net premiums earned	$ 490	$ 480	$ 974	$ 957

XML

Commitments, Contingencies, And Guarantees (Balance Sheet Locations, Fair Values In Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Foreign Exchange Future [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	$ 1,296		$ 1,202
Cross Currency Swap [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	95		50
Futures Contracts On Money Market Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	1,432		3,910
Futures contracts on notes and bonds [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	1,372		871
Convertibles and Bonds with Warrants Attached [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	280	[1]	254	[1]
Investment And Embedded Derivative Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	4,475		6,287
Derivative Instruments Fair Value	342		321
Single-Stock Future [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	1,468	[2]	1,692	[2]
Options On Equity Market Indices [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	250	[2]	250	[2]
Other Derivatives [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	72		8
Other Derivative Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	1,790		1,950
Guaranteed Living Benefits [Member]
Derivatives, Fair Value [Line Items]
Notional Value/Payment Provision	315	[3]	277	[3]
Other Assets [Member] | Foreign Exchange Future [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	2		3
Other Assets [Member] | Futures Contracts On Money Market Instruments [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	2		3
Other Assets [Member] | Futures contracts on notes and bonds [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	5		13
Other Assets [Member] | Single-Stock Future [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	0	[2]	0	[2]
Other Assets [Member] | Options On Equity Market Indices [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	2	[2]	6	[2]
Other Assets [Member] | Other Derivatives [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	16
Other Assets [Member] | Other Derivative Instruments [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	18		6
Other Assets [Member] | Guaranteed Living Benefits [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	0	[3]	0	[3]
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Foreign Exchange Future [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(4)		(4)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Futures Contracts On Money Market Instruments [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	0		0
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Futures contracts on notes and bonds [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(6)		(2)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Convertibles and Bonds with Warrants Attached [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	0	[1]	0	[1]
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Investment And Embedded Derivative Instruments [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(10)		(6)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Single-Stock Future [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(15)	[2]	(60)	[2]
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Options On Equity Market Indices [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	0	[2]	0	[2]
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Other Derivatives [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(2)		(2)
Accounts Payable, Accrued Expenses, And Other Liabilities [Member] | Other Derivative Instruments [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	(17)		(62)
Fixed Maturities Available For Sale [Member] | Convertibles and Bonds with Warrants Attached [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	333	[1]	302	[1]
Accounts Payable Future Policy Benefits [Member] | Guaranteed Living Benefits [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Fair Value	$ (486)	[3]	$ (427)	[3]

[1] (1) Includes fair value of embedded derivatives.

[2] (2) Related to GMDB and GLB blocks of business.

[3] (3) Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

XML

Earnings Per Share (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 779	$ 891	$ 1,513	$ 1,844
Weighted-average shares outstanding	337,846,228	341,047,290	338,353,260	340,913,450
Share-based compensation plans	3,286,359	3,053,975	3,267,499	3,120,263
Adjusted weighted-average shares outstanding and assumed conversions	341,132,587	344,101,265	341,620,759	344,033,713
Basic earnings per share (US$ per share)	$ 2.30	$ 2.61	$ 4.47	$ 5.41
Diluted earnings per share (US$ per share)	$ 2.28	$ 2.59	$ 4.43	$ 5.36
Potential anti-dilutive share conversions	1,778,040	1,811,030	1,220,731	1,231,105

XML

Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Guaranteed Minimum Death Benefit [Member]	Dec. 31, 2013 Guaranteed Minimum Death Benefit [Member]	Jun. 30, 2014 Guaranteed Minimum Income Benefit [Member]	Dec. 31, 2013 Guaranteed Minimum Income Benefit [Member]	Jun. 30, 2013 Guaranteed Minimum Income Benefit [Member]	Mar. 31, 2013 Guaranteed Minimum Income Benefit [Member]	Dec. 31, 2012 Guaranteed Minimum Income Benefit [Member]	Jun. 30, 2014 Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]	Dec. 31, 2013 Guaranteed Minimum Deaths Benefits And Guaranteed Living Benefits [Member]	Jun. 30, 2014 Guaranteed Living Benefits [Member]	Dec. 31, 2013 Guaranteed Living Benefits [Member]
Guaranteed Minimum Benefits [Line Items]
Reported liabilities		$ 107	$ 100	$ 486	$ 427	$ 880	$ 1,000	$ 1,400
Fair value derivative adjustment in liability				241	193
Net amount at risk		601	586								173	136
Mortality percentage according to Annuity 2000 mortality table											100.00%
Discounting assumption used in the calculation of the benefit reserve averaging - lower range		1.50%							3.00%		3.50%
Discounting assumption used in the calculation of the benefit reserve averaging - upper range		2.50%							4.00%		4.50%
Total claim amount payable, if all of the Company's cedants' policyholders covered were to die immediately		676							64
GMBD net amount of risk									69	73
GLB net amount of risk									$ 142	$ 141
Average attained age of all policyholders under all benefits reinsured, years	69 years

XML

Investments (Schedule Of Fixed Maturities By Contractual Maturity) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Available for sale, Due in 1 year or less, Amortized Cost	$ 2,513	$ 2,387
Available for sale, Due after 1 year through 5 years, Amortized Cost	15,095	14,139
Available for sale, Due after 5 years though 10 years, Amortized Cost	15,917	16,200
Available for sale, Due after 10 years, Amortized Cost	5,009	4,743
Available for sale, Subtotal, Amortized Cost	38,534	37,469
Available for sale, Mortgage-backed securities, Amortized Cost	11,185	10,937
Available for sale, Amortized Cost	49,719	48,406
Available for sale, Fair Value	51,601	49,254
Held to maturity, Due in 1 year or less, Amortized Cost	483	401
Held to maturity, Due after 1 year through 5 years, Amortized Cost	2,590	2,284
Held to maturity, Due after 5 years through 10 years, Amortized Cost	1,157	1,686
Held to maturity, Due after 10 years, Amortized Cost	357	386
Held to maturity, Subtotal, Amortized Cost	4,587	4,757
Held to maturity, Mortgage backed securities, Amortized Cost	1,187	1,341
Available for sale, Due in 1 year or less, Fair Value	2,537	2,411
Available for sale, Due after 1 year through 5 years, Fair Value	15,692	14,602
Available for sale, Due after 5 years through 10 years, Fair Value	16,575	16,535
Available for sale, Due after 10 years, Fair Value	5,379	4,812
Available for sale, Subtotal, Fair Value	40,183	38,360
Available for sale, Mortgage backed securities, Fair Value	11,418	10,894
Held to maturity, Due in 1 year or less, Fair Value	489	405
Held to maturity, Due after 1 year through 5, Fair Value	2,693	2,363
Held to maturity, Due after 5 years through 10 years, Fair Value	1,206	1,723
Held to maturity, Due after 10 years, Fair Value	386	393
Held to maturity, Subtotal, Fair Value	4,774	4,884
Held to maturity, Mortgage backed securities, Fair Value	1,241	1,379
Held-to-maturity Securities	5,774	6,098
Held to maturity, Fair Value	$ 6,015	$ 6,263

XML

Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Operations) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013		Jun. 30, 2014	Jun. 30, 2013
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written	$ 4,559	$ 4,391		$ 8,744	$ 8,189
Net premiums earned	4,332	4,067		8,302	7,640
Net investment income	556	534		1,109	1,065
Net realized gains (losses) including OTTI	(73)	104		(177)	310
Losses and loss expenses	2,388	2,250		4,549	4,176
Policy benefits	144	110		258	241
Policy acquisition costs and administrative expenses	1,324	1,229		2,587	2,357
Interest (income) expense	72	73		143	133
Other (income) expense	(25)	37		(42)	27
Income tax expense (benefit)	133	115		226	237
Net income (loss)	779	891		1,513	1,844
Comprehensive income (loss)	1,348	(499)		2,456	217
ACE Limited (Parent Guarantor)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net investment income	1	1		1	1
Equity in earnings of subsidiaries	745	842		1,447	1,756
Net realized gains (losses) including OTTI	0	0		0	12
Policy acquisition costs and administrative expenses	22	12		39	27
Interest (income) expense	(9)	(8)		(19)	(15)
Other (income) expense	(50)	(57)		(92)	(95)
Income tax expense (benefit)	4	5		7	8
Net income (loss)	779	891		1,513	1,844
Comprehensive income (loss)	1,348	(499)		2,456	217
ACE INA Holdings Inc (Subsidiary Issuer)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written	0	0		0	0
Net premiums earned	0	0		0	0
Net investment income	1	1		1	2
Equity in earnings of subsidiaries	231	257		411	445
Net realized gains (losses) including OTTI	8	0		7	0
Losses and loss expenses	0	0		0	0
Policy benefits	0	0		0	0
Policy acquisition costs and administrative expenses	8	5		14	9
Interest (income) expense	70	69		141	131
Other (income) expense	6	6		20	15
Income tax expense (benefit)	(25)	(33)		(55)	(66)
Net income (loss)	181	211		299	358
Comprehensive income (loss)	511	(533)		777	(534)
Other ACE Limited Subsidiaries
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written	4,559	4,391		8,744	8,189
Net premiums earned	4,332	4,067		8,302	7,640
Net investment income	554	532		1,107	1,062
Net realized gains (losses) including OTTI	(81)	104		(184)	298
Losses and loss expenses	2,388	2,250		4,549	4,176
Policy benefits	144	110		258	241
Policy acquisition costs and administrative expenses	1,294	1,212		2,534	2,321
Interest (income) expense	11	12		21	17
Other (income) expense	19	88		30	107
Income tax expense (benefit)	154	143		274	295
Net income (loss)	795	888		1,559	1,843
Comprehensive income (loss)	1,364	(502)		2,502	216
Consolidating Adjustments and Eliminations
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Equity in earnings of subsidiaries	(976)	(1,099)		(1,858)	(2,201)
Net income (loss)	(976)	(1,099)		(1,858)	(2,201)
Comprehensive income (loss)	(1,875)	1,035		(3,279)	318
Scenario, Previously Reported [Member]
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written		4,391			8,189
Net premiums earned		4,067			7,640
Net investment income		534			1,065
Net realized gains (losses) including OTTI		104			310
Losses and loss expenses		2,250			4,176
Policy benefits		110			241
Policy acquisition costs and administrative expenses		1,229			2,357
Interest (income) expense		73			133
Other (income) expense		37			27
Income tax expense (benefit)		115			237
Net income (loss)		891			1,844
Comprehensive income (loss)		(499)			217
Scenario, Previously Reported [Member] | ACE Limited (Parent Guarantor)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net investment income		1			1
Equity in earnings of subsidiaries		842			1,756
Net realized gains (losses) including OTTI		0			12
Policy acquisition costs and administrative expenses		12			27
Interest (income) expense		(8)			(15)
Other (income) expense		(57)			(95)
Income tax expense (benefit)		5			8
Net income (loss)		891			1,844
Comprehensive income (loss)		(499)			217
Scenario, Previously Reported [Member] | ACE INA Holdings Inc (Subsidiary Issuer)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written		2,502			4,584
Net premiums earned		2,331			4,337
Net investment income		254			502
Equity in earnings of subsidiaries		0			0
Net realized gains (losses) including OTTI		28			38
Losses and loss expenses		1,434			2,687
Policy benefits		63			144
Policy acquisition costs and administrative expenses		674			1,300
Interest (income) expense		74			141
Other (income) expense		65			99
Income tax expense (benefit)		92			148
Net income (loss)		211			358
Comprehensive income (loss)		(533)			(534)
Scenario, Previously Reported [Member] | Other ACE Limited Subsidiaries
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net premiums written		1,889	[1]		3,605	[1]
Net premiums earned		1,736	[1]		3,303	[1]
Net investment income		279	[1]		562	[1]
Net realized gains (losses) including OTTI		76	[1]		260	[1]
Losses and loss expenses		816	[1]		1,489	[1]
Policy benefits		47	[1]		97	[1]
Policy acquisition costs and administrative expenses		543	[1]		1,030	[1]
Interest (income) expense		7	[1]		7	[1]
Other (income) expense		29	[1]		23	[1]
Income tax expense (benefit)		18	[1]		81	[1]
Net income (loss)		631	[1]		1,398	[1]
Comprehensive income (loss)		1,375	[1]		2,290	[1]
Scenario, Previously Reported [Member] | Consolidating Adjustments and Eliminations
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Equity in earnings of subsidiaries		(842)	[2]		(1,756)	[2]
Net income (loss)		(842)	[2]		(1,756)	[2]
Comprehensive income (loss)		$ (842)	[2]		$ (1,756)	[2]

[1] (1) Includes all other subsidiaries of ACE Limited and intercompany eliminations.

[2] (2) Includes ACE Limited parent company eliminations.

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Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts (Tables)

6 Months Ended

Jun. 30, 2014

Reinsurance Disclosures [Abstract]

Schedule Of Guaranteed Minimum Death Benefits And Guaranteed Minimum Income Benefits Income And Expense

	Three Months Ended					Six Months Ended
	June 30					June 30
(in millions of U.S. dollars)	2014			2013		2014			2013
GMDB
Net premiums earned	$	18		$	20	$	37		$	40
Policy benefits and other reserve adjustments	$	13		$	25	$	28		$	44
GLB
Net premiums earned	$	34		$	37	$	70		$	76
Policy benefits and other reserve adjustments	10			2		19			11
Net realized gains (losses)	2			101		(48		)	470
Gain recognized in income	$	26		$	136	$	3		$	535
Net cash received	$	29		$	31	$	62		$	63
Net (increase) decrease in liability	$	(3	)	$	105	$	(59	)	$	472

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Commitments, Contingencies, And Guarantees (Narrative) (Detail) (USD $)	3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Carrying value of limited partnerships and partially-owned investment companies included in other investments	$ 2,100,000,000
Funding commitments relating to limited partnerships and partially-owned investment companies	1,000,000,000
Repurchase obligations	1,401,000,000	1,401,000,000
Securities lending payable	1,441,000,000	1,633,000,000
Securities lending collateral	1,440,000,000	1,632,000,000
Unrecognized tax benefits	27,000,000
Derivative liability subject to a master netting agreement	14,000,000	41,000,000
Amount of credit facility not renewed by the company	$ 500,000,000

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Fair Value Measurements (Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013		Dec. 31, 2012
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Valuation Technique					Actuarial model	[1]
Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Significant Unobservable Inputs Lapse rate	1.00%	[1]			1.00%	[1]
Significant Unobservable Inputs Annuitization rate					0.00%	[1]
Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Significant Unobservable Inputs Lapse rate	30.00%	[1]			30.00%	[1]
Significant Unobservable Inputs Annuitization rate					55.00%	[1]
Guaranteed Minimum Income Benefit [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 241	[2]	$ 652	[2]	$ 241	[2]	$ 652	[2]	$ 243	[2]	$ 193	[2]	$ 753	[2]	$ 1,119	[2]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings	(2)	[2]	(101)	[2]	48	[2]	(467)	[2]
Fair Value	241	[1]			241	[1]					193
Short-term Investments [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	0		9		0		9				7		0		0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases			$ 2		$ 0		$ 2

[1] Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

[2] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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Investments (Aggregate Fair Value And Gross Unrealized Loss By Length Of Time Security Has Continuously Been In Unrealized Loss Position) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	$ 3,328	$ 18,228
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(34)	(652)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	7,465	894
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(199)	(63)
Investment securities, Unrealized loss position, Total Fair Value	10,793	19,122
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(233)	(715)
US Treasury and Government [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	0	1,794
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	0	(57)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	1,069	31
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(19)	(6)
Investment securities, Unrealized loss position, Total Fair Value	1,069	1,825
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(19)	(63)
Foreign Government Debt Securities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	1,274	4,621
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(11)	(114)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	1,303	201
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(27)	(8)
Investment securities, Unrealized loss position, Total Fair Value	2,577	4,822
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(38)	(122)
Corporate Securities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	1,118	3,836
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(12)	(118)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	1,050	194
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(24)	(14)
Investment securities, Unrealized loss position, Total Fair Value	2,168	4,030
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(36)	(132)
Collateralized Mortgage Backed Securities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	486	5,248
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(4)	(197)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	2,540	384
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(71)	(31)
Investment securities, Unrealized loss position, Total Fair Value	3,026	5,632
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(75)	(228)
US States and Political Subdivisions Debt Securities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	366	2,164
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(4)	(90)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	1,041	84
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(16)	(4)
Investment securities, Unrealized loss position, Total Fair Value	1,407	2,248
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(20)	(94)
Fixed Maturities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	3,244	17,663
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(31)	(576)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	7,003	894
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(157)	(63)
Investment securities, Unrealized loss position, Total Fair Value	10,247	18,557
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(188)	(639)
Equity Securities [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	45	498
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(2)	(67)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	462	0
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	(42)	0
Investment securities, Unrealized loss position, Total Fair Value	507	498
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	(44)	(67)
Other Long-term Investments [Member]
Investment [Line Items]
Investment securities, Unrealized loss position, 0-12 Months, Fair Value	39	67
Investment securities, Unrealized loss position, 0-12 Months, Gross Unrealized Loss	(1)	(9)
Investment securities, Unrealized loss position, Over 12 Months, Fair Value	0	0
Investment securities, Unrealized loss position, Over 12 Months, Gross Unrealized Loss	0	0
Investment securities, Unrealized loss position, Total Fair Value	39	67
Investment securities, Unrealized loss position, Total Gross Unrealized Loss	$ (1)	$ (9)

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Share-Based Compensation (Detail) (USD $)	6 Months Ended	0 Months Ended
	Jun. 30, 2014	Feb. 27, 2014 Stock Options [Member]	Feb. 27, 2014 Restricted Stock [Member]	Feb. 27, 2014 Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option vesting period in years	3 years
Stock option term in years	10 years
Stock options granted		1,779,074
Weighted-average grant date fair value for stock options granted		$ 18.00
Restricted stock award and units vesting period in years	4 years
Restricted stock awards granted to employees and officers of the company			1,492,290
Restricted stock units awarded to employees and officers of the company				276,992
Grant date fair value of awards except for options granted to employees and officers of the company			$ 96.76	$ 96.76

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Debt (Details) (USD $) In Millions, unless otherwise specified	May 01, 2014 ACE INA Senior Notes Due May 2015 [Member]	May 01, 2014 Senior Notes [Member] ACE INA Senior Notes Due May 2024 [Member]	Jun. 30, 2014 ACE INA Senior Notes Due June 2014 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 700
Debt Instrument, Interest Rate, Stated Percentage	5.60%	3.35%	5.875%
Make Whole Premium Additional Percent		0.15%
Long-term Debt, Current Maturities	$ 450		$ 500

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Consolidated Statements of Cash Flows (Parentheticals) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Consolidated Statements of Cash Flows (Parentheticals) [Abstract]
Cash Acquired from Acquisition	$ 4	$ 38

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Fair Value Measurements (Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013		Dec. 31, 2012
Equity Securities [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	$ 0		$ 7		$ 0		$ 7
Balance- Beginning of Period, Assets	2		2		4		3
Transfers out of Level 3, Assets	0		0		(2)		(1)
Change in Net Unrealized Gains (Losses) included in OCI, Assets	0		(5)		1		(5)
Net Realized Gains/Losses, Assets			4				4
Purchases, Assets	0		1		1		1
Sales, Assets	0		(5)		(2)		(5)
Settlements, Assets			0
Balance-End of Period, Assets	2		4		2		4
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets			0
Short-term Investments [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3			7		0		7
Balance- Beginning of Period, Assets			0		7		0
Transfers out of Level 3, Assets			0		(7)		0
Purchases, Assets			2		0		2
Balance-End of Period, Assets	0		9		0		9
Other Long-term Investments [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0		0		0		0
Balance- Beginning of Period, Assets	2,611		2,328		2,440		2,252
Transfers out of Level 3, Assets			0
Change in Net Unrealized Gains (Losses) included in OCI, Assets	7		13		48		35
Net Realized Gains/Losses, Assets	(3)		(1)		(3)		(2)
Purchases, Assets	152		113		352		249
Sales, Assets	(2)		0		(3)		(9)
Settlements, Assets	(125)		(104)		(194)		(176)
Balance-End of Period, Assets	2,640		2,349		2,640		2,349
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Assets	(3)		(1)		(3)		(2)
Available-for-sale Securities [Member] | Foreign [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	2		29		2		32
Balance- Beginning of Period, Assets	26		35		44		60
Transfers out of Level 3, Assets	(16)		(14)		(34)		(41)
Change in Net Unrealized Gains (Losses) included in OCI, Assets	0		(4)		(1)		(4)
Net Realized Gains/Losses, Assets	1		0		1		1
Purchases, Assets	0		3		2		3
Sales, Assets	(1)		(1)		(2)		(2)
Settlements, Assets	0		0		0		(1)
Balance-End of Period, Assets	12		48		12		48
Available-for-sale Securities [Member] | Corporate Debt Securities [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	26		5		30		17
Balance- Beginning of Period, Assets	151		118		166		102
Transfers out of Level 3, Assets	0		(27)		(22)		(29)
Change in Net Unrealized Gains (Losses) included in OCI, Assets	2		(1)		2		0
Net Realized Gains/Losses, Assets	0		(1)		0		(1)
Purchases, Assets	30		23		45		33
Sales, Assets	(2)		0		(8)		0
Settlements, Assets	(3)		(3)		(9)		(8)
Balance-End of Period, Assets	204		114		204		114
Available-for-sale Securities [Member] | Mortgage Backed-Securities [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0		0		0		0
Balance- Beginning of Period, Assets	8		13		8		13
Transfers out of Level 3, Assets	0		0		0		0
Change in Net Unrealized Gains (Losses) included in OCI, Assets			0
Net Realized Gains/Losses, Assets			0
Purchases, Assets	0		0		0		0
Sales, Assets	0		(3)		0		(3)
Settlements, Assets	(1)		(1)		(1)		(1)
Balance-End of Period, Assets	7		9		7		9
Guaranteed Minimum Income Benefit [Member]
Schedule Of Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	241	[1]	652	[1]	241	[1]	652	[1]	243	[1]	193	[1]	753	[1]	1,119	[1]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings	(2)	[1]	(101)	[1]	48	[1]	(467)	[1]
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date, Liabilities	(2)		(101)		48		(467)
Reported liabilities	$ 486		$ 880		$ 486		$ 880				$ 427		$ 1,000		$ 1,400

[1] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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Information provided in connection with outstanding debt of subsidiaries (Tables)

6 Months Ended

Jun. 30, 2014

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet at June 30, 2014

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	33	$	11	$	63,576	$	—		$	63,620
Cash(1)	44		1		1,026		(477		)	594
Insurance and reinsurance balances receivable	—		—		6,169		(853		)	5,316
Reinsurance recoverable on losses and loss expenses	—		—		19,609		(8,841		)	10,768
Reinsurance recoverable on policy benefits	—		—		1,260		(1,026		)	234
Value of business acquired	—		—		514		—			514
Goodwill and other intangible assets	—		—		5,522		—			5,522
Investments in subsidiaries	30,207		18,946		—		(49,153		)	—
Due from subsidiaries and affiliates, net	305		—		—		(305		)	—
Other assets	4		295		14,300		(3,720		)	10,879
Total assets	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,589	$	(8,412	)	$	37,177
Unearned premiums	—		—		10,154		(1,858		)	8,296
Future policy benefits	—		—		5,804		(1,026		)	4,778
Due to (from) subsidiaries and affiliates, net	—		78		227		(305		)	—
Affiliated notional cash pooling programs(1)	—		477		—		(477		)	—
Short-term debt	—		450		1,401		—			1,851
Long-term debt	—		4,045		12		—			4,057
Trust preferred securities	—		309		—		—			309
Other liabilities	268		1,418		12,112		(3,144		)	10,654
Total liabilities	268		6,777		75,299		(15,222		)	67,122
Total shareholders’ equity	30,325		12,476		36,677		(49,153		)	30,325
Total liabilities and shareholders’ equity	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Balance Sheet at December 31, 2013

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	32	$	10	$	60,886	$	—		$	60,928
Cash(1)	—		16		748		(185		)	579
Insurance and reinsurance balances receivable	—		—		5,835		(809		)	5,026
Reinsurance recoverable on losses and loss expenses	—		—		20,057		(8,830		)	11,227
Reinsurance recoverable on policy benefits	—		—		1,215		(997		)	218
Value of business acquired	—		—		536		—			536
Goodwill and other intangible assets	—		—		5,404		—			5,404
Investments in subsidiaries	28,351		18,105		—		(46,456		)	—
Due from subsidiaries and affiliates, net	844		—		—		(844		)
Other assets	5		258		13,788		(3,459		)	10,592
Total assets	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,714	$	(8,271	)	$	37,443
Unearned premiums	—		—		9,242		(1,703		)	7,539
Future policy benefits	—		—		5,612		(997		)	4,615
Due to (from) subsidiaries and affiliates, net	—		714		130		(844		)	—
Affiliated notional cash pooling programs(1)	185		—		—		(185		)	—
Short-term debt	—		500		1,401		—			1,901
Long-term debt	—		3,795		12		—			3,807
Trust preferred securities	—		309		—		—			309
Other liabilities	222		1,318		11,655		(3,124		)	10,071
Total liabilities	407		6,636		73,766		(15,124		)	65,685
Total shareholders’ equity	28,825		11,753		34,703		(46,456		)	28,825
Total liabilities and shareholders’ equity	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement Of Operations and Comprehensive Income

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,559		$	—		$	4,559
Net premiums earned	—			—			4,332			—			4,332
Net investment income	1			1			554			—			556
Equity in earnings of subsidiaries	745			231			—			(976		)	—
Net realized gains (losses) including OTTI	—			8			(81		)	—			(73		)
Losses and loss expenses	—			—			2,388			—			2,388
Policy benefits	—			—			144			—			144
Policy acquisition costs and administrative expenses	22			8			1,294			—			1,324
Interest (income) expense	(9		)	70			11			—			72
Other (income) expense	(50		)	6			19			—			(25		)
Income tax expense (benefit)	4			(25		)	154			—			133
Net income	$	779		$	181		$	795		$	(976	)	$	779
Comprehensive income	$	1,348		$	511		$	1,364		$	(1,875	)	$	1,348

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,391		$	—		$	4,391
Net premiums earned	—			—			4,067			—			4,067
Net investment income	1			1			532			—			534
Equity in earnings of subsidiaries	842			257			—			(1,099		)	—
Net realized gains (losses) including OTTI	—			—			104			—			104
Losses and loss expenses	—			—			2,250			—			2,250
Policy benefits	—			—			110			—			110
Policy acquisition costs and administrative expenses	12			5			1,212			—			1,229
Interest (income) expense	(8		)	69			12			—			73
Other (income) expense	(57		)	6			88			—			37
Income tax expense (benefit)	5			(33		)	143			—			115
Net income	$	891		$	211		$	888		$	(1,099	)	$	891
Comprehensive loss	$	(499	)	$	(533	)	$	(502	)	$	1,035		$	(499	)

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	2,502		$	1,889	$	—		$	4,391
Net premiums earned	—			2,331			1,736		—			4,067
Net investment income	1			254			279		—			534
Equity in earnings of subsidiaries	842			—			—		(842		)	—
Net realized gains (losses) including OTTI	—			28			76		—			104
Losses and loss expenses	—			1,434			816		—			2,250
Policy benefits	—			63			47		—			110
Policy acquisition costs and administrative expenses	12			674			543		—			1,229
Interest (income) expense	(8		)	74			7		—			73
Other (income) expense	(57		)	65			29		—			37
Income tax expense	5			92			18		—			115
Net income	$	891		$	211		$	631	$	(842	)	$	891
Comprehensive income (loss)	$	(499	)	$	(533	)	$	1,375	$	(842	)	$	(499	)

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,744		$	—		$	8,744
Net premiums earned	—			—			8,302			—			8,302
Net investment income	1			1			1,107			—			1,109
Equity in earnings of subsidiaries	1,447			411			—			(1,858		)	—
Net realized gains (losses) including OTTI	—			7			(184		)	—			(177		)
Losses and loss expenses	—			—			4,549			—			4,549
Policy benefits	—			—			258			—			258
Policy acquisition costs and administrative expenses	39			14			2,534			—			2,587
Interest (income) expense	(19		)	141			21			—			143
Other (income) expense	(92		)	20			30			—			(42		)
Income tax expense (benefit)	7			(55		)	274			—			226
Net income	$	1,513		$	299		$	1,559		$	(1,858	)	$	1,513
Comprehensive income	$	2,456		$	777		$	2,502		$	(3,279	)	$	2,456

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,189	$	—		$	8,189
Net premiums earned	—			—			7,640		—			7,640
Net investment income	1			2			1,062		—			1,065
Equity in earnings of subsidiaries	1,756			445			—		(2,201		)	—
Net realized gains (losses) including OTTI	12			—			298		—			310
Losses and loss expenses	—			—			4,176		—			4,176
Policy benefits	—			—			241		—			241
Policy acquisition costs and administrative expenses	27			9			2,321		—			2,357
Interest (income) expense	(15		)	131			17		—			133
Other (income) expense	(95		)	15			107		—			27
Income tax expense (benefit)	8			(66		)	295		—			237
Net income	$	1,844		$	358		$	1,843	$	(2,201	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	216	$	318		$	217

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	4,584		$	3,605	$	—		$	8,189
Net premiums earned	—			4,337			3,303		—			7,640
Net investment income	1			502			562		—			1,065
Equity in earnings of subsidiaries	1,756			—			—		(1,756		)	—
Net realized gains (losses) including OTTI	12			38			260		—			310
Losses and loss expenses	—			2,687			1,489		—			4,176
Policy benefits	—			144			97		—			241
Policy acquisition costs and administrative expenses	27			1,300			1,030		—			2,357
Interest (income) expense	(15		)	141			7		—			133
Other (income) expense	(95		)	99			23		—			27
Income tax expense	8			148			81		—			237
Net income	$	1,844		$	358		$	1,398	$	(1,756	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	2,290	$	(1,756	)	$	217

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	83		$	(7	)	$	2,020		$	—		$	2,096
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(7,963		)	3			(7,960		)
Purchases of fixed maturities held to maturity	—			—			(129		)	—			(129		)
Purchases of equity securities	—			—			(64		)	—			(64		)
Sales of fixed maturities available for sale	—			—			3,845			(3		)	3,842
Sales of equity securities	—			—			45			—			45
Maturities and redemptions of fixed maturities available for sale	—			—			3,163			—			3,163
Maturities and redemptions of fixed maturities held to maturity	—			—			414			—			414
Net change in short-term investments	(1		)	(1		)	(293		)	—			(295		)
Net derivative instruments settlements	—			(7		)	(178		)	—			(185		)
Acquisition of subsidiaries (net of cash acquired of $4)	—			—			(172		)	—			(172		)
Other	—			(3		)	(115		)	—			(118		)
Net cash flows used for investing activities	(1		)	(11		)	(1,447		)	—			(1,459		)
Cash flows from financing activities
Dividends paid on Common Shares	(428		)	—			—			—			(428		)
Common Shares repurchased	—			—			(557		)	—			(557		)
Proceeds from issuance of long-term debt	—			699			—			—			699
Repayment of long-term debt	—			(500		)	—			—			(500		)
Proceeds from share-based compensation plans, including windfall tax benefits	—			—			75			—			75
Advances (to) from affiliates	575			(667		)	92			—			—
Net proceeds from (payments to) affiliated notional cash pooling programs(1)	(185		)	477			—			(292		)	—
Other	—			(6		)	92			—			86
Net cash flows (used for) from financing activities	(38		)	3			(298		)	(292		)	(625		)
Effect of foreign currency rate changes on cash and cash equivalents	—			—			3			—			3
Net increase (decrease) in cash	44			(15		)	278			(292		)	15
Cash – beginning of period(1)	—			16			748			(185		)	579
Cash – end of period(1)	$	44		$	1		$	1,026		$	(477	)	$	594

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	18		$	(38	)	$	1,828		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(10,907		)	103			(10,804		)
Purchases of fixed maturities held to maturity	—			—			(299		)	—			(299		)
Purchases of equity securities	—			—			(194		)	—			(194		)
Sales of fixed maturities available for sale	—			—			5,499			(103		)	5,396
Sales of equity securities	—			—			62			—			62
Maturities and redemptions of fixed maturities available for sale	—			—			4,112			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			—			908			—			908
Net change in short-term investments	—			3			(140		)	—			(137		)
Net derivative instruments settlements	—			—			(317		)	—			(317		)
Acquisition of subsidiaries (net of cash acquired of $38)	—			—			(977		)	—			(977		)
Capital contribution	(119		)	(1,010		)	—			1,129			—
Other	—			—			(126		)	—			(126		)
Net cash flows used for investing activities	(119		)	(1,007		)	(2,379		)	1,129			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Net proceeds from issuance of long-term debt	—			947			—			—			947
Advances (to) from affiliates	(352		)	352			—			—			—
Net payments to affiliated notional cash pooling programs(1)	513			(253		)	—			(260		)	—
Proceeds from exercise of options for Common Shares	6			—			56			—			62
Capital contribution	—			—			1,129			(1,129		)	—
Other	—			—			30			—			30
Net cash flows from (used for) financing activities	(2		)	1,046			1,003			(1,389		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			—			(26		)	—			(26		)
Net increase (decrease) in cash	(103		)	1			426			(260		)	64
Cash – beginning of period(1)	103			2			859			(349		)	615
Cash – end of period(1)	$	—		$	3		$	1,285		$	(609	)	$	679

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)			Consolidating Adjustments(2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from operating activities	$	95		$	876		$	837		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			(6,604		)	(4,337		)	—			(10,941		)
Purchases of fixed maturities held to maturity	—			(284		)	(15		)	—			(299		)
Purchases of equity securities	—			(161		)	(33		)	—			(194		)
Sales of fixed maturities available for sale	—			3,571			1,825			—			5,396
Sales of equity securities	—			51			11			—			62
Maturities and redemptions of fixed maturities available for sale	—			1,839			2,273			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			613			295			—			908
Net derivative instruments settlements	—			10			(327		)	—			(317		)
Advances to affiliates	(429		)	—			—			429			—
Acquisition of subsidiaries (net of cash acquired of $38)	—			(977		)	—			—			(977		)
Capital contribution	(119		)	—			—			119			—
Other	—			(154		)	28			—			(126		)
Net cash flows used for investing activities	(548		)	(2,096		)	(280		)	548			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Proceeds from issuance of long-term debt	—			947			—			—			947
Proceeds from share-based compensation plans, including windfall tax benefits	6			(4		)	60			—			62
Advances from affiliates	—			352			77			(429		)	—
Capital contribution	—			—			119			(119		)	—
Other	—			30			—			—			30
Net cash flows from (used for) financing activities	(163		)	1,325			44			(548		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			(37		)	11			—			(26		)
Net increase (decrease) in cash	(616		)	68			612			—			64
Cash – beginning of period(3)	103			515			(3		)	—			615
Cash – end of period(3)	$	(513	)	$	583		$	609		$	—		$	679

⁽¹⁾ Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾ Includes ACE Limited parent company eliminations and certain consolidating adjustments.

⁽³⁾ ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

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Earnings per share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share, Basic And Diluted

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars, except share and per share data)	2014		2013		2014		2013
Numerator:
Net income	$	779	$	891	$	1,513	$	1,844
Denominator:
Denominator for basic earnings per share:
Weighted-average shares outstanding	337,846,228		341,047,290		338,353,260		340,913,450
Denominator for diluted earnings per share:
Share-based compensation plans	3,286,359		3,053,975		3,267,499		3,120,263
Weighted-average shares outstanding and assumed conversions	341,132,587		344,101,265		341,620,759		344,033,713
Basic earnings per share	$	2.30	$	2.61	$	4.47	$	5.41
Diluted earnings per share	$	2.28	$	2.59	$	4.43	$	5.36
Potential anti-dilutive share conversions	1,778,040		1,811,030		1,220,731		1,231,105

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Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Balance Sheet) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013		Jun. 30, 2013		Dec. 31, 2012
Condensed Financial Statements, Captions [Line Items]
Investments	$ 63,620		$ 60,928
Cash	594	[1],[2]	579	[1],[3]	679	[4]	615	[4]
Insurance and reinsurance balances receivable	5,316		5,026
Reinsurance recoverable on losses and loss expenses	10,768		11,227
Reinsurance recoverable on policy benefits	234		218
Value of business acquired	514		536
Goodwill and other intangible assets	5,522		5,404
Other assets	10,879		10,592
Total assets	97,447		94,510
Unpaid losses and loss expenses	37,177		37,443
Unearned premiums	8,296		7,539
Future policy benefits	4,778		4,615
Short-term debt	1,851		1,901
Long-term debt	4,057		3,807
Trust preferred securities	309		309
Other liabilities	10,654		10,071
Total liabilities	67,122		65,685
Total shareholders' equity	30,325		28,825		27,295
Total liabilities and shareholders’ equity	97,447		94,510
Scenario, Previously Reported [Member]
Condensed Financial Statements, Captions [Line Items]
Cash					679		615
ACE Limited (Parent Guarantor)
Condensed Financial Statements, Captions [Line Items]
Investments	33		32
Cash	44	[1],[2]	0	[1],[3]	0	[4]	103	[4]
Investments in subsidiaries	30,207		28,351
Due from subsidiaries and affiliates, net	305		844
Other assets	4		5
Total assets	30,593		29,232
Affiliated notional cash pooling programs	0	[2]	185	[3]
Trust preferred securities			0
Other liabilities	268		222
Total liabilities	268		407
Total shareholders' equity	30,325		28,825
Total liabilities and shareholders’ equity	30,593		29,232
ACE Limited (Parent Guarantor) | Scenario, Previously Reported [Member]
Condensed Financial Statements, Captions [Line Items]
Cash					(513)	[5]	103	[5]
ACE INA Holdings Inc (Subsidiary Issuer)
Condensed Financial Statements, Captions [Line Items]
Investments	11		10
Cash	1	[1],[2]	16	[1],[3]	3	[4]	2	[4]
Insurance and reinsurance balances receivable	0		0
Reinsurance recoverable on losses and loss expenses	0		0
Reinsurance recoverable on policy benefits	0		0
Value of business acquired	0		0
Goodwill and other intangible assets	0		0
Investments in subsidiaries	18,946		18,105
Other assets	295		258
Total assets	19,253		18,389
Unpaid losses and loss expenses	0		0
Unearned premiums	0		0
Future policy benefits	0		0
Due to subsidiaries and affiliates, net	78		714
Short-term debt	450		500
Affiliated notional cash pooling programs	477	[2]	0	[3]
Long-term debt	4,045		3,795
Trust preferred securities	309		309
Other liabilities	1,418		1,318
Total liabilities	6,777		6,636
Total shareholders' equity	12,476		11,753
Total liabilities and shareholders’ equity	19,253		18,389
ACE INA Holdings Inc (Subsidiary Issuer) | Scenario, Previously Reported [Member]
Condensed Financial Statements, Captions [Line Items]
Cash					583	[5]	515	[5]
Other ACE Limited Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Investments	63,576		60,886
Cash	1,026	[1],[2]	748	[1],[3]	1,285	[4]	859	[4]
Insurance and reinsurance balances receivable	6,169		5,835
Reinsurance recoverable on losses and loss expenses	19,609		20,057
Reinsurance recoverable on policy benefits	1,260		1,215
Value of business acquired	514		536
Goodwill and other intangible assets	5,522		5,404
Other assets	14,300		13,788
Total assets	111,976		108,469
Unpaid losses and loss expenses	45,589		45,714
Unearned premiums	10,154		9,242
Future policy benefits	5,804		5,612
Due to subsidiaries and affiliates, net	227		130
Short-term debt	1,401		1,401
Affiliated notional cash pooling programs	0	[2]	0	[3]
Long-term debt	12		12
Trust preferred securities			0
Other liabilities	12,112		11,655
Total liabilities	75,299		73,766
Total shareholders' equity	36,677		34,703
Total liabilities and shareholders’ equity	111,976		108,469
Other ACE Limited Subsidiaries | Scenario, Previously Reported [Member]
Condensed Financial Statements, Captions [Line Items]
Cash					609	[5],[6]	(3)	[5],[6]
Consolidating Adjustments and Eliminations
Condensed Financial Statements, Captions [Line Items]
Investments	0		0
Cash	(477)	[1],[2]	(185)	[1],[3]	(609)	[4]	(349)	[4]
Insurance and reinsurance balances receivable	(853)		(809)
Reinsurance recoverable on losses and loss expenses	(8,841)		(8,830)
Reinsurance recoverable on policy benefits	(1,026)		(997)
Value of business acquired	0		0
Goodwill and other intangible assets	0		0
Investments in subsidiaries	(49,153)		(46,456)
Due from subsidiaries and affiliates, net	(305)		(844)
Other assets	(3,720)		(3,459)
Total assets	(64,375)		(61,580)
Unpaid losses and loss expenses	(8,412)		(8,271)
Unearned premiums	(1,858)		(1,703)
Future policy benefits	(1,026)		(997)
Due to subsidiaries and affiliates, net	(305)		(844)
Short-term debt	0		0
Affiliated notional cash pooling programs	(477)	[2]	(185)	[3]
Long-term debt			0
Trust preferred securities			0
Other liabilities	(3,144)		(3,124)
Total liabilities	(15,222)		(15,124)
Total shareholders' equity	(49,153)		(46,456)
Total liabilities and shareholders’ equity	(64,375)		(61,580)
Consolidating Adjustments and Eliminations | Scenario, Previously Reported [Member]
Condensed Financial Statements, Captions [Line Items]
Cash					$ 0	[5],[7]	$ 0	[7]

[1] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[3] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[4] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[5] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[6] Includes all other subsidiaries of ACE Limited and intercompany eliminations.

[7] Includes ACE Limited parent company eliminations and certain consolidating adjustments.

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Fair Value Measurements (Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Financial Instruments Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	$ 6,015	$ 6,263
Partially-owned insurance companies	470	470
Total assets	6,485	6,733
Short-term debt	1,870	1,913
Long-term debt	4,392	4,088
Trust preferred securities	456	438
Total liabilities	6,718	6,439
Financial Instruments Fair Value [Member] | U.S. Treasury And Agency [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	795	832
Financial Instruments Fair Value [Member] | Foreign [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	853	897
Financial Instruments Fair Value [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,929	2,005
Financial Instruments Fair Value [Member] | Collateralized Mortgage Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,241	1,379
Financial Instruments Fair Value [Member] | US States and Political Subdivisions Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,197	1,150
Fair Value, Inputs, Level 1 [Member] | Financial Instruments Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	601	596
Total assets	601	596
Fair Value, Inputs, Level 1 [Member] | Financial Instruments Fair Value [Member] | U.S. Treasury And Agency [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	601	596
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	5,399	5,652
Total assets	5,399	5,652
Short-term debt	1,870	1,913
Long-term debt	4,392	4,088
Trust preferred securities	456	438
Total liabilities	6,718	6,439
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member] | U.S. Treasury And Agency [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	194	236
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member] | Foreign [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	853	897
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,914	1,990
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member] | Collateralized Mortgage Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,241	1,379
Fair Value, Inputs, Level 2 [Member] | Financial Instruments Fair Value [Member] | US States and Political Subdivisions Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,197	1,150
Fair Value, Inputs, Level 3 [Member] | Financial Instruments Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	15	15
Partially-owned insurance companies	470	470
Total assets	485	485
Fair Value, Inputs, Level 3 [Member] | Financial Instruments Fair Value [Member] | U.S. Treasury And Agency [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	0	0
Fair Value, Inputs, Level 3 [Member] | Financial Instruments Fair Value [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	15	15
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	5,774	6,098
Partially-owned insurance companies	470	470
Total assets	6,244	6,568
Short-term debt	1,851	1,901
Long-term debt	4,057	3,807
Trust preferred securities	309	309
Total liabilities	6,217	6,017
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member] | U.S. Treasury And Agency [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	779	820
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member] | Foreign [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	809	864
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,828	1,922
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member] | Collateralized Mortgage Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	1,187	1,341
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Financial Instruments Carrying Value [Member] | US States and Political Subdivisions Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Fixed maturities held to maturity	$ 1,171	$ 1,151

XML

Acquisitions (Detail) (USD $)		1 Months Ended		1 Months Ended
	Jun. 17, 2014	Apr. 30, 2013 Fianzas Monterrey [Member]	Apr. 02, 2013 Fianzas Monterrey [Member]	May 31, 2013 ABA Seguros [Member]	May 02, 2013 ABA Seguros [Member]	Jun. 17, 2014 The Siam Commercial Samaggi Insurance PCL [Member]	Apr. 28, 2014 The Siam Commercial Samaggi Insurance PCL [Member]	Jul. 04, 2014 Large Corporate P&C Business Of Itau Seguros [Member] Subsequent Event [Member]
Business Acquisition [Line Items]
Acquisition purchase price		$ 293,000,000		$ 690,000,000
Business Acquisition, Percentage of Voting Interests Acquired							60.86%
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage						32.17%
Business Acquisition, Purchase Price Allocation, Goodwill Amount			137,000,000		285,000,000		46
Business Acquisition, Purchase Price Allocation, Intangible Assets Other than Goodwill			73,000,000		140,000,000		80
Business Acquisition, Cost of Acquired Entity, Expected Cash Consideration							$ 176,000,000	$ 685,000,000
Business Combination Total Ownership Percentage	93.03%

XML

Investments (Narrative) (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014 Security	Jun. 30, 2013	Jun. 30, 2014 Security	Jun. 30, 2013	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Net unrealized appreciation (depreciation) included in OCI	$ 1,000,000	$ 1,000,000	$ 5,000,000	$ 25,000,000
Net unrealized depreciation included in AOCI	1,000,000		1,000,000		4,000,000
Percentage of mortgage-backed securities represented by investments in US government agency bonds	83.00%		83.00%		83.00%
Credit losses recognized in net income for corporate securities	6,000,000	6,000,000	10,000,000	7,000,000
Credit losses recognized in net income for mortgage-backed securities	0	0
Number of fixed maturities in an unrealized loss position	3,253		3,253
Total number of fixed maturities	25,285		25,285
Largest single unrealized loss in the fixed maturities	3,000,000		3,000,000
Number of equity securities in an unrealized loss position	52		52
Total number of equity securities	186		186
Largest single unrealized loss in the equity securities	42,000,000		42,000,000
Restricted assets in fixed maturities and short-term investments	15,700,000,000		15,700,000,000		16,300,000,000
Restricted assets in cash	$ 84,000,000		$ 84,000,000		$ 162,000,000
Moodys Historical Mean Recovery Rate			42.00%
Company Assumed Recovery Rate			32.00%
Unrealized Loss as a Percentage of Amortized Cost	8.00%		8.00%

XML

Consolidated Statements Of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013
Cash flows from operating activities
Net income	$ 1,513		$ 1,844
Adjustments to reconcile net income to net cash flows from operating activities
Net realized (gains) losses	177		(310)
Amortization of premiums/discounts on fixed maturities	115		134
Deferred income taxes	117		98
Unpaid losses and loss expenses	(493)		(304)
Unearned premiums	594		693
Future policy benefits	139		117
Insurance and reinsurance balances payable	142		182
Accounts payable, accrued expenses, and other liabilities	37		230
Income taxes payable	(56)		20
Insurance and reinsurance balances receivable	(244)		(611)
Reinsurance recoverable on losses and loss expenses	546		538
Reinsurance recoverable on policy benefits	(14)		2
Deferred policy acquisition costs	(228)		(268)
Prepaid reinsurance premiums	(171)		(179)
Other	(78)		(378)
Net cash flows from operating activities	2,096		1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	(7,960)		(10,778)
Purchases of to be announced mortgage-backed securities	0		(26)
Purchases of fixed maturities held to maturity	(129)		(299)
Purchases of equity securities	(64)		(194)
Sales of fixed maturities available for sale	3,842		5,370
Sales of to be announced mortgage-backed securities	0		26
Sales of equity securities	45		62
Maturities and redemptions of fixed maturities available for sale	3,163		4,112
Maturities and redemptions of fixed maturities held to maturity	414		908
Net change in short-term investments	(295)		(137)
Net derivative instruments settlements	(185)		(317)
Acquisition of subsidiaries (net of cash acquired of $4 and $38)	(172)		(977)
Other	(118)		(126)
Net cash flows used for investing activities	(1,459)		(2,376)
Cash flows from financing activities
Dividends paid on Common Shares	(428)		(169)
Common Shares repurchased	(557)		(212)
Proceeds from issuance of long-term debt	699		947
Proceeds from issuance of short-term debt	977		1,570
Repayment of long-term debt	(500)		0
Repayment of short-term debt	(977)		(1,570)
Proceeds from share-based compensation plans, including windfall tax benefits	75		62
Other	86		30
Net cash flows (used for) from financing activities	(625)		658
Effect of foreign currency rate changes on cash and cash equivalents	3		(26)
Net increase in cash	15		64
Cash – beginning of period	579	[1],[2]	615	[3]
Cash – end of period	594	[2],[4]	679	[3]
Supplemental cash flow information
Taxes paid	148		88
Interest paid	$ 134		$ 117

[1] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[3] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[4] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

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Investments (Schedule Of Amortized Cost And Fair Value Of Fixed Maturities And Related Other-Than-Temporary Impairment Recognized In Accumulated Other Comprehensive Income) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investment [Line Items]
Held to maturity, Amortized Cost	$ 5,774	$ 6,098
Held to maturity, Gross Unrealized Appreciation	248	187
Held to maturity, Gross Unrealized Depreciation	(7)	(22)
Held to maturity, Fair Value	6,015	6,263
Held to maturity, OTTI recognized in AOCI
Available for sale, Amortized Cost	49,719	48,406
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	2,063	1,465
Available for sale, Gross Unrealized Depreciation	(181)	(617)
Available for sale, Fair Value	51,601	49,254
Available for sale, OTTI recognized in AOCI	(14)	(40)
U.S. Treasury And Agency [Member]
Investment [Line Items]
Held to maturity, Amortized Cost	779	820
Held to maturity, Gross Unrealized Appreciation	18	16
Held to maturity, Gross Unrealized Depreciation	(2)	(4)
Held to maturity, Fair Value	795	832
Held to maturity, OTTI recognized in AOCI	0	0
Available for sale, Amortized Cost	2,806	2,946
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	80	62
Available for sale, Gross Unrealized Depreciation	(17)	(59)
Available for sale, Fair Value	2,869	2,949
Available for sale, OTTI recognized in AOCI	0	0
Foreign [Member]
Investment [Line Items]
Held to maturity, Amortized Cost	809	864
Held to maturity, Gross Unrealized Appreciation	44	33
Held to maturity, Gross Unrealized Depreciation	0	0
Held to maturity, Fair Value	853	897
Held to maturity, OTTI recognized in AOCI	0	0
Available for sale, Amortized Cost	15,084	14,336
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	563	377
Available for sale, Gross Unrealized Depreciation	(38)	(122)
Available for sale, Fair Value	15,609	14,591
Available for sale, OTTI recognized in AOCI	(1)	0
Corporate Securities [Member]
Investment [Line Items]
Held to maturity, Amortized Cost	1,828	1,922
Held to maturity, Gross Unrealized Appreciation	101	83
Held to maturity, Gross Unrealized Depreciation	0	0
Held to maturity, Fair Value	1,929	2,005
Held to maturity, OTTI recognized in AOCI	0	0
Available for sale, Amortized Cost	17,085	16,825
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	981	777
Available for sale, Gross Unrealized Depreciation	(36)	(132)
Available for sale, Fair Value	18,030	17,470
Available for sale, OTTI recognized in AOCI	(3)	(6)
Mortgage Backed-Securities [Member]
Investment [Line Items]
Held to maturity, Amortized Cost	1,187	1,341
Held to maturity, Gross Unrealized Appreciation	54	39
Held to maturity, Gross Unrealized Depreciation	0	(1)
Held to maturity, Fair Value	1,241	1,379
Held to maturity, OTTI recognized in AOCI	0	0
Available for sale, Amortized Cost	11,185	10,937
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	308	184
Available for sale, Gross Unrealized Depreciation	(75)	(227)
Available for sale, Fair Value	11,418	10,894
Available for sale, OTTI recognized in AOCI	(10)	(34)
States, Municipalities, And Political Subdivisions [Member]
Investment [Line Items]
Held to maturity, Amortized Cost	1,171	1,151
Held to maturity, Gross Unrealized Appreciation	31	16
Held to maturity, Gross Unrealized Depreciation	(5)	(17)
Held to maturity, Fair Value	1,197	1,150
Held to maturity, OTTI recognized in AOCI	0	0
Available for sale, Amortized Cost	3,559	3,362
AvailableforsaleSecuritiesGrossUnrealizedGainAccumulatedInInvestments	131	65
Available for sale, Gross Unrealized Depreciation	(15)	(77)
Available for sale, Fair Value	3,675	3,350
Available for sale, OTTI recognized in AOCI	$ 0	$ 0

XML

Fair Value Measurements (Financial Instruments Measured At Fair Value On Recurring Basis) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	$ 51,601		$ 49,254
Equity securities, at fair value	907		837
Short-term investments	2,108		1,763
Other investments	3,230		2,976
Securities lending collateral	1,440		1,632
Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	1,893		1,849
Equity securities, at fair value	414		373
Short-term investments	1,069		953
Other investments	336		305
Investment derivative instruments, assets	9		19
Other derivative instruments, assets	16		0
Separate account assets	1,349		1,145
Total assets measured at fair value	5,086		4,644
Investment derivative instruments, liabilities	10		6
Other derivative instruments, liability	15		60
GLB	0	[1]	0	[1]
Total liabilities measured at fair value	25		66
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury And Agency [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	1,677		1,626
Fair Value, Inputs, Level 1 [Member] | Foreign [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	216		223
Fair Value, Inputs, Level 1 [Member] | Corporate Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	0		0
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	49,485		47,187
Equity securities, at fair value	491		460
Short-term investments	1,039		803
Other investments	254		231
Securities lending collateral	1,440		1,632
Other derivative instruments, assets	2		6
Separate account assets	88		81
Total assets measured at fair value	52,799		50,400
Investment derivative instruments, liabilities	0		0
Other derivative instruments, liability	2		2
GLB	0	[1]	0	[1]
Total liabilities measured at fair value	2		2
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury And Agency [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	1,192		1,323
Fair Value, Inputs, Level 2 [Member] | Foreign [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	15,381		14,324
Fair Value, Inputs, Level 2 [Member] | Corporate Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	17,826		17,304
Fair Value, Inputs, Level 2 [Member] | Mortgage Backed-Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	11,411		10,886
Fair Value, Inputs, Level 2 [Member] | States, Municipalities, And Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	3,675		3,350
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	223		218
Equity securities, at fair value	2		4
Short-term investments	0		7
Other investments	2,640		2,440
Other derivative instruments, assets	0		0
Total assets measured at fair value	2,865		2,669
Investment derivative instruments, liabilities	0		0
Other derivative instruments, liability	0		0
GLB	241	[1]	193	[1]
Total liabilities measured at fair value	241		193
Fair Value, Inputs, Level 3 [Member] | U.S. Treasury And Agency [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Foreign [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	12		44
Fair Value, Inputs, Level 3 [Member] | Corporate Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	204		166
Fair Value, Inputs, Level 3 [Member] | Mortgage Backed-Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	7		8
Fair Value, Inputs, Level 3 [Member] | States, Municipalities, And Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	0		0
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	51,601		49,254
Equity securities, at fair value	907		837
Short-term investments	2,108		1,763
Other investments	3,230		2,976
Securities lending collateral	1,440		1,632
Investment derivative instruments, assets	9		19
Other derivative instruments, assets	18		6
Separate account assets	1,437		1,226
Total assets measured at fair value	60,750		57,713
Investment derivative instruments, liabilities	10		6
Other derivative instruments, liability	17		62
GLB	241	[1]	193	[1]
Total liabilities measured at fair value	268		261
Estimate of Fair Value, Fair Value Disclosure [Member] | U.S. Treasury And Agency [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	2,869		2,949
Estimate of Fair Value, Fair Value Disclosure [Member] | Foreign [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	15,609		14,591
Estimate of Fair Value, Fair Value Disclosure [Member] | Corporate Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	18,030		17,470
Estimate of Fair Value, Fair Value Disclosure [Member] | Mortgage Backed-Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	11,418		10,894
Estimate of Fair Value, Fair Value Disclosure [Member] | States, Municipalities, And Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Fixed maturities available for sale at fair value	$ 3,675		$ 3,350

[1] Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

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Segment Information (Operations By Segment) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Net premiums written	$ 4,559	$ 4,391	$ 8,744	$ 8,189
Net premiums earned	4,332	4,067	8,302	7,640
Losses and loss expenses	2,388	2,250	4,549	4,176
Policy benefits	144	110	258	241
Policy acquisition costs	758	665	1,486	1,279
Administrative expenses	566	564	1,101	1,078
Underwriting income (loss)	476	478	908	866
Net investment income	556	534	1,109	1,065
Net realized gains (losses) including OTTI	(73)	104	(177)	310
Interest expense	72	73	143	133
(Gains) losses from fair value changes in separate account assets	(17)	11	(11)	7
Other	(8)	26	(31)	20
Other (income) expense	(25)	37	(42)	27
Income tax expense (benefit)	133	115	226	237
Net income (loss)	779	891	1,513	1,844
Insurance - North American P&C [Member]
Segment Reporting Information [Line Items]
Net premiums written	1,635	1,529	3,053	2,813
Net premiums earned	1,542	1,428	3,029	2,766
Losses and loss expenses	1,016	950	1,956	1,828
Policy acquisition costs	152	142	311	285
Administrative expenses	175	159	336	284
Underwriting income (loss)	199	177	426	369
Net investment income	265	250	535	501
Net realized gains (losses) including OTTI	(11)	28	(20)	54
Interest expense	2	3	5	1
Other	(24)	(10)	(44)	(25)
Income tax expense (benefit)	91	91	174	185
Net income (loss)	384	371	806	763
Insurance - North American Agriculture [Member]
Segment Reporting Information [Line Items]
Underwriting Income Including Losses Related to Crop Derivatives	27
Net premiums written	388	453	582	566
Net premiums earned	330	351	433	403
Losses and loss expenses	287	293	413	325
Policy acquisition costs	23	20	28	24
Administrative expenses	1	3	2	8
Underwriting income (loss)	19	35	(10)	46
Net investment income	6	7	13	13
Net realized gains (losses) including OTTI	8	1	6	1
Interest expense	0	0	0	0
Other	9	8	17	16
Income tax expense (benefit)	5	8	(2)	10
Net income (loss)	19	27	(6)	34
Crop Derivative Gain or Loss	8
Insurance - Overseas General [Member]
Segment Reporting Information [Line Items]
Net premiums written	1,760	1,630	3,531	3,250
Net premiums earned	1,709	1,563	3,321	3,022
Losses and loss expenses	830	768	1,647	1,515
Policy acquisition costs	402	360	788	699
Administrative expenses	256	251	506	487
Underwriting income (loss)	221	184	380	321
Net investment income	136	136	268	268
Net realized gains (losses) including OTTI	14	8	4	42
Interest expense	1	2	2	3
Other	8	17	2	16
Income tax expense (benefit)	55	50	92	96
Net income (loss)	307	259	556	516
Global Reinsurance [Member]
Segment Reporting Information [Line Items]
Net premiums written	278	292	586	571
Net premiums earned	261	245	545	492
Losses and loss expenses	109	93	235	199
Policy acquisition costs	60	48	127	96
Administrative expenses	14	12	28	24
Underwriting income (loss)	78	92	155	173
Net investment income	80	71	157	143
Net realized gains (losses) including OTTI	(15)	31	(23)	51
Interest expense	2	1	3	2
Other	(10)	2	(29)	(6)
Income tax expense (benefit)	10	7	20	15
Net income (loss)	141	184	295	356
Life [Member]
Segment Reporting Information [Line Items]
Life underwriting income	89
Net premiums written	498	487	992	989
Net premiums earned	490	480	974	957
Losses and loss expenses	146	145	297	302
Policy benefits	144	110	258	241
Policy acquisition costs	121	95	232	175
Administrative expenses	73	86	141	171
Underwriting income (loss)	6	44	46	68
Net investment income	66	63	130	126
Net realized gains (losses) including OTTI	(72)	36	(148)	163
Interest expense	3	4	6	8
(Gains) losses from fair value changes in separate account assets	(17)	11	(11)	7
Other	4	3	11	3
Income tax expense (benefit)	12	10	22	23
Net income (loss)	(2)	115	0	316
Corporate And Other [Member]
Segment Reporting Information [Line Items]
Losses and loss expenses	0	1	1	7
Policy acquisition costs		0		0
Administrative expenses	47	53	88	104
Underwriting income (loss)	(47)	(54)	(89)	(111)
Net investment income	3	7	6	14
Net realized gains (losses) including OTTI	3	0	4	(1)
Interest expense	64	63	127	119
Other	5	6	12	16
Income tax expense (benefit)	(40)	(51)	(80)	(92)
Net income (loss)	$ (70)	$ (65)	$ (138)	$ (141)

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Investments [Abstract]
Fixed maturities available for sale, at fair value (amortized cost - $49,719 and $48,406) (includes hybrid financial instruments of $305 and $302)	$ 51,601		$ 49,254
Fixed maturities held to maturity, at amortized cost (fair value – $6,015 and $6,263)	5,774		6,098
Equity securities, at fair value (cost – $874 and $841)	907		837
Short-term investments, at fair value and amortized cost	2,108		1,763
Other investments (cost – $2,876 and $2,671)	3,230		2,976
Total investments	63,620		60,928
Cash	594	[1],[2]	579	[1],[3]
Securities lending collateral	1,440		1,632
Accrued investment income	556		556
Insurance and reinsurance balances receivable	5,316		5,026
Reinsurance recoverable on losses and loss expenses	10,768		11,227
Reinsurance recoverable on policy benefits	234		218
Deferred policy acquisition costs	2,562		2,313
Value of business acquired	514		536
Goodwill and other intangible assets	5,522		5,404
Prepaid reinsurance premiums	1,867		1,675
Deferred tax assets	234		616
Investments in partially-owned insurance companies	470		470
Other assets	3,750		3,330
Total assets	97,447		94,510
Liabilities
Unpaid losses and loss expenses	37,177		37,443
Unearned premiums	8,296		7,539
Future policy benefits	4,778		4,615
Insurance and reinsurance balances payable	3,794		3,628
Securities lending payable	1,441		1,633
Accounts payable, accrued expenses, and other liabilities	5,419		4,810
Short-term debt	1,851		1,901
Long-term debt	4,057		3,807
Trust preferred securities	309		309
Total liabilities	67,122		65,685
Commitments and contingencies
Shareholders’ equity
Common Shares (CHF 26.01 and CHF 27.04 par value; 342,832,412 shares issued; 336,225,589 and 339,793,935 shares outstanding)	8,501		8,899
Common Shares in treasury (6,606,823 and 3,038,477 shares)	(630)		(255)
Additional paid-in capital	5,055		5,238
Retained earnings	15,304		13,791
Accumulated other comprehensive income (AOCI)	2,095		1,152
Total shareholders’ equity	30,325		28,825
Total liabilities and shareholders’ equity	$ 97,447		$ 94,510

[1] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[3] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

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Assumed Life Reinsurance Programs Involving Minimum Benefit Guarantees Under Annuity Contracts (Schedule Of Guaranteed Minimum Benefits Income And Expense) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Guaranteed Minimum Benefits [Line Items]
Net premiums earned	$ 4,332	$ 4,067	$ 8,302	$ 7,640
Policy benefits and other reserve adjustments	144	110	258	241
Net realized gains (losses)	(73)	104	(177)	310
Guaranteed Minimum Death Benefit [Member]
Guaranteed Minimum Benefits [Line Items]
Net premiums earned	18	20	37	40
Policy benefits and other reserve adjustments	13	25	28	44
Guaranteed Minimum Income Benefit [Member]
Guaranteed Minimum Benefits [Line Items]
Net premiums earned	34	37	70	76
Policy benefits and other reserve adjustments	10	2	19	11
Net realized gains (losses)	2	101	(48)	470
Gain recognized in income	26	136	3	535
Net cash received	29	31	62	63
Net (increase) decrease in liability	$ (3)	$ 105	$ (59)	$ 472

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Consolidated Statements Of Shareholders' Equity (USD $) In Millions	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Net Unrealized Investment Gain (Loss) [Member]	Accumulated Translation Adjustment [Member]	Accumulated Defined Benefit Plans Adjustment [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance - beginning of period at Dec. 31, 2012		$ 9,591	$ (159)	$ 5,179	$ 10,033	$ 2,633	$ 339	$ (85)
Dividends declared on Common Shares – par value reduction		(342)
Common Shares repurchased			(212)
Net shares redeemed under employee share-based compensation plans			152	(128)
Exercise of stock options				(28)
Share-based compensation expense and other				105
Funding of dividends declared to Retained earnings				0
Net income	1,844				1,844
Funding of dividends declared from Additional paid-in capital					0
Dividends declared on Common Shares					0
Change in period, before reclassification from AOCI, net of income tax (expense) benefit of $(210) and $332						(1,254)
Amounts reclassified from AOCI, net of income tax benefit of $2 and $12						(61)
Change in period, net of income tax (expense) benefit of $(208) and $344						(1,315)
Change in period, net of income tax (expense) benefit of $(42) and $62							(324)
Change in period, net of income tax (expense) benefit of $5 and $(7)								12
Balance - end of period at Jun. 30, 2013	27,295	9,249	(219)	5,128	11,877	1,318	15	(73)	1,260
Balance - beginning of period at Dec. 31, 2013	28,825	8,899	(255)	5,238	13,791	1,174	63	(85)
Dividends declared on Common Shares – par value reduction		(398)
Common Shares repurchased			(569)
Net shares redeemed under employee share-based compensation plans			194	(169)
Exercise of stock options				(33)
Share-based compensation expense and other				100
Funding of dividends declared to Retained earnings				(81)
Net income	1,513				1,513
Funding of dividends declared from Additional paid-in capital					81
Dividends declared on Common Shares					(81)
Change in period, before reclassification from AOCI, net of income tax (expense) benefit of $(210) and $332						898
Amounts reclassified from AOCI, net of income tax benefit of $2 and $12						(25)
Change in period, net of income tax (expense) benefit of $(208) and $344						873
Change in period, net of income tax (expense) benefit of $(42) and $62							78
Change in period, net of income tax (expense) benefit of $5 and $(7)								(8)
Balance - end of period at Jun. 30, 2014	$ 30,325	$ 8,501	$ (630)	$ 5,055	$ 15,304	$ 2,047	$ 141	$ (93)	$ 2,095

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Investments (Net Realized Gains (Losses) And Losses Included In Net Realized Gains (Losses) And Other Comprehensive Income) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]
OTTI on fixed maturities, gross	$ (9)	$ (6)	$ (15)	$ (7)
OTTI on fixed maturities recognized in OCI (pre-tax)	1	0	2	0
OTTI on fixed maturities, net	(8)	(6)	(13)	(7)
Fixed maturities, Gross realized gains excluding OTTI	54	64	90	126
Fixed maturities, Gross realized losses excluding OTTI	(26)	(27)	(46)	(52)
Total fixed maturities	20	31	31	67
OTTI on equity securities	(1)	0	(7)	(1)
Equity securities, Gross realized gains excluding OTTI	2	8	4	10
Equity securities, Gross realized losses excluding OTTI	0	(1)	(1)	(3)
Total equity securities	1	7	(4)	6
OTTI on other investments	(3)	(1)	(3)	(2)
Foreign exchange gains (losses)	(14)	(5)	(23)	71
Investment and embedded derivative instruments	(15)	40	(40)	58
Fair value adjustments on insurance derivative	2	101	(46)	429
S&P put options and futures	(72)	(68)	(91)	(318)
Other derivative instruments	9	(1)	7	(1)
Other	(1)	0	(8)	0
Total net realized gains (losses)	$ (73)	$ 104	$ (177)	$ 310

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General (Policies)

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE Limited and its subsidiaries (collectively, ACE, we, us, or our), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions have been eliminated.

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2013 Form 10-K.

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Investments (Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which Portion Of Other-Than-Temporary Impairment Was Recognized In Other Comprehensive Income) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which Portion Of Other-Than-Temporary Impairment Was Recognized In Other Comprehensive Income [Roll Forward]
Balance of credit losses related to securities still held – beginning of period	$ 35	$ 35	$ 37	$ 43
Additions where no OTTI was previously recorded	5	4	7	4
Additions where an OTTI was previously recorded	1	2	3	3
Reductions for securities sold during the period	(17)	(1)	(23)	(10)
Balance of credit losses related to securities still held – end of period	$ 24	$ 40	$ 24	$ 40

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Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Financial Instruments Measured At Fair Value On A Recurring Basis

June 30, 2014	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,677	$	1,192	$	—	$	2,869
Foreign	216		15,381		12		15,609
Corporate securities	—		17,826		204		18,030
Mortgage-backed securities	—		11,411		7		11,418
States, municipalities, and political subdivisions	—		3,675		—		3,675
	1,893		49,485		223		51,601
Equity securities	414		491		2		907
Short-term investments	1,069		1,039		—		2,108
Other investments	336		254		2,640		3,230
Securities lending collateral	—		1,440		—		1,440
Investment derivative instruments	9		—		—		9
Other derivative instruments	16		2		—		18
Separate account assets	1,349		88		—		1,437
Total assets measured at fair value	$	5,086	$	52,799	$	2,865	$	60,750
Liabilities:
Investment derivative instruments	$	10	$	—	$	—	$	10
Other derivative instruments	15		2		—		17
GLB(1)	—		—		241		241
Total liabilities measured at fair value	$	25	$	2	$	241	$	268

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

December 31, 2013	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,626	$	1,323	$	—	$	2,949
Foreign	223		14,324		44		14,591
Corporate securities	—		17,304		166		17,470
Mortgage-backed securities	—		10,886		8		10,894
States, municipalities, and political subdivisions	—		3,350		—		3,350
	1,849		47,187		218		49,254
Equity securities	373		460		4		837
Short-term investments	953		803		7		1,763
Other investments	305		231		2,440		2,976
Securities lending collateral	—		1,632		—		1,632
Investment derivative instruments	19		—		—		19
Other derivative instruments	—		6		—		6
Separate account assets	1,145		81		—		1,226
Total assets measured at fair value	$	4,644	$	50,400	$	2,669	$	57,713
Liabilities:
Investment derivative instruments	$	6	$	—	$	—	$	6
Other derivative instruments	60		2		—		62
GLB(1)	—		—		193		193
Total liabilities measured at fair value	$	66	$	2	$	193	$	261

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

Schedule Of Fair Value Transfers Between Level 1 and Level 2 [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars)	2014		2013		2014		2013
Transfers from Level 1 to Level 2	$	—	$	6	$	—	$	19
Transfers from Level 2 to Level 1	—		—		—		—

Fair Value And Maximum Future Funding Commitments Related To Investments

				June 30				December 31
	Expected Liquidation Period of Underlying Assets			2014				2013
(in millions of U.S. dollars)		Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
Financial	5 to 9 Years	$	274	$	119	$	256	$	129
Real estate	3 to 9 Years	322		63		322		92
Distressed	6 to 9 Years	265		145		180		230
Mezzanine	6 to 9 Years	303		222		276		252
Traditional	3 to 8 Years	923		448		813		456
Vintage	1 to 3 Years	11		—		13		—
Investment funds	Not Applicable	385		—		428		—
		$	2,483	$	997	$	2,288	$	1,159

Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations

(in millions of U.S. dollars, except for percentages)	Fair Value				Valuation Technique	Significant Unobservable Inputs	Ranges
	June 30, 2014		December 31, 2013
GLB(1)	$	241	$	193	Actuarial model	Lapse rate	1% – 30%
						Annuitization rate	0% – 55%

⁽¹⁾  Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs

	Assets														Liabilities
Three Months Ended	Available-for-Sale Debt Securities									Equity securities		Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	26		$	151		$	8		$	2	$	2,611		$	243
Transfers into Level 3	2			26			—			—		—			—
Transfers out of Level 3	(16		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	—			2			—			—		7			—
Net Realized Gains/Losses	1			—			—			—		(3		)	(2		)
Purchases	—			30			—			—		152			—
Sales	(1		)	(2		)	—			—		(2		)	—
Settlements	—			(3		)	(1		)	—		(125		)	—
Balance–End of Period	$	12		$	204		$	7		$	2	$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—	$	(3	)	$	(2	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Three Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	35		$	118		$	13		$	2		$	—	$	2,328		$	753
Transfers into Level 3	29			5			—			7			7		—			—
Transfers out of Level 3	(14		)	(27		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	(1		)	—			(5		)	—		13			—
Net Realized Gains/Losses	—			(1		)	—			4			—		(1		)	(101		)
Purchases	3			23			—			1			2		113			—
Sales	(1		)	—			(3		)	(5		)	—		—			—
Settlements	—			(3		)	(1		)	—			—		(104		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(1	)	$	(101	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.0 billion at March 31, 2013, which includes a fair value derivative adjustment of $652 million and $753 million, respectively.

	Assets																		Liabilities
Six Months Ended	Available-for-Sale Debt Securities									Equity securities			Short-term investments			Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	44		$	166		$	8		$	4		$	7		$	2,440		$	193
Transfers into Level 3	2			30			—			—			—			—			—
Transfers out of Level 3	(34		)	(22		)	—			(2		)	(7		)	—			—
Change in Net Unrealized Gains (Losses) included in OCI	(1		)	2			—			1			—			48			—
Net Realized Gains/Losses	1			—			—			—			—			(3		)	48
Purchases	2			45			—			1			—			352			—
Sales	(2		)	(8		)	—			(2		)	—			(3		)	—
Settlements	—			(9		)	(1		)	—			—			(194		)	—
Balance–End of Period	$	12		$	204		$	7		$	2		$	—		$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	(3	)	$	48

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Six Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	60		$	102		$	13		$	3		$	—	$	2,252		$	1,119
Transfers into Level 3	32			17			—			7			7		—			—
Transfers out of Level 3	(41		)	(29		)	—			(1		)	—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	—			—			(5		)	—		35			—
Net Realized Gains/Losses	1			(1		)	—			4			—		(2		)	(467		)
Purchases	3			33			—			1			2		249			—
Sales	(2		)	—			(3		)	(5		)	—		(9		)	—
Settlements	(1		)	(8		)	(1		)	—			—		(176		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(2	)	$	(467	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.4 billion at December 31, 2012, which includes a fair value derivative adjustment of $652 million and $1.1 billion, respectively.

Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value

June 30, 2014	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	601	$	194	$	—	$	795	$	779
Foreign	—		853		—		853		809
Corporate securities	—		1,914		15		1,929		1,828
Mortgage-backed securities	—		1,241		—		1,241		1,187
States, municipalities, and political subdivisions	—		1,197		—		1,197		1,171
	601		5,399		15		6,015		5,774
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	601	$	5,399	$	485	$	6,485	$	6,244
Liabilities:
Short-term debt	$	—	$	1,870	$	—	$	1,870	$	1,851
Long-term debt	—		4,392		—		4,392		4,057
Trust preferred securities	—		456		—		456		309
Total liabilities	$	—	$	6,718	$	—	$	6,718	$	6,217

December 31, 2013	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	596	$	236	$	—	$	832	$	820
Foreign	—		897		—		897		864
Corporate securities	—		1,990		15		2,005		1,922
Mortgage-backed securities	—		1,379		—		1,379		1,341
States, municipalities, and political subdivisions	—		1,150		—		1,150		1,151
	596		5,652		15		6,263		6,098
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	596	$	5,652	$	485	$	6,733	$	6,568
Liabilities:
Short-term debt	$	—	$	1,913	$	—	$	1,913	$	1,901
Long-term debt	—		4,088		—		4,088		3,807
Trust preferred securities	—		438		—		438		309
Total liabilities	$	—	$	6,439	$	—	$	6,439	$	6,017

XML

Consolidated Statements Of Shareholders' Equity (Parenthetical) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Net unrealized appreciation on investments, Change in period, income tax (expense) benefit	$ (208)	$ 344
Cumulative translation adjustment, Change in period, income tax(expense) benefit	(42)	62
Pension liability adjustment, Change in period, income tax (expense) benefit	5	(7)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Unrealized appreciation on investments, Change in period before reclassification to AOCI, income tax (expense) benefit	25	61
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member]
Unrealized appreciation on investments, Change in period before reclassification to AOCI, income tax (expense) benefit	2	12
Income tax expense from reclassification of unrealized gains	$ (210)	$ 332

XML

Consolidated Balance Sheets (Parenthetical) In Millions, except Share data, unless otherwise specified	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CHF	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CHF
Statement of Financial Position [Abstract]
Fixed maturities available for sale, at amortized cost	$ 49,719		$ 48,406
Fixed maturities available for sale, hybrid financial instruments	305		302
Fixed maturities held to maturity, at amortized cost	6,015		6,263
Equity securities, at cost	874		841
Other investments, cost	$ 2,876		$ 2,671
Common Shares, par value		26.01		27.04
Common Shares, shares issued	342,832,412	342,832,412	342,832,412	342,832,412
Common Shares, shares outstanding	336,225,589	336,225,589	339,793,935	339,793,935
Common Shares in treasury, shares	6,606,823	6,606,823	3,038,477	3,038,477

XML

Shareholders' equity

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Shareholders' equity

Shareholders’ equity

All of ACE’s Common Shares are authorized under Swiss corporate law. Though the par value of Common Shares is stated in Swiss francs, ACE continues to use U.S. dollars as its reporting currency for preparing consolidated financial statements. Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value reduction) or from legal reserves, must be stated in Swiss francs though dividend payments are made by ACE in U.S. dollars. At our May 2013 and May 2014 annual general meetings, our shareholders approved a dividend for the following year, respectively, payable in four quarterly installments after the annual general meetings in the form of a distribution by way of a par value reduction. At the January 10, 2014 Extraordinary General Meeting, our shareholders approved a resolution to increase our quarterly dividend from $0.51 per share to $0.63 per share for the final two quarterly installments (made on January 31, 2014 and April 17, 2014) that had been earlier approved at our 2013 annual general meeting. The $0.12 per share increase for each installment was distributed from capital contribution reserves (Additional paid-in capital), a subaccount of legal reserves, and transferred to free reserves (Retained earnings) for payment, while the existing $0.51 per share was distributed by way of a par value reduction.

For the three and six months endedJune 30, 2014, dividends per Common Share amounted to CHF 0.58 ($0.65) and CHF 1.23 ($1.40), respectively. For the six months ended June 30, 2014, dividends included a distribution from capital contribution reserves of CHF 0.20 ($0.24). Par value reductions have been reflected as such through Common Shares in the consolidated statements of shareholders' equity and had the effect of reducing par value per Common Share to CHF 26.01 at June 30, 2014.

For the three and six months endedJune 30, 2013, dividends per Common Share amounted to CHF 0.48 ($0.51) and CHF 0.94 ($1.00).

Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, grants of restricted stock, and purchases under the Employee Stock Purchase Plan (ESPP). At June 30, 2014, 6,606,823 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans.

ACE Limited securities repurchase authorization

For the three and six months endedJune 30, 2014, ACE repurchased 2,306,000 and 5,793,882 Common Shares for a cost of $237 million and $569 million, respectively, in a series of open market transactions under the November 2013 Board authorization of a share repurchase program of up to $2.0 billion of ACE's Common Shares through December 31, 2014. At June 30, 2014, $1.37 billion in share repurchase authorization remained through December 31, 2014 pursuant to the Board authorization. For the period July 1, 2014 through July 29, 2014, ACE repurchased 1,281,630 Common Shares for a total of $133 million in a series of open market transactions. At July 29, 2014, $1.24 billion in share repurchase authorization remained through December 31, 2014.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 16, 2014
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	ACE
Entity Registrant Name	ACE Ltd
Entity Central Index Key	0000896159
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		335,698,995

XML

Share-based compensation

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based compensation

Share-based compensation

The ACE Limited 2004 Long-Term Incentive Plan (the 2004 LTIP) permits grants of both incentive and non-qualified stock options principally at an option price per share equal to the grant date fair value of ACE’s Common Shares. Stock options are generally granted with a 3-year vesting period and a 10-year term. Stock options typically vest in equal annual installments over the vesting period, which is also the requisite service period. On February 27, 2014, ACE granted 1,779,074 stock options with a weighted-average grant date fair value of $18.00 each. The fair value of the options issued is estimated on the date of grant using the Black-Scholes option pricing model.

The 2004 LTIP also permits grants of restricted stock and restricted stock units. ACE generally grants restricted stock and restricted stock units with a 4-year vesting period, based on a graded vesting schedule. The restricted stock is granted at market close price on the grant date. On February 27, 2014, ACE granted 1,492,290 restricted stock awards and 276,992 restricted stock units to employees and officers with a grant date fair value of $96.76 each. Each restricted stock unit represents our obligation to deliver to the holder one Common Share upon vesting.

XML

Consolidated Statements Of Operations and Comprehensive Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues
Net premiums written	$ 4,559	$ 4,391	$ 8,744	$ 8,189
Increase in unearned premiums	(227)	(324)	(442)	(549)
Net premiums earned	4,332	4,067	8,302	7,640
Net investment income	556	534	1,109	1,065
Net realized gains (losses):
Other-than-temporary impairment (OTTI) losses gross	(13)	(7)	(25)	(10)
Portion of OTTI losses recognized in other comprehensive income (OCI)	1	0	2	0
Net OTTI losses recognized in income	(12)	(7)	(23)	(10)
Net realized gains (losses) excluding OTTI losses	(61)	111	(154)	320
Total net realized gains (losses)	(73)	104	(177)	310
Total revenues	4,815	4,705	9,234	9,015
Expenses
Losses and loss expenses	2,388	2,250	4,549	4,176
Policy benefits	144	110	258	241
Policy acquisition costs	758	665	1,486	1,279
Administrative expenses	566	564	1,101	1,078
Interest expense	72	73	143	133
Other (income) expense	(25)	37	(42)	27
Total expenses	3,903	3,699	7,495	6,934
Income before income tax	912	1,006	1,739	2,081
Income tax expense (includes $5, $7, $2, and $12 of reclassified unrealized gains)	133	115	226	237
Net income	779	891	1,513	1,844
Other comprehensive income (loss)
Unrealized appreciation (depreciation)	589	(1,470)	1,108	(1,586)
Reclassification adjustment for net realized gains included in net income	(21)	(38)	(27)	(73)
Unrealized appreciation (Depreciation) after reclassification adjustment	568	(1,508)	1,081	(1,659)
Change in:
Cumulative translation adjustment	153	(175)	120	(386)
Pension liability	(5)	(3)	(13)	19
Other comprehensive income (loss), before income tax	716	(1,686)	1,188	(2,026)
Income tax (expense) benefit related to OCI items	(147)	296	(245)	399
Other comprehensive income (loss)	569	(1,390)	943	(1,627)
Comprehensive income (loss)	1,348	(499)	2,456	217
Earnings per share
Basic earnings per share	$ 2.30	$ 2.61	$ 4.47	$ 5.41
Diluted earnings per share	$ 2.28	$ 2.59	$ 4.43	$ 5.36
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member]
Net realized gains (losses):
Total net realized gains (losses)	21	38	27	73
Expenses
Income tax expense (includes $5, $7, $2, and $12 of reclassified unrealized gains)	$ 5	$ 7	$ 2	$ 12

XML

Investments

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

a) Fixed maturities

June 30, 2014	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,806	$	80	$	(17	)	$	2,869	$	—
Foreign	15,084		563		(38		)	15,609		(1		)
Corporate securities	17,085		981		(36		)	18,030		(3		)
Mortgage-backed securities	11,185		308		(75		)	11,418		(10		)
States, municipalities, and political subdivisions	3,559		131		(15		)	3,675		—
	$	49,719	$	2,063	$	(181	)	$	51,601	$	(14	)
Held to maturity
U.S. Treasury and agency	$	779	$	18	$	(2	)	$	795	$	—
Foreign	809		44		—			853		—
Corporate securities	1,828		101		—			1,929		—
Mortgage-backed securities	1,187		54		—			1,241		—
States, municipalities, and political subdivisions	1,171		31		(5		)	1,197		—
	$	5,774	$	248	$	(7	)	$	6,015	$	—

December 31, 2013	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,946	$	62	$	(59	)	$	2,949	$	—
Foreign	14,336		377		(122		)	14,591		—
Corporate securities	16,825		777		(132		)	17,470		(6		)
Mortgage-backed securities	10,937		184		(227		)	10,894		(34		)
States, municipalities, and political subdivisions	3,362		65		(77		)	3,350		—
	$	48,406	$	1,465	$	(617	)	$	49,254	$	(40	)
Held to maturity
U.S. Treasury and agency	$	820	$	16	$	(4	)	$	832	$	—
Foreign	864		33		—			897		—
Corporate securities	1,922		83		—			2,005		—
Mortgage-backed securities	1,341		39		(1		)	1,379		—
States, municipalities, and political subdivisions	1,151		16		(17		)	1,150		—
	$	6,098	$	187	$	(22	)	$	6,263	$	—

As discussed in Note 3c), if a credit loss is indicated on an impaired fixed maturity, an OTTI is considered to have occurred and the portion of the impairment not related to credit losses (non-credit OTTI) is recognized in OCI. Included in the “OTTI Recognized in AOCI” columns above are the cumulative amounts of non-credit OTTI recognized in OCI adjusted for subsequent sales, maturities, and redemptions. OTTI recognized in AOCI does not include the impact of subsequent changes in fair value of the related securities. In periods subsequent to a recognition of OTTI in OCI, changes in the fair value of the related fixed maturities are reflected in Unrealized appreciation (depreciation) in the consolidated statement of shareholders’ equity. For the three and six months endedJune 30, 2014, $1 million and $5 million, respectively, of net unrealized appreciation related to such securities is included in OCI. For the three and six months endedJune 30, 2013, $1 million and $25 million, respectively, of net unrealized appreciation related to such securities is included in OCI. At June 30, 2014 and December 31, 2013, AOCI includes cumulative net unrealized depreciation of $1 million and $4 million, respectively, related to securities remaining in the investment portfolio at those dates for which ACE has recognized a non-credit OTTI.

Mortgage-backed securities (MBS) issued by U.S. government agencies are combined with all other to be announced mortgage derivatives held (refer to Note 7 a) (iv)) and are included in the category, “Mortgage-backed securities”. Approximately 83 percent of the total mortgage-backed securities at June 30, 2014 and December 31, 2013 are represented by investments in U.S. government agency bonds. The remainder of the mortgage exposure consists of collateralized mortgage obligations and non-government mortgage-backed securities, the majority of which provide a planned structure for principal and interest payments and carry a rating of AAA by the major credit rating agencies.

The following table presents fixed maturities by contractual maturity:

			June 30				December 31
			2014				2013
(in millions of U.S. dollars)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Due in 1 year or less	$	2,513	$	2,537	$	2,387	$	2,411
Due after 1 year through 5 years	15,095		15,692		14,139		14,602
Due after 5 years through 10 years	15,917		16,575		16,200		16,535
Due after 10 years	5,009		5,379		4,743		4,812
	38,534		40,183		37,469		38,360
Mortgage-backed securities	11,185		11,418		10,937		10,894
	$	49,719	$	51,601	$	48,406	$	49,254
Held to maturity
Due in 1 year or less	$	483	$	489	$	401	$	405
Due after 1 year through 5 years	2,590		2,693		2,284		2,363
Due after 5 years through 10 years	1,157		1,206		1,686		1,723
Due after 10 years	357		386		386		393
	4,587		4,774		4,757		4,884
Mortgage-backed securities	1,187		1,241		1,341		1,379
	$	5,774	$	6,015	$	6,098	$	6,263

Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. 

b) Equity securities

	June 30			December 31
(in millions of U.S. dollars)	2014			2013
Cost	$	874		$	841
Gross unrealized appreciation	77			63
Gross unrealized depreciation	(44		)	(67		)
Fair value	$	907		$	837

c)Net realized gains (losses)

In accordance with guidance related to the recognition and presentation of OTTI, when an impairment related to a fixed maturity has occurred, OTTI is required to be recorded in Net income if management has the intent to sell the security or it is more likely than not that we will be required to sell the security before the recovery of its amortized cost. Further, in cases where we do not intend to sell the security and it is more likely than not that we will not be required to sell the security, ACE must evaluate the security to determine the portion of the impairment, if any, related to credit losses. If a credit loss is indicated, an OTTI is considered to have occurred and any portion of the OTTI related to credit losses must be reflected in Net income while the portion of OTTI related to all other factors is recognized in OCI. For fixed maturities held to maturity, OTTI recognized in OCI is accreted from AOCI to the amortized cost of the fixed maturity prospectively over the remaining term of the securities.

Each quarter, securities in an unrealized loss position (impaired securities), including fixed maturities, securities lending collateral, equity securities, and other investments, are reviewed to identify impaired securities to be specifically evaluated for a potential OTTI.

For all non-fixed maturities, OTTI is evaluated based on the following:

• the amount of time a security has been in a loss position and the magnitude of the loss position;

• the period in which cost is expected to be recovered, if at all, based on various criteria including economic conditions and other issuer-specific developments; and

• ACE’s ability and intent to hold the security to the expected recovery period.

As a general rule, we also consider that equity securities in an unrealized loss position for twelve consecutive months are other than temporarily impaired. For mutual funds included in equity securities in our consolidated balance sheet, we employ analysis similar to fixed maturities, when applicable.

We review each fixed maturity in an unrealized loss position to assess whether the security is a candidate for credit loss. Specifically, we consider credit rating, market price, and issuer-specific financial information, among other factors, to assess the likelihood of collection of all principal and interest as contractually due. Securities for which we determine that credit loss is likely are subjected to further analysis to estimate the credit loss recognized in Net income, if any. In general, credit loss recognized in Net income equals the difference between the security’s amortized cost and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security. All significant assumptions used in determining credit losses are subject to change as market conditions evolve.

Projected cash flows for corporate securities (principally senior unsecured bonds) are driven primarily by assumptions regarding probability of default and also the timing and amount of recoveries associated with defaults. ACE developed projected cash flows for corporate securities using market observable data, issuer-specific information, and credit ratings. We use historical default data by Moody’s Investors Service (Moody’s) rating category to calculate a 1-in-100 year probability of default, which results in a default assumption in excess of the historical mean default rate. Consistent with management's approach, ACE assumed a 32 percent recovery rate (the par value of a defaulted security that will be recovered) across all rating categories rather than using Moody's historical mean recovery rate of 42 percent. We believe that use of a default assumption in excess of the historical mean is conservative in light of current market conditions.

For the three and six months endedJune 30, 2014, credit losses recognized in Net income for corporate securities were $6 million and $10 million, respectively. For the three and six months endedJune 30, 2013, credit losses recognized in Net income for corporate securities were $6 million and $7 million, respectively.

For mortgage-backed securities, credit impairment is assessed using a cash flow model that estimates the cash flows on the underlying mortgages, using the security-specific collateral and transaction structure. The model estimates cash flows from the underlying mortgage loans and distributes those cash flows to various tranches of securities, considering the transaction structure and any subordination and credit enhancements that exist in that structure. The cash flow model incorporates actual cash flows on the mortgage-backed securities through the current period and then projects the remaining cash flows using a number of assumptions, including default rates, prepayment rates, and loss severity rates (the par value of a defaulted security that will not be recovered) on foreclosed properties.

For the three and six months endedJune 30, 2014 and 2013, there were no credit losses recognized in Net income for mortgage-backed securities.

The following table presents the Net realized gains (losses) and the losses included in Net realized gains (losses) and OCI as a result of conditions which caused us to conclude the decline in fair value of certain investments was “other-than-temporary”: 

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Fixed maturities:
OTTI on fixed maturities, gross	$	(9	)	$	(6	)	$	(15	)	$	(7	)
OTTI on fixed maturities recognized in OCI (pre-tax)	1			—			2			—
OTTI on fixed maturities, net	(8		)	(6		)	(13		)	(7		)
Gross realized gains excluding OTTI	54			64			90			126
Gross realized losses excluding OTTI	(26		)	(27		)	(46		)	(52		)
Total fixed maturities	20			31			31			67
Equity securities:
OTTI on equity securities	(1		)	—			(7		)	(1		)
Gross realized gains excluding OTTI	2			8			4			10
Gross realized losses excluding OTTI	—			(1		)	(1		)	(3		)
Total equity securities	1			7			(4		)	6
OTTI on other investments	(3		)	(1		)	(3		)	(2		)
Foreign exchange gains (losses)	(14		)	(5		)	(23		)	71
Investment and embedded derivative instruments	(15		)	40			(40		)	58
Fair value adjustments on insurance derivative	2			101			(46		)	429
S&P put options and futures	(72		)	(68		)	(91		)	(318		)
Other derivative instruments	9			(1		)	7			(1		)
Other	(1		)	—			(8		)	—
Net realized gains (losses)	$	(73	)	$	104		$	(177	)	$	310

The following table presents a roll-forward of pre-tax credit losses related to fixed maturities for which a portion of OTTI was recognized in OCI:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Balance of credit losses related to securities still held – beginning of period	$	35		$	35		$	37		$	43
Additions where no OTTI was previously recorded	5			4			7			4
Additions where an OTTI was previously recorded	1			2			3			3
Reductions for securities sold during the period	(17		)	(1		)	(23		)	(10		)
Balance of credit losses related to securities still held – end of period	$	24		$	40		$	24		$	40

d) Gross unrealized loss

At June 30, 2014, there were 3,253 fixed maturities out of a total of 25,285 fixed maturities in an unrealized loss position. The largest single unrealized loss in the fixed maturities was $3 million. There were 52 equity securities out of a total of 186 equity securities in an unrealized loss position. The largest single unrealized loss in the equity securities was $42 million. Fixed maturities in an unrealized loss position at June 30, 2014, comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase. As of June 30, 2014, there was one mutual fund, classified as an equity security investment, that was in a continuous unrealized loss position for more than twelve months where an other-than-temporary loss was not recorded. The unrealized loss of $42 million was approximately 8 percent of the original cost of the related equity security. We believe the impairment was temporary based on the relative price decline of the security and our intent and ability to hold the investment to its anticipated recovery.

The following tables present, for all securities in an unrealized loss position (including securities on loan), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

	0 – 12 Months					Over 12 Months					Total
June 30, 2014	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	—	$	—		$	1,069	$	(19	)	$	1,069	$	(19	)
Foreign	1,274		(11		)	1,303		(27		)	2,577		(38		)
Corporate securities	1,118		(12		)	1,050		(24		)	2,168		(36		)
Mortgage-backed securities	486		(4		)	2,540		(71		)	3,026		(75		)
States, municipalities, and political subdivisions	366		(4		)	1,041		(16		)	1,407		(20		)
Total fixed maturities	3,244		(31		)	7,003		(157		)	10,247		(188		)
Equity securities	45		(2		)	462		(42		)	507		(44		)
Other investments	39		(1		)	—		—			39		(1		)
Total	$	3,328	$	(34	)	$	7,465	$	(199	)	$	10,793	$	(233	)

	0 – 12 Months					Over 12 Months					Total
December 31, 2013	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	1,794	$	(57	)	$	31	$	(6	)	$	1,825	$	(63	)
Foreign	4,621		(114		)	201		(8		)	4,822		(122		)
Corporate securities	3,836		(118		)	194		(14		)	4,030		(132		)
Mortgage-backed securities	5,248		(197		)	384		(31		)	5,632		(228		)
States, municipalities, and political subdivisions	2,164		(90		)	84		(4		)	2,248		(94		)
Total fixed maturities	17,663		(576		)	894		(63		)	18,557		(639		)
Equity securities	498		(67		)	—		—			498		(67		)
Other investments	67		(9		)	—		—			67		(9		)
Total	$	18,228	$	(652	)	$	894	$	(63	)	$	19,122	$	(715	)

e) Restricted assets

ACE is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance operations. These requirements are generally promulgated in the statutory regulations of the individual jurisdictions. The assets on deposit are available to settle insurance and reinsurance liabilities. ACE is also required to restrict assets pledged under repurchase agreements. We also use trust funds in certain large reinsurance transactions where the trust funds are set up for the benefit of the ceding companies and generally take the place of letter of credit (LOC) requirements. We also have investments in segregated portfolios primarily to provide collateral or guarantees for LOC and derivative transactions. Included in restricted assets at June 30, 2014 and December 31, 2013, are investments, primarily fixed maturities, totaling $15.7 billion and $16.3 billion, respectively, and cash of $84 million and $162 million, respectively.

The following table presents the components of restricted assets:

	June 30		December 31
(in millions of U.S. dollars)	2014		2013
Trust funds	$	10,554	$	11,315
Deposits with non-U.S. regulatory authorities	1,969		1,970
Assets pledged under repurchase agreements	1,451		1,435
Deposits with U.S. regulatory authorities	1,336		1,334
Other pledged assets	459		391
	$	15,769	$	16,445

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Acquisitions

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

Large Corporate P&C Insurance Business of Itaú Seguros, S.A. (Itaú Seguros)

On July 4, 2014, we announced that we reached a definitive agreement to acquire the large corporate property and casualty (P&C) insurance business of Itaú Seguros, Brazil's leading carrier for that business, for approximately $685 million, at current exchange rates. This transaction, which is subject to regulatory approval and other customary closing conditions, is expected to be completed in the first quarter of 2015.

The Siam Commercial Samaggi Insurance PCL (Samaggi)

We and our local partner acquired 60.86 percent of Samaggi, a general insurance company in Thailand, from Siam Commercial Bank on April 28, 2014, and subsequently acquired an additional 32.17 percent ownership, through a mandatory tender offer, which expired on June 17, 2014. The purchase price for 93.03 percent of the company was $176 million in cash. This acquisition expands our presence in Thailand and Southeast Asia.

The acquisition generated $46 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $80 million based on ACE’s preliminary purchase price allocation.  The other intangible assets primarily relate to a bancassurance agreement. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

ABA Seguros

On May 2, 2013, we acquired ABA Seguros, a property and casualty insurer in Mexico that provides automobile, homeowners, and small business coverages for approximately $690 million in cash.

The acquisition generated $285 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $140 million based on ACE’s purchase price allocation. The other intangible assets primarily relate to distribution channels. Amortization of other intangible assets is included in Other (income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

Fianzas Monterrey

On April 1, 2013, we acquired Fianzas Monterrey, a leading surety lines company in Mexico offering administrative performance bonds primarily to clients in the construction and industrial sectors, for approximately $293 million in cash. This acquisition greatly expanded our global franchise in the surety business and enhanced our existing commercial lines and personal accident insurance business in Mexico.

The acquisition generated $137 million of goodwill, attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes, and other intangible assets of $73 million, based on ACE's purchase price allocation. The other intangible assets primarily relate to customer lists. Amortization of other intangible assets is included in Other (income) expense in the consolidated statements of operations. Goodwill and other intangible assets arising from this acquisition are included in the Insurance – Overseas General segment.

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Investments (Tables)

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule Of Amortized Cost And Fair Value Of Fixed Maturities And Related OTTI Recognized In AOCI

June 30, 2014	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,806	$	80	$	(17	)	$	2,869	$	—
Foreign	15,084		563		(38		)	15,609		(1		)
Corporate securities	17,085		981		(36		)	18,030		(3		)
Mortgage-backed securities	11,185		308		(75		)	11,418		(10		)
States, municipalities, and political subdivisions	3,559		131		(15		)	3,675		—
	$	49,719	$	2,063	$	(181	)	$	51,601	$	(14	)
Held to maturity
U.S. Treasury and agency	$	779	$	18	$	(2	)	$	795	$	—
Foreign	809		44		—			853		—
Corporate securities	1,828		101		—			1,929		—
Mortgage-backed securities	1,187		54		—			1,241		—
States, municipalities, and political subdivisions	1,171		31		(5		)	1,197		—
	$	5,774	$	248	$	(7	)	$	6,015	$	—

December 31, 2013	Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Fair Value		OTTI Recognized in AOCI
(in millions of U.S. dollars)
Available for sale
U.S. Treasury and agency	$	2,946	$	62	$	(59	)	$	2,949	$	—
Foreign	14,336		377		(122		)	14,591		—
Corporate securities	16,825		777		(132		)	17,470		(6		)
Mortgage-backed securities	10,937		184		(227		)	10,894		(34		)
States, municipalities, and political subdivisions	3,362		65		(77		)	3,350		—
	$	48,406	$	1,465	$	(617	)	$	49,254	$	(40	)
Held to maturity
U.S. Treasury and agency	$	820	$	16	$	(4	)	$	832	$	—
Foreign	864		33		—			897		—
Corporate securities	1,922		83		—			2,005		—
Mortgage-backed securities	1,341		39		(1		)	1,379		—
States, municipalities, and political subdivisions	1,151		16		(17		)	1,150		—
	$	6,098	$	187	$	(22	)	$	6,263	$	—

Schedule Of Fixed Maturities By Contractual Maturity

			June 30				December 31
			2014				2013
(in millions of U.S. dollars)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale
Due in 1 year or less	$	2,513	$	2,537	$	2,387	$	2,411
Due after 1 year through 5 years	15,095		15,692		14,139		14,602
Due after 5 years through 10 years	15,917		16,575		16,200		16,535
Due after 10 years	5,009		5,379		4,743		4,812
	38,534		40,183		37,469		38,360
Mortgage-backed securities	11,185		11,418		10,937		10,894
	$	49,719	$	51,601	$	48,406	$	49,254
Held to maturity
Due in 1 year or less	$	483	$	489	$	401	$	405
Due after 1 year through 5 years	2,590		2,693		2,284		2,363
Due after 5 years through 10 years	1,157		1,206		1,686		1,723
Due after 10 years	357		386		386		393
	4,587		4,774		4,757		4,884
Mortgage-backed securities	1,187		1,241		1,341		1,379
	$	5,774	$	6,015	$	6,098	$	6,263

Schedule Of Cost And Fair Value Of Equity Securities

	June 30			December 31
(in millions of U.S. dollars)	2014			2013
Cost	$	874		$	841
Gross unrealized appreciation	77			63
Gross unrealized depreciation	(44		)	(67		)
Fair value	$	907		$	837

Schedule Of Net Realized Gains (Losses) And The Losses Included In Net Realized Gains (Losses) And OCI

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Fixed maturities:
OTTI on fixed maturities, gross	$	(9	)	$	(6	)	$	(15	)	$	(7	)
OTTI on fixed maturities recognized in OCI (pre-tax)	1			—			2			—
OTTI on fixed maturities, net	(8		)	(6		)	(13		)	(7		)
Gross realized gains excluding OTTI	54			64			90			126
Gross realized losses excluding OTTI	(26		)	(27		)	(46		)	(52		)
Total fixed maturities	20			31			31			67
Equity securities:
OTTI on equity securities	(1		)	—			(7		)	(1		)
Gross realized gains excluding OTTI	2			8			4			10
Gross realized losses excluding OTTI	—			(1		)	(1		)	(3		)
Total equity securities	1			7			(4		)	6
OTTI on other investments	(3		)	(1		)	(3		)	(2		)
Foreign exchange gains (losses)	(14		)	(5		)	(23		)	71
Investment and embedded derivative instruments	(15		)	40			(40		)	58
Fair value adjustments on insurance derivative	2			101			(46		)	429
S&P put options and futures	(72		)	(68		)	(91		)	(318		)
Other derivative instruments	9			(1		)	7			(1		)
Other	(1		)	—			(8		)	—
Net realized gains (losses)	$	(73	)	$	104		$	(177	)	$	310

Schedule Of Roll-Forward Of Pre-Tax Credit Losses Related To Fixed Maturities For Which A Portion Of OTTI Was Recognized In OCI

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Balance of credit losses related to securities still held – beginning of period	$	35		$	35		$	37		$	43
Additions where no OTTI was previously recorded	5			4			7			4
Additions where an OTTI was previously recorded	1			2			3			3
Reductions for securities sold during the period	(17		)	(1		)	(23		)	(10		)
Balance of credit losses related to securities still held – end of period	$	24		$	40		$	24		$	40

Schedule Of Aggregate Fair Value And Gross Unrealized Loss By Length Of Time The Security Has Continuously Been In An Unrealized Loss Position

	0 – 12 Months					Over 12 Months					Total
June 30, 2014	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	—	$	—		$	1,069	$	(19	)	$	1,069	$	(19	)
Foreign	1,274		(11		)	1,303		(27		)	2,577		(38		)
Corporate securities	1,118		(12		)	1,050		(24		)	2,168		(36		)
Mortgage-backed securities	486		(4		)	2,540		(71		)	3,026		(75		)
States, municipalities, and political subdivisions	366		(4		)	1,041		(16		)	1,407		(20		)
Total fixed maturities	3,244		(31		)	7,003		(157		)	10,247		(188		)
Equity securities	45		(2		)	462		(42		)	507		(44		)
Other investments	39		(1		)	—		—			39		(1		)
Total	$	3,328	$	(34	)	$	7,465	$	(199	)	$	10,793	$	(233	)

	0 – 12 Months					Over 12 Months					Total
December 31, 2013	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
(in millions of U.S. dollars)
U.S. Treasury and agency	$	1,794	$	(57	)	$	31	$	(6	)	$	1,825	$	(63	)
Foreign	4,621		(114		)	201		(8		)	4,822		(122		)
Corporate securities	3,836		(118		)	194		(14		)	4,030		(132		)
Mortgage-backed securities	5,248		(197		)	384		(31		)	5,632		(228		)
States, municipalities, and political subdivisions	2,164		(90		)	84		(4		)	2,248		(94		)
Total fixed maturities	17,663		(576		)	894		(63		)	18,557		(639		)
Equity securities	498		(67		)	—		—			498		(67		)
Other investments	67		(9		)	—		—			67		(9		)
Total	$	18,228	$	(652	)	$	894	$	(63	)	$	19,122	$	(715	)

Schedule Of Components Of Restricted Assets

	June 30		December 31
(in millions of U.S. dollars)	2014		2013
Trust funds	$	10,554	$	11,315
Deposits with non-U.S. regulatory authorities	1,969		1,970
Assets pledged under repurchase agreements	1,451		1,435
Deposits with U.S. regulatory authorities	1,336		1,334
Other pledged assets	459		391
	$	15,769	$	16,445

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Segment information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment information

Segment information

ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business segments have established relationships with reinsurance intermediaries.

For segment reporting purposes, certain items have been presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. ACE calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. For the Insurance – North American Agriculture segment, management includes gains and losses from fair value changes on crop derivatives as a component of underwriting income. For example, for the three months ended June 30, 2014, underwriting income in our Insurance – North American Agriculture segment was $27 million. This amount includes $8 million of realized gains related to crop derivatives which are included in Net realized gains (losses) below. For the Life segment, management 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 as components of Life underwriting income. For example, for the three months ended June 30, 2014, Life underwriting income of $89 million includes Net investment income of $66 million and gains from fair value changes in separate account assets of $17 million.

The following tables present the Statement of Operations by segment:

For the Three Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,635		$	388	$	1,760	$	278		$	498		$	—		$	4,559
Net premiums earned	1,542			330		1,709		261			490			—			4,332
Losses and loss expenses	1,016			287		830		109			146			—			2,388
Policy benefits	—			—		—		—			144			—			144
Policy acquisition costs	152			23		402		60			121			—			758
Administrative expenses	175			1		256		14			73			47			566
Underwriting income (loss)	199			19		221		78			6			(47		)	476
Net investment income	265			6		136		80			66			3			556
Net realized gains (losses) including OTTI	(11		)	8		14		(15		)	(72		)	3			(73		)
Interest expense	2			—		1		2			3			64			72
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			(17		)	—			(17		)
Other	(24		)	9		8		(10		)	4			5			(8		)
Income tax expense (benefit)	91			5		55		10			12			(40		)	133
Net income (loss)	$	384		$	19	$	307	$	141		$	(2	)	$	(70	)	$	779

For the Three Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance		Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,529		$	453	$	1,630	$	292	$	487	$	—		$	4,391
Net premiums earned	1,428			351		1,563		245		480		—			4,067
Losses and loss expenses	950			293		768		93		145		1			2,250
Policy benefits	—			—		—		—		110		—			110
Policy acquisition costs	142			20		360		48		95		—			665
Administrative expenses	159			3		251		12		86		53			564
Underwriting income (loss)	177			35		184		92		44		(54		)	478
Net investment income	250			7		136		71		63		7			534
Net realized gains (losses) including OTTI	28			1		8		31		36		—			104
Interest expense	3			—		2		1		4		63			73
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—		11		—			11
Other	(10		)	8		17		2		3		6			26
Income tax expense (benefit)	91			8		50		7		10		(51		)	115
Net income (loss)	$	371		$	27	$	259	$	184	$	115	$	(65	)	$	891

For the Six Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture			Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	3,053		$	582		$	3,531	$	586		$	992		$	—		$	8,744
Net premiums earned	3,029			433			3,321		545			974			—			8,302
Losses and loss expenses	1,956			413			1,647		235			297			1			4,549
Policy benefits	—			—			—		—			258			—			258
Policy acquisition costs	311			28			788		127			232			—			1,486
Administrative expenses	336			2			506		28			141			88			1,101
Underwriting income (loss)	426			(10		)	380		155			46			(89		)	908
Net investment income	535			13			268		157			130			6			1,109
Net realized gains (losses) including OTTI	(20		)	6			4		(23		)	(148		)	4			(177		)
Interest expense	5			—			2		3			6			127			143
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—		—			(11		)	—			(11		)
Other	(44		)	17			2		(29		)	11			12			(31		)
Income tax expense (benefit)	174			(2		)	92		20			22			(80		)	226
Net income (loss)	$	806		$	(6	)	$	556	$	295		$	—		$	(138	)	$	1,513

For the Six Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	2,813		$	566	$	3,250	$	571		$	989	$	—		$	8,189
Net premiums earned	2,766			403		3,022		492			957		—			7,640
Losses and loss expenses	1,828			325		1,515		199			302		7			4,176
Policy benefits	—			—		—		—			241		—			241
Policy acquisition costs	285			24		699		96			175		—			1,279
Administrative expenses	284			8		487		24			171		104			1,078
Underwriting income (loss)	369			46		321		173			68		(111		)	866
Net investment income	501			13		268		143			126		14			1,065
Net realized gains (losses) including OTTI	54			1		42		51			163		(1		)	310
Interest expense	1			—		3		2			8		119			133
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			7		—			7
Other	(25		)	16		16		(6		)	3		16			20
Income tax expense (benefit)	185			10		96		15			23		(92		)	237
Net income (loss)	$	763		$	34	$	516	$	356		$	316	$	(141	)	$	1,844

Underwriting assets are reviewed in total by management for purposes of decision-making. Other than goodwill and other intangible assets, ACE does not allocate assets to its segments.

The following table presents net premiums earned for each segment by product:

(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Three Months Ended June 30, 2014
Insurance – North American P&C	$	423	$	1,018	$	101	$	1,542
Insurance – North American Agriculture	330		—		—		330
Insurance – Overseas General	727		395		587		1,709
Global Reinsurance	132		129		—		261
Life	—		—		490		490
	$	1,612	$	1,542	$	1,178	$	4,332
For the Three Months Ended June 30, 2013
Insurance – North American P&C	$	368	$	967	$	93	$	1,428
Insurance – North American Agriculture	351		—		—		351
Insurance – Overseas General	658		374		531		1,563
Global Reinsurance	132		113		—		245
Life	—		—		480		480
	$	1,509	$	1,454	$	1,104	$	4,067
(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Six Months Ended June 30, 2014
Insurance – North American P&C	$	828	$	1,999	$	202	$	3,029
Insurance – North American Agriculture	433		—		—		433
Insurance – Overseas General	1,420		764		1,137		3,321
Global Reinsurance	286		259		—		545
Life	—		—		974		974
	$	2,967	$	3,022	$	2,313	$	8,302
For the Six Months Ended June 30, 2013
Insurance – North American P&C	$	715	$	1,869	$	182	$	2,766
Insurance – North American Agriculture	403		—		—		403
Insurance – Overseas General	1,243		713		1,066		3,022
Global Reinsurance	267		225		—		492
Life	—		—		957		957
	$	2,628	$	2,807	$	2,205	$	7,640

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Debt

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

6. Debt

In May 2014, ACE INA Holdings Inc. issued $700 million of 3.35 percent senior notes due May 2024.  These senior notes are redeemable at any time at ACE INA Holdings Inc.'s option subject to a “make-whole” premium (the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate plus 0.15 percent). The notes are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law. These notes do not have the benefit of any sinking fund.  These senior unsecured notes are guaranteed on a senior basis by ACE Limited and they rank equally with all of ACE's other senior obligations.  They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

In May 2014, we reclassified ACE INA Holdings Inc.'s $450 million of 5.6 percent senior notes, due to mature on May 15, 2015, from Long-term debt to Short-term debt in the consolidated balance sheet.

In June 2014, ACE INA Holdings Inc.'s $500 million of 5.875 percent senior notes matured and were fully paid.

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Fair value measurements

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair value measurements

Fair value measurements

a) Fair value hierarchy

Fair value of financial assets and financial liabilities is estimated based on the framework established in the fair value accounting guidance. The guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data.

The three levels of the hierarchy are as follows:

• Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as

interest rates and yield curves, quoted prices for similar assets and liabilities in active markets, and quoted prices for identical or similar assets and liabilities in markets that are not active; and

• Level 3 – Inputs that are unobservable and reflect management’s judgments about assumptions that market participants

would use in pricing an asset or liability.

We categorize financial instruments within the valuation hierarchy at the balance sheet date based upon the lowest level of inputs that are significant to the fair value measurement. Accordingly, transfers between levels within the valuation hierarchy occur when there are significant changes to the inputs, such as increases or decreases in market activity, changes to the availability of current prices, changes to the transparency to underlying inputs, and whether there are significant variances in quoted prices. Transfers in and/or out of any level are assumed to occur at the end of the period.

We use pricing services to obtain fair value measurements for the majority of our investment securities. Based on management’s understanding of the methodologies used, these pricing services only produce an estimate of fair value if there is observable market information that would allow them to make a fair value estimate. Based on our understanding of the market inputs used by the pricing services, all applicable investments have been valued in accordance with GAAP. We do not adjust prices obtained from pricing services. The following is a description of the valuation techniques and inputs used to determine fair values for financial instruments carried at fair value, as well as the general classification of such financial instruments pursuant to the valuation hierarchy.

Fixed maturities

We use pricing services to estimate fair value measurements for the majority of our fixed maturities. The pricing services use market quotations for fixed maturities that have quoted prices in active markets; such securities are classified within Level 1. For fixed maturities other than U.S. Treasury securities that generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Additional valuation factors that can be taken into account are nominal spreads, dollar basis, and liquidity adjustments. The pricing services evaluate each asset class based on relevant market and credit information, perceived market movements, and sector news. The market inputs used in the pricing evaluation, listed in the approximate order of priority include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. The extent of the use of each input is dependent on the asset class and the market conditions. Given the asset class, the priority of the use of inputs may change, or some market inputs may not be relevant. Additionally, fixed maturities valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing), which may increase the potential that an investment's estimated fair value is not reflective of the price at which an actual transaction would occur. The overwhelming majority of fixed maturities are classified within Level 2 because the most significant inputs used in the pricing techniques are observable. For a small number of fixed maturities, we obtain a quote from a broker (typically a market maker). Due to the disclaimers on the quotes that indicate that the price is indicative only, we include these fair value estimates in Level 3. 

Equity securities

Equity securities with active markets are classified within Level 1 as fair values are based on quoted market prices. For equity securities in markets which are less active, fair values are based on market valuations and are classified within Level 2. Equity securities for which pricing is unobservable are classified within Level 3.

Short-term investments

Short-term investments, which comprise securities due to mature within one year of the date of purchase that are traded in active markets, are classified within Level 1 as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their cost approximates fair value. Short-term investments for which pricing is unobservable are classified within Level 3.

Other investments

Fair values for the majority of Other investments including investments in partially-owned investment companies, investment funds, and limited partnerships are based on their respective net asset values or equivalent (NAV). The majority of these investments, for which NAV was used as a practical expedient to measure fair value, are classified within Level 3 because either ACE will never have the contractual option to redeem the investments or will not have the contractual option to redeem the investments in the near term. The remainder of such investments is classified within Level 2. Certain of our long-duration contracts are supported by assets that do not qualify for separate account reporting under GAAP. These assets comprise mutual funds classified within Level 1 in the valuation hierarchy on the same basis as other equity securities traded in active markets. Other investments also includes equity securities and fixed maturities held in rabbi trusts maintained by ACE for deferred compensation plans, which are classified within the valuation hierarchy on the same basis as other equity securities and fixed maturities.

Securities lending collateral

The underlying assets included in Securities lending collateral in the consolidated balance sheets are fixed maturities which are classified in the valuation hierarchy on the same basis as other fixed maturities. Excluded from the valuation hierarchy is the corresponding liability related to ACE’s obligation to return the collateral plus interest as it is reported at contract value and not fair value in the consolidated balance sheets.

Investment derivative instruments

Actively traded investment derivative instruments, including futures, options, and forward contracts are classified within Level 1 as fair values are based on quoted market prices. The fair value of cross-currency swaps are based on market valuations and are classified within Level 2. Investment derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Other derivative instruments

We maintain positions in other derivative instruments including exchange-traded equity futures contracts and option contracts designed to limit exposure to a severe equity market decline, which would cause an increase in expected claims and, therefore, reserves for our guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) reinsurance business. Our position in exchange-traded equity futures contracts is classified within Level 1. The fair value of the majority of the remaining positions in other derivative instruments is based on significant observable inputs including equity security and interest rate indices. Accordingly, these are classified within Level 2. Other derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

Separate account assets

Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of certain guarantees made by ACE. Separate account assets comprise mutual funds classified in the valuation hierarchy on the same basis as other equity securities traded in active markets and are classified within Level 1. Separate account assets also include fixed maturities classified within Level 2 because the most significant inputs used in the pricing techniques are observable. Excluded from the valuation hierarchy are the corresponding liabilities as they are reported at contract value and not fair value in the consolidated balance sheets. Separate account assets are recorded in Other assets in the consolidated balance sheets.

Guaranteed living benefits

The GLB arises from life reinsurance programs covering living benefit guarantees whereby we assume the risk of guaranteed minimum income benefits (GMIB) and guaranteed minimum accumulation benefits (GMAB) associated with variable annuity contracts. GLB’s are recorded in Accounts payable, accrued expenses, and other liabilities and Future policy benefits in the consolidated balance sheets. For GLB reinsurance, ACE estimates fair value using an internal valuation model which includes current market information and estimates of policyholder behavior. All of the treaties contain claim limits, which are factored into the valuation model. The fair value depends on a number of inputs, including changes in interest rates, changes in equity markets, credit risk, current account value, changes in market volatility, expected annuitization rates, changes in policyholder behavior, and changes in policyholder mortality.

The most significant policyholder behavior assumptions include lapse rates and the GMIB annuitization rates. Assumptions regarding lapse rates and GMIB annuitization rates differ by treaty, but the underlying methodologies to determine rates applied to each treaty are comparable. The assumptions regarding lapse and GMIB annuitization rates determined for each treaty are based on a dynamic calculation that uses several underlying factors.

A lapse rate is the percentage of in-force policies surrendered in a given calendar year. All else equal, as lapse rates increase, ultimate claim payments will decrease.

GMIB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed benefit provided under the GMIB. All else equal, as GMIB annuitization rates increase, ultimate claim payments will increase, subject to treaty claim limits.

The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data available from cedants. For treaties with limited experience, rates are established in line with data received from other ceding companies adjusted, as appropriate, with industry estimates. The model and related assumptions are continuously re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of more information, such as market conditions, market participant assumptions, and demographics of in-force annuities. During the three and six months endedJune 30, 2014, no material changes were made to actuarial or behavioral assumptions. We made minor technical refinements to the model with a favorable (unfavorable) net income impact of approximately $1 million and $(2) million for the three and six months endedJune 30, 2014, respectively. For detailed information on our lapse and annuitization rate assumptions, refer to Note 4 to the Consolidated Financial Statements of our 2013 Form 10-K.

We view the variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of a cumulative long-term economic net loss relatively small at the time of pricing. However, adverse changes in market factors and policyholder behavior will have an adverse impact on net income, which may be material. Because of the significant use of unobservable inputs including policyholder behavior, GLB reinsurance is classified within Level 3.

The following tables present, by valuation hierarchy, the financial instruments measured at fair value on a recurring basis:

June 30, 2014	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,677	$	1,192	$	—	$	2,869
Foreign	216		15,381		12		15,609
Corporate securities	—		17,826		204		18,030
Mortgage-backed securities	—		11,411		7		11,418
States, municipalities, and political subdivisions	—		3,675		—		3,675
	1,893		49,485		223		51,601
Equity securities	414		491		2		907
Short-term investments	1,069		1,039		—		2,108
Other investments	336		254		2,640		3,230
Securities lending collateral	—		1,440		—		1,440
Investment derivative instruments	9		—		—		9
Other derivative instruments	16		2		—		18
Separate account assets	1,349		88		—		1,437
Total assets measured at fair value	$	5,086	$	52,799	$	2,865	$	60,750
Liabilities:
Investment derivative instruments	$	10	$	—	$	—	$	10
Other derivative instruments	15		2		—		17
GLB(1)	—		—		241		241
Total liabilities measured at fair value	$	25	$	2	$	241	$	268

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

December 31, 2013	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,626	$	1,323	$	—	$	2,949
Foreign	223		14,324		44		14,591
Corporate securities	—		17,304		166		17,470
Mortgage-backed securities	—		10,886		8		10,894
States, municipalities, and political subdivisions	—		3,350		—		3,350
	1,849		47,187		218		49,254
Equity securities	373		460		4		837
Short-term investments	953		803		7		1,763
Other investments	305		231		2,440		2,976
Securities lending collateral	—		1,632		—		1,632
Investment derivative instruments	19		—		—		19
Other derivative instruments	—		6		—		6
Separate account assets	1,145		81		—		1,226
Total assets measured at fair value	$	4,644	$	50,400	$	2,669	$	57,713
Liabilities:
Investment derivative instruments	$	6	$	—	$	—	$	6
Other derivative instruments	60		2		—		62
GLB(1)	—		—		193		193
Total liabilities measured at fair value	$	66	$	2	$	193	$	261

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

The following table presents transfers of financial instruments between Level 1 and Level 2:

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars)	2014		2013		2014		2013
Transfers from Level 1 to Level 2	$	—	$	6	$	—	$	19
Transfers from Level 2 to Level 1	—		—		—		—

Fair value of alternative investments

Included in Other investments in the fair value hierarchy at June 30, 2014 and December 31, 2013 are investment funds, limited partnerships, and partially-owned investment companies measured at fair value using NAV as a practical expedient. At June 30, 2014 and December 31, 2013, there were no probable or pending sales related to any of the investments measured at fair value using NAV. 

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments:

				June 30				December 31
	Expected Liquidation Period of Underlying Assets			2014				2013
(in millions of U.S. dollars)		Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
Financial	5 to 9 Years	$	274	$	119	$	256	$	129
Real estate	3 to 9 Years	322		63		322		92
Distressed	6 to 9 Years	265		145		180		230
Mezzanine	6 to 9 Years	303		222		276		252
Traditional	3 to 8 Years	923		448		813		456
Vintage	1 to 3 Years	11		—		13		—
Investment funds	Not Applicable	385		—		428		—
		$	2,483	$	997	$	2,288	$	1,159

Included in all categories in the above table except for Investment funds are investments for which ACE will never have the contractual option to redeem but receives distributions based on the liquidation of the underlying assets. Further, for all categories except for Investment funds, ACE does not have the ability to sell or transfer the investments without the consent from the general partner of individual funds.

Investment Category	Consists of investments in private equity funds:
Financial	targeting financial services companies such as financial institutions and insurance services worldwide
Real estate	targeting global distress opportunities, value added U.S. properties, and global mezzanine debt securities in the commercial real estate market
Distressed	targeting distressed debt/credit and equity opportunities in the U.S
Mezzanine	targeting private mezzanine debt of large-cap and mid-cap companies in the U.S. and worldwide
Traditional	employing traditional private equity investment strategies such as buyout and venture with different geographical focuses including Brazil, Asia, Europe, and the U.S.
Vintage	made before 2002 and where the funds’ commitment periods had already expired

Investment funds

ACE’s investment funds employ various investment strategies such as long/short equity and arbitrage/distressed. Included in this category are investments for which ACE has the option to redeem at agreed upon value as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investment fund investments may be redeemed monthly, quarterly, semi-annually, or annually. If ACE wishes to redeem an investment fund investment, it must first determine if the investment fund is still in a lock-up period (a time when ACE cannot redeem its investment so that the investment fund manager has time to build the portfolio). If the investment fund is no longer in its lock-up period, ACE must then notify the investment fund manager of its intention to redeem by the notification date prescribed by the subscription agreement. Subsequent to notification, the investment fund can redeem ACE’s investment within several months of the notification. Notice periods for redemption of the investment funds range between 5 and 120 days. ACE can redeem its investment funds without consent from the investment fund managers.

Level 3 financial instruments

The fair values of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) consist of various inputs and assumptions that management makes when determining fair value. Management analyzes changes in fair value measurements classified within Level 3 by comparing pricing and returns of our investments to benchmarks, including month-over-month movements, investment credit spreads, interest rate movements, and credit quality of securities.

The following table presents the significant unobservable inputs used in the Level 3 liability valuations. Excluded from the table below are inputs used to determine the fair value of Level 3 assets which are based on single broker quotes or net asset value and contain no quantitative unobservable inputs developed by management. 

(in millions of U.S. dollars, except for percentages)	Fair Value				Valuation Technique	Significant Unobservable Inputs	Ranges
	June 30, 2014		December 31, 2013
GLB(1)	$	241	$	193	Actuarial model	Lapse rate	1% – 30%
						Annuitization rate	0% – 55%

⁽¹⁾  Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

The following tables present a reconciliation of the beginning and ending balances of financial instruments measured at fair value using significant unobservable inputs (Level 3): 

	Assets														Liabilities
Three Months Ended	Available-for-Sale Debt Securities									Equity securities		Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	26		$	151		$	8		$	2	$	2,611		$	243
Transfers into Level 3	2			26			—			—		—			—
Transfers out of Level 3	(16		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	—			2			—			—		7			—
Net Realized Gains/Losses	1			—			—			—		(3		)	(2		)
Purchases	—			30			—			—		152			—
Sales	(1		)	(2		)	—			—		(2		)	—
Settlements	—			(3		)	(1		)	—		(125		)	—
Balance–End of Period	$	12		$	204		$	7		$	2	$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—	$	(3	)	$	(2	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Three Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	35		$	118		$	13		$	2		$	—	$	2,328		$	753
Transfers into Level 3	29			5			—			7			7		—			—
Transfers out of Level 3	(14		)	(27		)	—			—			—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	(1		)	—			(5		)	—		13			—
Net Realized Gains/Losses	—			(1		)	—			4			—		(1		)	(101		)
Purchases	3			23			—			1			2		113			—
Sales	(1		)	—			(3		)	(5		)	—		—			—
Settlements	—			(3		)	(1		)	—			—		(104		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(1	)	$	(101	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.0 billion at March 31, 2013, which includes a fair value derivative adjustment of $652 million and $753 million, respectively.

	Assets																		Liabilities
Six Months Ended	Available-for-Sale Debt Securities									Equity securities			Short-term investments			Other investments			GLB(1)
June 30, 2014	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance–Beginning of Period	$	44		$	166		$	8		$	4		$	7		$	2,440		$	193
Transfers into Level 3	2			30			—			—			—			—			—
Transfers out of Level 3	(34		)	(22		)	—			(2		)	(7		)	—			—
Change in Net Unrealized Gains (Losses) included in OCI	(1		)	2			—			1			—			48			—
Net Realized Gains/Losses	1			—			—			—			—			(3		)	48
Purchases	2			45			—			1			—			352			—
Sales	(2		)	(8		)	—			(2		)	—			(3		)	—
Settlements	—			(9		)	(1		)	—			—			(194		)	—
Balance–End of Period	$	12		$	204		$	7		$	2		$	—		$	2,640		$	241
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	(3	)	$	48

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5 for additional information.

	Assets																	Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments		Other investments			GLB(1)
Six Months Ended	Foreign			Corporate securities			MBS
June 30, 2013
(in millions of U.S. dollars)
Balance–Beginning of Period	$	60		$	102		$	13		$	3		$	—	$	2,252		$	1,119
Transfers into Level 3	32			17			—			7			7		—			—
Transfers out of Level 3	(41		)	(29		)	—			(1		)	—		—			—
Change in Net Unrealized Gains (Losses) included in OCI	(4		)	—			—			(5		)	—		35			—
Net Realized Gains/Losses	1			(1		)	—			4			—		(2		)	(467		)
Purchases	3			33			—			1			2		249			—
Sales	(2		)	—			(3		)	(5		)	—		(9		)	—
Settlements	(1		)	(8		)	(1		)	—			—		(176		)	—
Balance–End of Period	$	48		$	114		$	9		$	4		$	9	$	2,349		$	652
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—	$	(2	)	$	(467	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $880 million at June 30, 2013, and $1.4 billion at December 31, 2012, which includes a fair value derivative adjustment of $652 million and $1.1 billion, respectively.

b) Financial instruments disclosed, but not measured, at fair value

ACE uses various financial instruments in the normal course of its business. Our insurance contracts are excluded from fair value of financial instruments accounting guidance, and therefore, are not included in the amounts discussed below.

The carrying values of cash, other assets, other liabilities, and other financial instruments not included below approximated their fair values.

Investments in partially-owned insurance companies

Fair values for investments in partially-owned insurance companies are based on ACE’s share of the net assets based on the financial statements provided by those companies.

Short- and long-term debt and trust preferred securities

Where practical, fair values for short-term debt, long-term debt, and trust preferred securities are estimated using discounted cash flow calculations based principally on observable inputs including incremental borrowing rates, which reflect ACE’s credit rating, for similar types of borrowings with maturities consistent with those remaining for the debt being valued.

The following tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at fair value:

June 30, 2014	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	601	$	194	$	—	$	795	$	779
Foreign	—		853		—		853		809
Corporate securities	—		1,914		15		1,929		1,828
Mortgage-backed securities	—		1,241		—		1,241		1,187
States, municipalities, and political subdivisions	—		1,197		—		1,197		1,171
	601		5,399		15		6,015		5,774
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	601	$	5,399	$	485	$	6,485	$	6,244
Liabilities:
Short-term debt	$	—	$	1,870	$	—	$	1,870	$	1,851
Long-term debt	—		4,392		—		4,392		4,057
Trust preferred securities	—		456		—		456		309
Total liabilities	$	—	$	6,718	$	—	$	6,718	$	6,217

December 31, 2013	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	596	$	236	$	—	$	832	$	820
Foreign	—		897		—		897		864
Corporate securities	—		1,990		15		2,005		1,922
Mortgage-backed securities	—		1,379		—		1,379		1,341
States, municipalities, and political subdivisions	—		1,150		—		1,150		1,151
	596		5,652		15		6,263		6,098
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	596	$	5,652	$	485	$	6,733	$	6,568
Liabilities:
Short-term debt	$	—	$	1,913	$	—	$	1,913	$	1,901
Long-term debt	—		4,088		—		4,088		3,807
Trust preferred securities	—		438		—		438		309
Total liabilities	$	—	$	6,439	$	—	$	6,439	$	6,017

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Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts

6 Months Ended

Jun. 30, 2014

Reinsurance Disclosures [Abstract]

Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts

Assumed life reinsurance programs involving minimum benefit guarantees under annuity contracts

The following table presents income and expenses relating to GMDB and GLB reinsurance. GLBs include GMIBs as well as some GMABs originating in Japan.

	Three Months Ended					Six Months Ended
	June 30					June 30
(in millions of U.S. dollars)	2014			2013		2014			2013
GMDB
Net premiums earned	$	18		$	20	$	37		$	40
Policy benefits and other reserve adjustments	$	13		$	25	$	28		$	44
GLB
Net premiums earned	$	34		$	37	$	70		$	76
Policy benefits and other reserve adjustments	10			2		19			11
Net realized gains (losses)	2			101		(48		)	470
Gain recognized in income	$	26		$	136	$	3		$	535
Net cash received	$	29		$	31	$	62		$	63
Net (increase) decrease in liability	$	(3	)	$	105	$	(59	)	$	472

Net realized gains (losses) in the table above include gains (losses) related to foreign exchange and fair value adjustments on insurance derivatives and exclude gains (losses) on S&P put options and futures held to partially offset the risk in the GLB reinsurance portfolio. Refer to Note 7 for additional information.

At June 30, 2014, reported liabilities for GMDB and GLB reinsurance were $107 million and $486 million, respectively, compared with $100 million and $427 million, respectively, at December 31, 2013. The reported liability for GLB reinsurance of $486 million at June 30, 2014, and $427 million at December 31, 2013, includes a fair value derivative adjustment of $241 million and $193 million, respectively. Reported liabilities for both GMDB and GLB reinsurance are determined using internal valuation models. Such valuations require considerable judgment and are subject to significant uncertainty. The valuation of these products is subject to fluctuations arising from, among other factors, changes in interest rates, changes in equity markets, changes in credit markets, changes in the allocation of the investments underlying annuitants’ account values, and assumptions regarding future policyholder behavior. These models and the related assumptions are continually reviewed by management and enhanced, as appropriate, based upon improvements in modeling assumptions and availability of more information, such as market conditions and demographics of in-force annuities.

Variable Annuity Net Amount at Risk

(i) Reinsurance covering the GMDB risk only

At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GMDB risk only was $601 million and $586 million, respectively.

For reinsurance programs covering the GMDB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no lapses or withdrawals;

• mortality according to 100 percent of the Annuity 2000 mortality table;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 1.5 percent and 2.5 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering the GMDB risk only, if all the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $676 million. This takes into account all applicable reinsurance treaty claim limits.

(ii) Reinsurance covering the GLB risk only

At June 30, 2014 and December 31, 2013, the net amount at risk from reinsurance programs covering the GLB risk only was $173 million and $136 million, respectively.

For reinsurance programs covering the GLB risk only, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no deaths, lapses, or withdrawals;

• policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

• for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.5 percent and 4.5 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty. 

(iii) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders

At June 30, 2014 and December 31, 2013, the GMDB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $69 million and $73 million, respectively.

At June 30, 2014 and December 31, 2013, the GLB net amount at risk from reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders was $142 million and $141 million, respectively.

These net amounts at risk reflect the interaction between the two types of benefits on any single policyholder (eliminating double-counting), and therefore the net amounts at risk should be considered additive.

For reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, the net amount at risk is defined as the present value of future claim payments under the following assumptions:

• policy account values and guaranteed values are fixed at the valuation date (June 30, 2014 and December 31, 2013, respectively);

• there are no lapses or withdrawals;

• mortality according to 100 percent of the Annuity 2000 mortality table;

• policyholders annuitize at a frequency most disadvantageous to ACE (in other words, annuitization at a level that maximizes claims taking into account the treaty limits) under the terms of the reinsurance contracts;

• for annuitizing policyholders, the GMIB claim is calculated using interest rates in line with those used in calculating the reserve;

• future claims are discounted in line with the discounting assumption used in the calculation of the benefit reserve averaging between 3.0 percent and 4.0 percent; and

• reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty.

The total claim amount payable on reinsurance programs covering both the GMDB and GLB risks on the same underlying policyholders, if all of the cedants’ policyholders were to die immediately at June 30, 2014 was approximately $64 million. This takes into account all applicable reinsurance treaty claim limits. Although there would be an increase in death claims resulting from 100 percent immediate mortality of all policyholders, the GLB claims would be zero.

The average attained age of all policyholders under sections i), ii), and iii) above, weighted by the guaranteed value of each reinsured policy, is approximately 69 years.

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Commitments, contingencies, and guarantees

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments, contingencies, and guarantees

Commitments, contingencies, and guarantees

a) Derivative instruments

Derivative instruments employed

ACE maintains positions in derivative instruments such as futures, options, swaps, and foreign currency forward contracts for which the primary purposes are to manage duration and foreign currency exposure, yield enhancement, or to obtain an exposure to a particular financial market. ACE also maintains positions in convertible securities that contain embedded derivatives. Investment derivative instruments are recorded in either Other assets (OA) or Accounts payable, accrued expenses, and other liabilities (AP), convertible bonds are recorded in Fixed maturities available for sale (FM AFS) and convertible equity securities are recorded in Equity securities (ES) in the consolidated balance sheets. These are the most numerous and frequent derivative transactions.

In addition, ACE from time to time purchases to be announced mortgage-backed securities (TBAs) as part of its investing activities.

Under reinsurance programs covering GLBs, ACE assumes the risk of GLBs, including GMIB and GMAB, associated with variable annuity contracts. The GMIB risk is triggered if, at the time the contract holder elects to convert the accumulated account value to a periodic payment stream (annuitize), the accumulated account value is not sufficient to provide a guaranteed minimum level of monthly income. The GMAB risk is triggered if, at contract maturity, the contract holder’s account value is less than a guaranteed minimum value. The GLB reinsurance product meets the definition of a derivative instrument. Benefit reserves in respect of GLBs are classified as Future policy benefits (FPB) while the fair value derivative adjustment is classified within AP. ACE also maintains positions in exchange-traded equity futures contracts and options on equity market indices to limit equity exposure in the GMDB and GLB blocks of business.

In relation to certain debt issuances, ACE from time to time enters into interest rate swap transactions for the purpose of either fixing or reducing borrowing costs. Although the use of these interest rate swaps has the economic effect of fixing or reducing borrowing costs on a net basis, gross interest expense on the related debt issuances is included in Interest expense while the settlements related to the interest rate swaps are reflected in Net realized gains (losses) in the consolidated statements of operations. At June 30, 2014, ACE had no in-force interest rate swaps.

All derivative instruments are carried at fair value with changes in fair value recorded in Net realized gains (losses) in the consolidated statements of operations. None of the derivative instruments are designated as hedges for accounting purposes.

The following table presents the balance sheet locations, fair values of derivative instruments in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:

				June 30, 2014							December 31, 2013
	Consolidated Balance Sheet Location	Fair Value					Notional Value/ Payment Provision		Fair Value					Notional Value/ Payment Provision
(in millions of U.S. dollars)		Derivative Asset		Derivative (Liability)					Derivative Asset		Derivative (Liability)
Investment and embedded derivative instruments
Foreign currency forward contracts	OA / (AP)	$	2	$	(4	)	$	1,296	$	3	$	(4	)	$	1,202
Cross-currency swaps	OA / (AP)	—		—			95		—		—			50
Options/Futures contracts on money market instruments	OA / (AP)	2		—			1,432		3		—			3,910
Futures contracts on notes and bonds	OA / (AP)	5		(6		)	1,372		13		(2		)	871
Convertible securities(1)	FM AFS / ES	333		—			280		302		—			254
		$	342	$	(10	)	$	4,475	$	321	$	(6	)	$	6,287
Other derivative instruments
Futures contracts on equities (2)	OA / (AP)	$	—	$	(15	)	$	1,468	$	—	$	(60	)	$	1,692
Options on equity market indices (2)	OA / (AP)	2		—			250		6		—			250
Other	OA / (AP)	16		(2		)	72		—		(2		)	8
		$	18	$	(17	)	$	1,790	$	6	$	(62	)	$	1,950
GLB(3)	(AP) / (FPB)	$	—	$	(486	)	$	315	$	—	$	(427	)	$	277

⁽¹⁾  Includes fair value of embedded derivatives.

⁽²⁾  Related to GMDB and GLB blocks of business.

⁽³⁾  Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

At June 30, 2014 and December 31, 2013, derivative liabilities of $14 million and $41 million, respectively, included in the table above were subject to a master netting agreement.  The remaining derivatives included in the table above were not subject to a master netting agreement. 

At both June 30, 2014 and December 31, 2013, our repurchase obligations of $1,401 million were fully collateralized.  At June 30, 2014 and December 31, 2013, our securities lending payable was $1,441 million and $1,633 million, respectively, and our securities lending collateral was $1,440 million and $1,632 million, respectively.  The securities lending collateral can only be accessed in the event that the institution borrowing the securities is in default under the lending agreement.  An indemnification agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of the securities on loan.  In contrast to securities lending programs, the use of cash received is not restricted for the repurchase obligations.

The following table presents net realized gains (losses) related to derivative instrument activity in the consolidated statements of operations:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Investment and embedded derivative instruments
Foreign currency forward contracts	$	(1	)	$	12		$	(4	)	$	17
All other futures contracts and options	(18		)	33			(40		)	40
Convertible securities(1)	4			(5		)	4			1
Total investment and embedded derivative instruments	$	(15	)	$	40		$	(40	)	$	58
GLB and other derivative instruments
GLB(2)	$	2		$	101		$	(46	)	$	429
Futures contracts on equities(3)	(71		)	(66		)	(88		)	(303		)
Options on equity market indices(3)	(1		)	(2		)	(3		)	(15		)
Other	9			(1		)	7			(1		)
Total GLB and other derivative instruments	$	(61	)	$	32		$	(130	)	$	110
	$	(76	)	$	72		$	(170	)	$	168

⁽¹⁾  Includes embedded derivatives.

⁽²⁾  Excludes foreign exchange gains (losses) related to GLB.

⁽³⁾  Related to GMDB and GLB blocks of business.

Derivative instrument objectives

(i) Foreign currency exposure management

A foreign currency forward contract (forward) is an agreement between participants to exchange specific foreign currencies at a future date. ACE uses forwards to minimize the effect of fluctuating foreign currencies.

(ii) Duration management and market exposure

Futures

Futures contracts give the holder the right and obligation to participate in market movements, determined by the index or underlying security on which the futures contract is based. Settlement is made daily in cash by an amount equal to the change in value of the futures contract times a multiplier that scales the size of the contract. Exchange-traded futures contracts on money market instruments, notes and bonds are used in fixed maturity portfolios to more efficiently manage duration, as substitutes for ownership of the money market instruments, bonds and notes without significantly increasing the risk in the portfolio. Investments in futures contracts may be made only to the extent that there are assets under management not otherwise committed.

Exchange-traded equity futures contracts are used to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

Options

An option contract conveys to the holder the right, but not the obligation, to purchase or sell a specified amount or value of an underlying security at a fixed price. Option contracts are used in the investment portfolio as protection against unexpected shifts in interest rates, which would affect the duration of the fixed maturity portfolio. By using options in the portfolio, the overall interest rate sensitivity of the portfolio can be reduced. Option contracts may also be used as an alternative to futures contracts in the synthetic strategy as described above.

Another use for option contracts is to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, reserves for GMDB and GLB reinsurance business.

The price of an option is influenced by the underlying security, expected volatility, time to expiration, and supply and demand.

The credit risk associated with the above derivative financial instruments relates to the potential for non-performance by counterparties. Although non-performance is not anticipated, in order to minimize the risk of loss, management monitors the creditworthiness of its counterparties and obtains collateral. The performance of exchange-traded instruments is guaranteed by the exchange on which they trade. For non-exchange-traded instruments, the counterparties are principally banks which must meet certain criteria according to our investment guidelines.

Cross-currency swaps

Cross-currency swaps are agreements under which two counterparties exchange interest payments and principal denominated in different currencies at a future date.  We use cross-currency swaps to reduce the foreign currency and interest rate risk by converting cash flows back into local currency.  We invest in foreign currency denominated investments to improve credit diversification and also to obtain better duration matching to our liabilities that is limited in the local currency market.

Other

Included within Other are derivatives intended to reduce potential losses which may arise from certain exposures in our insurance business.  The economic benefit provided by these derivatives is similar to purchased reinsurance.  For example, from time to time ACE may enter into crop derivative contracts to protect underwriting results in the event of a significant decline in commodity prices.  Also included within Other are certain life insurance products that meet the definition of a derivative instrument for accounting purposes. 

(iii) Convertible security investments

A convertible security is a debt instrument or preferred stock that can be converted into a predetermined amount of the issuer’s equity. The convertible option is an embedded derivative within the host instruments which are classified in the investment portfolio as either available for sale or as an equity security. ACE purchases convertible securities for their total return and not specifically for the conversion feature.

(iv) TBA

By acquiring TBAs, we make a commitment to purchase a future issuance of mortgage-backed securities. For the period between purchase of the TBAs and issuance of the underlying security, we account for our position as a derivative in the consolidated financial statements. ACE purchases TBAs both for their total return and for the flexibility they provide related to our mortgage-backed security strategy.

(v) GLB

Under the GLB program, as the assuming entity, ACE is obligated to provide coverage until the expiration or maturity of the underlying deferred annuity contracts or the expiry of the reinsurance treaty. Premiums received under the reinsurance treaties are classified as premium. Expected losses allocated to premiums received are classified as Future policy benefits and valued similar to GMDB reinsurance. Other changes in fair value, principally arising from changes in expected losses allocated to expected future premiums, are classified as Net realized gains (losses). Fair value represents management’s estimate of exit price and thus, includes a risk margin. We may recognize a realized loss for other changes in fair value due to adverse changes in the capital markets (e.g., declining interest rates and/or declining equity markets) and changes in actual or estimated future policyholder behavior (e.g., increased annuitization or decreased lapse rates) although we expect the business to be profitable. We believe this presentation provides the most meaningful disclosure of changes in the underlying risk within the GLB reinsurance programs for a given reporting period.

b) Other investments

At June 30, 2014, included in Other investments in the consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $2.1 billion. In connection with these investments, we have commitments that may require funding of up to $1.0 billion over the next several years. 

c) Taxation

As of June 30, 2014, $27 million of unrecognized tax benefits remains outstanding. It is reasonably possible that over the next twelve months, the amount of unrecognized tax benefits may change resulting from the re-evaluation of unrecognized tax benefits arising from examinations of taxing authorities. With few exceptions, ACE is no longer subject to state and local or non-U.S. income tax examinations for years before 2005.

d) Letters of credit

We did not renew our $500 million bilateral letter of credit facility that expired in June 2014.  We elected instead to satisfy our collateral obligations primarily with insurance trusts supported by our investment portfolio.

e) Legal proceedings

Our insurance subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages and, in some jurisdictions, direct actions by allegedly-injured persons seeking damages from policyholders. These lawsuits, involving claims on policies issued by our subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in our loss and loss expense reserves. In addition to claims litigation, we are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct, employment claims, regulatory activity, or disputes arising from our business ventures. In the opinion of management, our ultimate liability for these matters could be, but we believe is not likely to be, material to our consolidated financial condition and results of operations.

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Investments (Schedule Of Cost And Fair Value Of Equity Securities) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Cost	$ 874	$ 841
Gross unrealized appreciation	77	63
Gross unrealized depreciation	(44)	(67)
Fair value	$ 907	$ 837

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Shareholders' Equity (Detail)	3 Months Ended				6 Months Ended					1 Months Ended	3 Months Ended	6 Months Ended	1 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CHF	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CHF	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CHF	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CHF	Dec. 31, 2013 CHF	Nov. 30, 2013 November 2013 Stock Repurchase Plan [Member] USD ($)	Jun. 30, 2014 November 2013 Stock Repurchase Plan [Member] USD ($)	Jun. 30, 2014 November 2013 Stock Repurchase Plan [Member] USD ($)	Jul. 29, 2014 November 2013 Stock Repurchase Plan [Member] Subsequent Event [Member] USD ($)
Equity, Class of Treasury Stock [Line Items]
Share repurchase amount											$ 237,000,000	$ 569,000,000	$ 133,000,000
Repurchase of outstanding common shares, shares											2,306,000	5,793,882	1,281,630
Share repurchase authorization remains												1,370,000,000	1,240,000,000
Common Shares in treasury, shares	6,606,823	6,606,823			6,606,823	6,606,823			3,038,477
Stock repurchase program, authorized amount										$ 2,000,000,000
Increase to dividend approved by shareholders in January					$ 0.12
Dividends declared per common share	$ 0.65	0.58	$ 0.51	0.48	$ 1.40	1.23	$ 1.00	0.94
Par Value Reduction					$ 0.51
Common Shares, par value		26.01				26.01			27.04

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Information provided in connection with outstanding debt of subsidiaries

6 Months Ended

Jun. 30, 2014

Information Provided In Connection With Outstanding Debt Of Subsidiaries [Abstract]

Information provided in connection with outstanding debt of subsidiaries

Information provided in connection with outstanding debt of subsidiaries

The following tables present condensed consolidating financial information at June 30, 2014 and December 31, 2013, and for the three and six months endedJune 30, 2014 and 2013 for ACE Limited (Parent Guarantor) and ACE INA Holdings Inc. (Subsidiary Issuer). The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor. The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer.

During the third quarter of 2013, we determined that the Subsidiary Issuer columns presented in the previously issued condensed consolidating financial information should be presented on the equity method of accounting rather than on a consolidated basis. Accordingly, we have revised the disclosure to correct the Condensed Consolidating Statement of Operations and Comprehensive Income for the three and six months endedJune 30, 2013 and the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013. As a result of this revision to the Subsidiary Issuer condensed consolidating financial information, revenues and expenses and cash flows of the subsidiaries of ACE INA Holdings Inc. (Subsidiary Issuer) are now presented in the Other ACE Limited Subsidiaries column on a combined basis. In addition, we revised the Consolidating Adjustments and Eliminations column to correctly include all intercompany eliminations. Previously, this column reflected only ACE Limited parent company intercompany eliminations. We also revised the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013 to correct the presentation of negative cash associated with our affiliated notional cash pooling programs (Pools). In addition, certain items in the Condensed Consolidating Statement of Cash Flows for the six months endedJune 30, 2013 have been reclassified to conform to current period presentation. Also, the operating cash flows have been corrected to properly reflect certain intercompany transactions previously recorded in financing cash flows for the six months endedJune 30, 2013.

Total shareholders' equity and net income of the Subsidiary Issuer and Parent Guarantor were not impacted as a result of these revisions. The impact of the revisions was not material to the prior period consolidated financial statements taken as a whole. There was no impact on the consolidated amounts previously reported.

Condensed Consolidating Balance Sheet at June 30, 2014

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	33	$	11	$	63,576	$	—		$	63,620
Cash(1)	44		1		1,026		(477		)	594
Insurance and reinsurance balances receivable	—		—		6,169		(853		)	5,316
Reinsurance recoverable on losses and loss expenses	—		—		19,609		(8,841		)	10,768
Reinsurance recoverable on policy benefits	—		—		1,260		(1,026		)	234
Value of business acquired	—		—		514		—			514
Goodwill and other intangible assets	—		—		5,522		—			5,522
Investments in subsidiaries	30,207		18,946		—		(49,153		)	—
Due from subsidiaries and affiliates, net	305		—		—		(305		)	—
Other assets	4		295		14,300		(3,720		)	10,879
Total assets	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,589	$	(8,412	)	$	37,177
Unearned premiums	—		—		10,154		(1,858		)	8,296
Future policy benefits	—		—		5,804		(1,026		)	4,778
Due to (from) subsidiaries and affiliates, net	—		78		227		(305		)	—
Affiliated notional cash pooling programs(1)	—		477		—		(477		)	—
Short-term debt	—		450		1,401		—			1,851
Long-term debt	—		4,045		12		—			4,057
Trust preferred securities	—		309		—		—			309
Other liabilities	268		1,418		12,112		(3,144		)	10,654
Total liabilities	268		6,777		75,299		(15,222		)	67,122
Total shareholders’ equity	30,325		12,476		36,677		(49,153		)	30,325
Total liabilities and shareholders’ equity	$	30,593	$	19,253	$	111,976	$	(64,375	)	$	97,447

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Balance Sheet at December 31, 2013

(in millions of U.S. dollars)	ACE Limited (Parent Guarantor)		ACE INA Holdings Inc. (Subsidiary Issuer)		Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
Assets
Investments	$	32	$	10	$	60,886	$	—		$	60,928
Cash(1)	—		16		748		(185		)	579
Insurance and reinsurance balances receivable	—		—		5,835		(809		)	5,026
Reinsurance recoverable on losses and loss expenses	—		—		20,057		(8,830		)	11,227
Reinsurance recoverable on policy benefits	—		—		1,215		(997		)	218
Value of business acquired	—		—		536		—			536
Goodwill and other intangible assets	—		—		5,404		—			5,404
Investments in subsidiaries	28,351		18,105		—		(46,456		)	—
Due from subsidiaries and affiliates, net	844		—		—		(844		)
Other assets	5		258		13,788		(3,459		)	10,592
Total assets	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510
Liabilities
Unpaid losses and loss expenses	$	—	$	—	$	45,714	$	(8,271	)	$	37,443
Unearned premiums	—		—		9,242		(1,703		)	7,539
Future policy benefits	—		—		5,612		(997		)	4,615
Due to (from) subsidiaries and affiliates, net	—		714		130		(844		)	—
Affiliated notional cash pooling programs(1)	185		—		—		(185		)	—
Short-term debt	—		500		1,401		—			1,901
Long-term debt	—		3,795		12		—			3,807
Trust preferred securities	—		309		—		—			309
Other liabilities	222		1,318		11,655		(3,124		)	10,071
Total liabilities	407		6,636		73,766		(15,124		)	65,685
Total shareholders’ equity	28,825		11,753		34,703		(46,456		)	28,825
Total liabilities and shareholders’ equity	$	29,232	$	18,389	$	108,469	$	(61,580	)	$	94,510

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,559		$	—		$	4,559
Net premiums earned	—			—			4,332			—			4,332
Net investment income	1			1			554			—			556
Equity in earnings of subsidiaries	745			231			—			(976		)	—
Net realized gains (losses) including OTTI	—			8			(81		)	—			(73		)
Losses and loss expenses	—			—			2,388			—			2,388
Policy benefits	—			—			144			—			144
Policy acquisition costs and administrative expenses	22			8			1,294			—			1,324
Interest (income) expense	(9		)	70			11			—			72
Other (income) expense	(50		)	6			19			—			(25		)
Income tax expense (benefit)	4			(25		)	154			—			133
Net income	$	779		$	181		$	795		$	(976	)	$	779
Comprehensive income	$	1,348		$	511		$	1,364		$	(1,875	)	$	1,348

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	4,391		$	—		$	4,391
Net premiums earned	—			—			4,067			—			4,067
Net investment income	1			1			532			—			534
Equity in earnings of subsidiaries	842			257			—			(1,099		)	—
Net realized gains (losses) including OTTI	—			—			104			—			104
Losses and loss expenses	—			—			2,250			—			2,250
Policy benefits	—			—			110			—			110
Policy acquisition costs and administrative expenses	12			5			1,212			—			1,229
Interest (income) expense	(8		)	69			12			—			73
Other (income) expense	(57		)	6			88			—			37
Income tax expense (benefit)	5			(33		)	143			—			115
Net income	$	891		$	211		$	888		$	(1,099	)	$	891
Comprehensive loss	$	(499	)	$	(533	)	$	(502	)	$	1,035		$	(499	)

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Three Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	2,502		$	1,889	$	—		$	4,391
Net premiums earned	—			2,331			1,736		—			4,067
Net investment income	1			254			279		—			534
Equity in earnings of subsidiaries	842			—			—		(842		)	—
Net realized gains (losses) including OTTI	—			28			76		—			104
Losses and loss expenses	—			1,434			816		—			2,250
Policy benefits	—			63			47		—			110
Policy acquisition costs and administrative expenses	12			674			543		—			1,229
Interest (income) expense	(8		)	74			7		—			73
Other (income) expense	(57		)	65			29		—			37
Income tax expense	5			92			18		—			115
Net income	$	891		$	211		$	631	$	(842	)	$	891
Comprehensive income (loss)	$	(499	)	$	(533	)	$	1,375	$	(842	)	$	(499	)

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,744		$	—		$	8,744
Net premiums earned	—			—			8,302			—			8,302
Net investment income	1			1			1,107			—			1,109
Equity in earnings of subsidiaries	1,447			411			—			(1,858		)	—
Net realized gains (losses) including OTTI	—			7			(184		)	—			(177		)
Losses and loss expenses	—			—			4,549			—			4,549
Policy benefits	—			—			258			—			258
Policy acquisition costs and administrative expenses	39			14			2,534			—			2,587
Interest (income) expense	(19		)	141			21			—			143
Other (income) expense	(92		)	20			30			—			(42		)
Income tax expense (benefit)	7			(55		)	274			—			226
Net income	$	1,513		$	299		$	1,559		$	(1,858	)	$	1,513
Comprehensive income	$	2,456		$	777		$	2,502		$	(3,279	)	$	2,456

Condensed Consolidating Statements of Operations and Comprehensive Income (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries		Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	—		$	8,189	$	—		$	8,189
Net premiums earned	—			—			7,640		—			7,640
Net investment income	1			2			1,062		—			1,065
Equity in earnings of subsidiaries	1,756			445			—		(2,201		)	—
Net realized gains (losses) including OTTI	12			—			298		—			310
Losses and loss expenses	—			—			4,176		—			4,176
Policy benefits	—			—			241		—			241
Policy acquisition costs and administrative expenses	27			9			2,321		—			2,357
Interest (income) expense	(15		)	131			17		—			133
Other (income) expense	(95		)	15			107		—			27
Income tax expense (benefit)	8			(66		)	295		—			237
Net income	$	1,844		$	358		$	1,843	$	(2,201	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	216	$	318		$	217

Condensed Consolidating Statements of Operations and Comprehensive Income (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)		Consolidating Adjustments (2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net premiums written	$	—		$	4,584		$	3,605	$	—		$	8,189
Net premiums earned	—			4,337			3,303		—			7,640
Net investment income	1			502			562		—			1,065
Equity in earnings of subsidiaries	1,756			—			—		(1,756		)	—
Net realized gains (losses) including OTTI	12			38			260		—			310
Losses and loss expenses	—			2,687			1,489		—			4,176
Policy benefits	—			144			97		—			241
Policy acquisition costs and administrative expenses	27			1,300			1,030		—			2,357
Interest (income) expense	(15		)	141			7		—			133
Other (income) expense	(95		)	99			23		—			27
Income tax expense	8			148			81		—			237
Net income	$	1,844		$	358		$	1,398	$	(1,756	)	$	1,844
Comprehensive income (loss)	$	217		$	(534	)	$	2,290	$	(1,756	)	$	217

⁽¹⁾  Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾  Includes ACE Limited parent company eliminations.

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2014	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	83		$	(7	)	$	2,020		$	—		$	2,096
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(7,963		)	3			(7,960		)
Purchases of fixed maturities held to maturity	—			—			(129		)	—			(129		)
Purchases of equity securities	—			—			(64		)	—			(64		)
Sales of fixed maturities available for sale	—			—			3,845			(3		)	3,842
Sales of equity securities	—			—			45			—			45
Maturities and redemptions of fixed maturities available for sale	—			—			3,163			—			3,163
Maturities and redemptions of fixed maturities held to maturity	—			—			414			—			414
Net change in short-term investments	(1		)	(1		)	(293		)	—			(295		)
Net derivative instruments settlements	—			(7		)	(178		)	—			(185		)
Acquisition of subsidiaries (net of cash acquired of $4)	—			—			(172		)	—			(172		)
Other	—			(3		)	(115		)	—			(118		)
Net cash flows used for investing activities	(1		)	(11		)	(1,447		)	—			(1,459		)
Cash flows from financing activities
Dividends paid on Common Shares	(428		)	—			—			—			(428		)
Common Shares repurchased	—			—			(557		)	—			(557		)
Proceeds from issuance of long-term debt	—			699			—			—			699
Repayment of long-term debt	—			(500		)	—			—			(500		)
Proceeds from share-based compensation plans, including windfall tax benefits	—			—			75			—			75
Advances (to) from affiliates	575			(667		)	92			—			—
Net proceeds from (payments to) affiliated notional cash pooling programs(1)	(185		)	477			—			(292		)	—
Other	—			(6		)	92			—			86
Net cash flows (used for) from financing activities	(38		)	3			(298		)	(292		)	(625		)
Effect of foreign currency rate changes on cash and cash equivalents	—			—			3			—			3
Net increase (decrease) in cash	44			(15		)	278			(292		)	15
Cash – beginning of period(1)	—			16			748			(185		)	579
Cash – end of period(1)	$	44		$	1		$	1,026		$	(477	)	$	594

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (Revised)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries			Consolidating Adjustments and Eliminations			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from (used for) operating activities	$	18		$	(38	)	$	1,828		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			—			(10,907		)	103			(10,804		)
Purchases of fixed maturities held to maturity	—			—			(299		)	—			(299		)
Purchases of equity securities	—			—			(194		)	—			(194		)
Sales of fixed maturities available for sale	—			—			5,499			(103		)	5,396
Sales of equity securities	—			—			62			—			62
Maturities and redemptions of fixed maturities available for sale	—			—			4,112			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			—			908			—			908
Net change in short-term investments	—			3			(140		)	—			(137		)
Net derivative instruments settlements	—			—			(317		)	—			(317		)
Acquisition of subsidiaries (net of cash acquired of $38)	—			—			(977		)	—			(977		)
Capital contribution	(119		)	(1,010		)	—			1,129			—
Other	—			—			(126		)	—			(126		)
Net cash flows used for investing activities	(119		)	(1,007		)	(2,379		)	1,129			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Net proceeds from issuance of long-term debt	—			947			—			—			947
Advances (to) from affiliates	(352		)	352			—			—			—
Net payments to affiliated notional cash pooling programs(1)	513			(253		)	—			(260		)	—
Proceeds from exercise of options for Common Shares	6			—			56			—			62
Capital contribution	—			—			1,129			(1,129		)	—
Other	—			—			30			—			30
Net cash flows from (used for) financing activities	(2		)	1,046			1,003			(1,389		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			—			(26		)	—			(26		)
Net increase (decrease) in cash	(103		)	1			426			(260		)	64
Cash – beginning of period(1)	103			2			859			(349		)	615
Cash – end of period(1)	$	—		$	3		$	1,285		$	(609	)	$	679

⁽¹⁾  ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

Condensed Consolidating Statement of Cash Flows (As previously reported)

For the Six Months Ended June 30, 2013	ACE Limited (Parent Guarantor)			ACE INA Holdings Inc. (Subsidiary Issuer)			Other ACE Limited Subsidiaries and Eliminations(1)			Consolidating Adjustments(2)			ACE Limited Consolidated
(in millions of U.S. dollars)
Net cash flows from operating activities	$	95		$	876		$	837		$	—		$	1,808
Cash flows from investing activities
Purchases of fixed maturities available for sale	—			(6,604		)	(4,337		)	—			(10,941		)
Purchases of fixed maturities held to maturity	—			(284		)	(15		)	—			(299		)
Purchases of equity securities	—			(161		)	(33		)	—			(194		)
Sales of fixed maturities available for sale	—			3,571			1,825			—			5,396
Sales of equity securities	—			51			11			—			62
Maturities and redemptions of fixed maturities available for sale	—			1,839			2,273			—			4,112
Maturities and redemptions of fixed maturities held to maturity	—			613			295			—			908
Net derivative instruments settlements	—			10			(327		)	—			(317		)
Advances to affiliates	(429		)	—			—			429			—
Acquisition of subsidiaries (net of cash acquired of $38)	—			(977		)	—			—			(977		)
Capital contribution	(119		)	—			—			119			—
Other	—			(154		)	28			—			(126		)
Net cash flows used for investing activities	(548		)	(2,096		)	(280		)	548			(2,376		)
Cash flows from financing activities
Dividends paid on Common Shares	(169		)	—			—			—			(169		)
Common Shares repurchased	—			—			(212		)	—			(212		)
Proceeds from issuance of long-term debt	—			947			—			—			947
Proceeds from share-based compensation plans, including windfall tax benefits	6			(4		)	60			—			62
Advances from affiliates	—			352			77			(429		)	—
Capital contribution	—			—			119			(119		)	—
Other	—			30			—			—			30
Net cash flows from (used for) financing activities	(163		)	1,325			44			(548		)	658
Effect of foreign currency rate changes on cash and cash equivalents	—			(37		)	11			—			(26		)
Net increase (decrease) in cash	(616		)	68			612			—			64
Cash – beginning of period(3)	103			515			(3		)	—			615
Cash – end of period(3)	$	(513	)	$	583		$	609		$	—		$	679

⁽¹⁾ Includes all other subsidiaries of ACE Limited and intercompany eliminations.

⁽²⁾ Includes ACE Limited parent company eliminations and certain consolidating adjustments.

⁽³⁾ ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

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Commitments, contingencies, and guarantees (Tables)

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Balance Sheet Locations, Fair Values In An Asset Or (Liability) Position, And Notional Values/Payment Provisions Of Derivative Instruments

				June 30, 2014							December 31, 2013
	Consolidated Balance Sheet Location	Fair Value					Notional Value/ Payment Provision		Fair Value					Notional Value/ Payment Provision
(in millions of U.S. dollars)		Derivative Asset		Derivative (Liability)					Derivative Asset		Derivative (Liability)
Investment and embedded derivative instruments
Foreign currency forward contracts	OA / (AP)	$	2	$	(4	)	$	1,296	$	3	$	(4	)	$	1,202
Cross-currency swaps	OA / (AP)	—		—			95		—		—			50
Options/Futures contracts on money market instruments	OA / (AP)	2		—			1,432		3		—			3,910
Futures contracts on notes and bonds	OA / (AP)	5		(6		)	1,372		13		(2		)	871
Convertible securities(1)	FM AFS / ES	333		—			280		302		—			254
		$	342	$	(10	)	$	4,475	$	321	$	(6	)	$	6,287
Other derivative instruments
Futures contracts on equities (2)	OA / (AP)	$	—	$	(15	)	$	1,468	$	—	$	(60	)	$	1,692
Options on equity market indices (2)	OA / (AP)	2		—			250		6		—			250
Other	OA / (AP)	16		(2		)	72		—		(2		)	8
		$	18	$	(17	)	$	1,790	$	6	$	(62	)	$	1,950
GLB(3)	(AP) / (FPB)	$	—	$	(486	)	$	315	$	—	$	(427	)	$	277

⁽¹⁾  Includes fair value of embedded derivatives.

⁽²⁾  Related to GMDB and GLB blocks of business.

⁽³⁾  Includes both future policy benefits reserves and fair value derivative adjustment. Refer to Note 5 for additional information. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.

Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations

	Three Months Ended						Six Months Ended
	June 30						June 30
(in millions of U.S. dollars)	2014			2013			2014			2013
Investment and embedded derivative instruments
Foreign currency forward contracts	$	(1	)	$	12		$	(4	)	$	17
All other futures contracts and options	(18		)	33			(40		)	40
Convertible securities(1)	4			(5		)	4			1
Total investment and embedded derivative instruments	$	(15	)	$	40		$	(40	)	$	58
GLB and other derivative instruments
GLB(2)	$	2		$	101		$	(46	)	$	429
Futures contracts on equities(3)	(71		)	(66		)	(88		)	(303		)
Options on equity market indices(3)	(1		)	(2		)	(3		)	(15		)
Other	9			(1		)	7			(1		)
Total GLB and other derivative instruments	$	(61	)	$	32		$	(130	)	$	110
	$	(76	)	$	72		$	(170	)	$	168

⁽¹⁾  Includes embedded derivatives.

⁽²⁾  Excludes foreign exchange gains (losses) related to GLB.

⁽³⁾  Related to GMDB and GLB blocks of business.

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Commitments, Contingencies, And Guarantees (Net Realized Gains (Losses) Of Derivative Instrument Activity In Consolidated Statement Of Operations) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	$ (76)		$ 72		$ (170)		$ 168
Foreign Exchange Future [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(1)		12		(4)		17
All Other Futures Contracts And Options [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(18)		33		(40)		40
Convertibles and Bonds with Warrants Attached [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	4	[1]	(5)	[1]	4	[1]	1	[1]
Investment And Embedded Derivative Instruments [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(15)		40		(40)		58
Guaranteed Living Benefits [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	2	[2]	101	[2]	(46)	[2]	429	[2]
Single-Stock Future [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(71)	[3]	(66)	[3]	(88)	[3]	(303)	[3]
Options On Equity Market Indices [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(1)	[3]	(2)	[3]	(3)	[3]	(15)	[3]
Guaranteed Living Benefit And Other Derivative Instruments [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	(61)		32		(130)		110
Other Derivatives [Member]
Commitments Contingencies And Guarantees [Line Items]
Net realized gains (losses)	$ 9		$ (1)		$ 7		$ (1)

[1] (1) Includes embedded derivatives.

[2] (2) Excludes foreign exchange gains (losses) related to GLB

[3] (3) Related to GMDB and GLB blocks of business.

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Fair Value Measurements (Fair Value And Maximum Future Funding Commitments Related To Investments) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Fair Value [Member]
Fair Value And Maximum Future Funding Commitments Related To Investments [Line Items]
Financial	$ 274	$ 256
Real estate	322	322
Distressed	265	180
Mezzanine	303	276
Traditional	923	813
Vintage	11	13
Investment funds	385	428
Total of alternative investments	2,483	2,288
Maximum Future Funding Commitments [Member]
Fair Value And Maximum Future Funding Commitments Related To Investments [Line Items]
Financial	119	129
Real estate	63	92
Distressed	145	230
Mezzanine	222	252
Traditional	448	456
Vintage	0	0
Total of alternative investments	$ 997	$ 1,159
Expected Liquidation Period Lower Range [Member]
Fair Value And Maximum Future Funding Commitments Related To Investments [Line Items]
Liquidation period for financial alternative investments (in years)	5 years	5 years
Liquidation period for real estate alternative investments (in years)	3 years	3 years
Liquidation period for distressed alternative investments (in years)	6 years	6 years
Liquidation period for mezzanine alternative investments (in years)	6 years	6 years
Liquidation period for traditional alternative investments (in years)	3 years	3 years
Liquidation period for vintage alternative investments (in years)	1 year	1 year
Expected Liquidation Period Upper Range [Member]
Fair Value And Maximum Future Funding Commitments Related To Investments [Line Items]
Liquidation period for financial alternative investments (in years)	9 years	9 years
Liquidation period for real estate alternative investments (in years)	9 years	9 years
Liquidation period for distressed alternative investments (in years)	9 years	9 years
Liquidation period for mezzanine alternative investments (in years)	9 years	9 years
Liquidation period for traditional alternative investments (in years)	8 years	8 years
Liquidation period for vintage alternative investments (in years)	3 years	3 years

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Consolidated Statements Of Operations and Comprehensive Income Consolidated Statements of Operations and Comprehensive Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net realized gains (losses)	$ (73)	$ 104	$ (177)	$ 310
Income tax expense (benefit)	133	115	226	237
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member]
Net realized gains (losses)	21	38	27	73
Income tax expense (benefit)	$ 5	$ 7	$ 2	$ 12

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General

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

Basis of presentation

ACE Limited is a holding company incorporated in Zurich, Switzerland. ACE Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. ACE operates through five business segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Refer to Note 10 for additional information.

The interim unaudited consolidated financial statements, which include the accounts of ACE Limited and its subsidiaries (collectively, ACE, we, us, or our), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions have been eliminated.

The results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2013 Form 10-K.

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Information Provided In Connection With Outstanding Debt Of Subsidiaries (Condensed Consolidating Statement Of Cash Flows) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities	$ 2,096		$ 1,808
Purchases of fixed maturities available for sale	(7,960)		(10,804)
Purchases of fixed maturities held to maturity	(129)		(299)
Purchases of equity securities	(64)		(194)
Sales of fixed maturities available for sale	3,842		5,396
Sales of equity securities	45		62
Maturities and redemptions of fixed maturities available for sale	3,163		4,112
Maturities and redemptions of fixed maturities held to maturity	414		908
Payments to Acquire Short-term Investments	(295)		(137)
Net derivative instruments settlements	(185)		(317)
Acquisition of subsidiaries	(172)		(977)
Cash Acquired from Acquisition	4		38
Other	(118)		(126)
Net cash flows used for investing activities	(1,459)		(2,376)
Dividends paid on Common Shares	(428)		(169)
Common Shares repurchased	(557)		(212)
Proceeds from issuance of long-term debt	699		947
Repayment of long-term debt	(500)		0
Proceeds from share-based compensation plans, including windfall tax benefits	75		62
Other	86		30
Net cash flows (used for) from financing activities	(625)		658
Effect of foreign currency rate changes on cash and cash equivalents	3		(26)
Net increase in cash	15		64
Cash – beginning of period	579	[1],[2]	615	[3]
Cash – end of period	594	[1],[4]	679	[3]
ACE Limited (Parent Guarantor)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities	83		18
Sales of fixed maturities available for sale			0
Payments to Acquire Short-term Investments	(1)
Net derivative instruments settlements	0		0
Payment Of Contributions To Subsidiary			(119)
Net cash flows used for investing activities	(1)		(119)
Dividends paid on Common Shares	(428)		(169)
Proceeds from share-based compensation plans, including windfall tax benefits	0		6
Advances To From Affiliates Financing Activities	575		(352)
Net proceeds from (payments to) affiliated notional cash pooling program	(185)	[1]	513	[3]
Other			0
Net cash flows (used for) from financing activities	(38)		(2)
Net increase in cash	44		(103)
Cash – beginning of period	0	[1],[2]	103	[3]
Cash – end of period	44	[1],[4]	0	[3]
ACE INA Holdings Inc (Subsidiary Issuer)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities	(7)		(38)
Purchases of fixed maturities available for sale	0		0
Purchases of fixed maturities held to maturity	0		0
Purchases of equity securities	0		0
Sales of fixed maturities available for sale	0		0
Sales of equity securities	0		0
Maturities and redemptions of fixed maturities available for sale	0		0
Maturities and redemptions of fixed maturities held to maturity	0		0
Payments to Acquire Short-term Investments	(1)		3
Net derivative instruments settlements	(7)		0
Acquisition of subsidiaries	0		0
Payment Of Contributions To Subsidiary			(1,010)
Other	(3)		0
Net cash flows used for investing activities	(11)		(1,007)
Proceeds from issuance of long-term debt	699		947
Repayment of long-term debt	(500)
Proceeds from share-based compensation plans, including windfall tax benefits	0		0
Advances To From Affiliates Financing Activities	(667)		352
Net proceeds from (payments to) affiliated notional cash pooling program	477	[1]	(253)	[3]
Other	(6)		0
Net cash flows (used for) from financing activities	3		1,046
Effect of foreign currency rate changes on cash and cash equivalents	0		0
Net increase in cash	(15)		1
Cash – beginning of period	16	[1],[2]	2	[3]
Cash – end of period	1	[1],[4]	3	[3]
Other ACE Limited Subsidiaries
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities	2,020		1,828
Purchases of fixed maturities available for sale	(7,963)		(10,907)
Purchases of fixed maturities held to maturity	(129)		(299)
Purchases of equity securities	(64)		(194)
Sales of fixed maturities available for sale	3,845		5,499
Sales of equity securities	45		62
Maturities and redemptions of fixed maturities available for sale	3,163		4,112
Maturities and redemptions of fixed maturities held to maturity	414		908
Payments to Acquire Short-term Investments	(293)		(140)
Net derivative instruments settlements	(178)		(317)
Acquisition of subsidiaries	(172)		(977)
Payment Of Contributions To Subsidiary			0
Other	(115)		(126)
Net cash flows used for investing activities	(1,447)		(2,379)
Dividends paid on Common Shares	0
Common Shares repurchased	(557)		(212)
Repayment of long-term debt	0
Proceeds from share-based compensation plans, including windfall tax benefits	75		56
Advances To From Affiliates Financing Activities	92
Capital contribution			1,129
Net proceeds from (payments to) affiliated notional cash pooling program	0	[1]	0	[3]
Other	92		30
Net cash flows (used for) from financing activities	(298)		1,003
Effect of foreign currency rate changes on cash and cash equivalents	3		(26)
Net increase in cash	278		426
Cash – beginning of period	748	[1],[2]	859	[3]
Cash – end of period	1,026	[1],[4]	1,285	[3]
Consolidating Adjustments and Eliminations
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities	0		0
Purchases of fixed maturities available for sale	3		103
Purchases of fixed maturities held to maturity	0		0
Purchases of equity securities	0		0
Sales of fixed maturities available for sale	(3)		(103)
Sales of equity securities	0		0
Maturities and redemptions of fixed maturities available for sale	0		0
Maturities and redemptions of fixed maturities held to maturity	0		0
Payments to Acquire Short-term Investments			0
Net derivative instruments settlements	0		0
Acquisition of subsidiaries	0		0
Payment Of Contributions To Subsidiary			1,129
Other	0		0
Net cash flows used for investing activities	0		1,129
Dividends paid on Common Shares	0
Common Shares repurchased	0		0
Repayment of long-term debt	0
Proceeds from share-based compensation plans, including windfall tax benefits	0		0
Advances To From Affiliates Financing Activities	0		0
Capital contribution			(1,129)
Net proceeds from (payments to) affiliated notional cash pooling program	(292)	[1]	(260)	[3]
Other			0
Net cash flows (used for) from financing activities	(292)		(1,389)
Effect of foreign currency rate changes on cash and cash equivalents	0		0
Net increase in cash	(292)		(260)
Cash – beginning of period	(185)	[1],[2]	(349)	[3]
Cash – end of period	(477)	[1],[4]	(609)	[3]
Scenario, Previously Reported [Member]
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities			1,808
Purchases of fixed maturities available for sale			(10,941)
Purchases of fixed maturities held to maturity			(299)
Purchases of equity securities			(194)
Sales of fixed maturities available for sale			5,396
Sales of equity securities			62
Maturities and redemptions of fixed maturities available for sale			4,112
Maturities and redemptions of fixed maturities held to maturity			908
Net derivative instruments settlements			(317)
Acquisition of subsidiaries			(977)
Other			(126)
Net cash flows used for investing activities			(2,376)
Dividends paid on Common Shares			(169)
Common Shares repurchased			(212)
Proceeds from issuance of long-term debt			947
Proceeds from share-based compensation plans, including windfall tax benefits			62
Other			30
Net cash flows (used for) from financing activities			658
Effect of foreign currency rate changes on cash and cash equivalents			(26)
Net increase in cash			64
Cash – beginning of period			615
Cash – end of period			679
Scenario, Previously Reported [Member] | ACE Limited (Parent Guarantor)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities			95
Maturities and redemptions of fixed maturities held to maturity			0
Net derivative instruments settlements			0
Payments To From Affiliates			(429)
Payment Of Contributions To Subsidiary			(119)	[5]
Net cash flows used for investing activities			(548)
Dividends paid on Common Shares			(169)
Proceeds from issuance of long-term debt			0
Proceeds from share-based compensation plans, including windfall tax benefits			6
Advances To From Affiliates Financing Activities			0
Capital contribution			0
Net cash flows (used for) from financing activities			(163)
Net increase in cash			(616)
Cash – beginning of period			103	[6]
Cash – end of period			(513)	[6]
Scenario, Previously Reported [Member] | ACE INA Holdings Inc (Subsidiary Issuer)
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities			876
Purchases of fixed maturities available for sale			(6,604)
Purchases of fixed maturities held to maturity			(284)
Purchases of equity securities			(161)
Sales of fixed maturities available for sale			3,571
Sales of equity securities			51
Maturities and redemptions of fixed maturities available for sale			1,839
Maturities and redemptions of fixed maturities held to maturity			613
Net derivative instruments settlements			10
Payments To From Affiliates			0
Acquisition of subsidiaries			(977)
Payment Of Contributions To Subsidiary			0
Other			(154)
Net cash flows used for investing activities			(2,096)
Proceeds from issuance of long-term debt			947
Proceeds from share-based compensation plans, including windfall tax benefits			(4)
Advances To From Affiliates Financing Activities			352
Capital contribution			0
Other			30
Net cash flows (used for) from financing activities			1,325
Effect of foreign currency rate changes on cash and cash equivalents			(37)
Net increase in cash			68
Cash – beginning of period			515	[6]
Cash – end of period			583	[6]
Scenario, Previously Reported [Member] | Other ACE Limited Subsidiaries
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Net cash flows from operating activities			837
Purchases of fixed maturities available for sale			(4,337)	[7]
Purchases of fixed maturities held to maturity			(15)
Purchases of equity securities			(33)	[7]
Sales of fixed maturities available for sale			1,825	[7]
Sales of equity securities			11	[7]
Maturities and redemptions of fixed maturities available for sale			2,273	[7]
Maturities and redemptions of fixed maturities held to maturity			295	[7]
Net derivative instruments settlements			(327)	[7]
Payments To From Affiliates			0	[7]
Payment Of Contributions To Subsidiary			0	[7]
Other			28
Net cash flows used for investing activities			(280)	[7]
Common Shares repurchased			(212)	[7]
Proceeds from issuance of long-term debt			0	[7]
Proceeds from share-based compensation plans, including windfall tax benefits			60	[7]
Advances To From Affiliates Financing Activities			77	[7]
Capital contribution			119	[7]
Net cash flows (used for) from financing activities			44	[7]
Effect of foreign currency rate changes on cash and cash equivalents			11	[7]
Net increase in cash			612	[7]
Cash – beginning of period			(3)	[6],[7]
Cash – end of period			609	[6],[7]
Scenario, Previously Reported [Member] | Consolidating Adjustments and Eliminations
Information Provided In Connection With Outstanding Debt Of Subsidiaries [Line Items]
Purchases of fixed maturities available for sale			0	[5]
Purchases of equity securities			0	[5]
Sales of fixed maturities available for sale			0	[5]
Sales of equity securities			0	[5]
Maturities and redemptions of fixed maturities available for sale			0	[5]
Maturities and redemptions of fixed maturities held to maturity			0	[5]
Net derivative instruments settlements			0	[5]
Payments To From Affiliates			429	[5]
Payment Of Contributions To Subsidiary			119	[5]
Net cash flows used for investing activities			548	[5]
Common Shares repurchased			0	[5]
Proceeds from issuance of long-term debt			0	[5]
Proceeds from share-based compensation plans, including windfall tax benefits			0	[5]
Advances To From Affiliates Financing Activities			(429)	[5]
Capital contribution			(119)	[5]
Net cash flows (used for) from financing activities			(548)	[5]
Effect of foreign currency rate changes on cash and cash equivalents			0	[5]
Net increase in cash			0	[5]
Cash – beginning of period			0	[5]
Cash – end of period			$ 0	[5],[6]

[1] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014 and December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[2] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At December 31, 2013, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[3] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[4] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2014, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[5] Includes ACE Limited parent company eliminations and certain consolidating adjustments.

[6] ACE maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various ACE entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual ACE accounts are translated daily into a single currency and pooled on a notional basis. Individual ACE entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At June 30, 2013 and December 31, 2012, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.

[7] Includes all other subsidiaries of ACE Limited and intercompany eliminations.

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Segment information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Operations By Segment

For the Three Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,635		$	388	$	1,760	$	278		$	498		$	—		$	4,559
Net premiums earned	1,542			330		1,709		261			490			—			4,332
Losses and loss expenses	1,016			287		830		109			146			—			2,388
Policy benefits	—			—		—		—			144			—			144
Policy acquisition costs	152			23		402		60			121			—			758
Administrative expenses	175			1		256		14			73			47			566
Underwriting income (loss)	199			19		221		78			6			(47		)	476
Net investment income	265			6		136		80			66			3			556
Net realized gains (losses) including OTTI	(11		)	8		14		(15		)	(72		)	3			(73		)
Interest expense	2			—		1		2			3			64			72
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			(17		)	—			(17		)
Other	(24		)	9		8		(10		)	4			5			(8		)
Income tax expense (benefit)	91			5		55		10			12			(40		)	133
Net income (loss)	$	384		$	19	$	307	$	141		$	(2	)	$	(70	)	$	779

For the Three Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance		Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	1,529		$	453	$	1,630	$	292	$	487	$	—		$	4,391
Net premiums earned	1,428			351		1,563		245		480		—			4,067
Losses and loss expenses	950			293		768		93		145		1			2,250
Policy benefits	—			—		—		—		110		—			110
Policy acquisition costs	142			20		360		48		95		—			665
Administrative expenses	159			3		251		12		86		53			564
Underwriting income (loss)	177			35		184		92		44		(54		)	478
Net investment income	250			7		136		71		63		7			534
Net realized gains (losses) including OTTI	28			1		8		31		36		—			104
Interest expense	3			—		2		1		4		63			73
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—		11		—			11
Other	(10		)	8		17		2		3		6			26
Income tax expense (benefit)	91			8		50		7		10		(51		)	115
Net income (loss)	$	371		$	27	$	259	$	184	$	115	$	(65	)	$	891

For the Six Months Ended June 30, 2014	Insurance – North American P&C			Insurance – North American Agriculture			Insurance – Overseas General		Global Reinsurance			Life			Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	3,053		$	582		$	3,531	$	586		$	992		$	—		$	8,744
Net premiums earned	3,029			433			3,321		545			974			—			8,302
Losses and loss expenses	1,956			413			1,647		235			297			1			4,549
Policy benefits	—			—			—		—			258			—			258
Policy acquisition costs	311			28			788		127			232			—			1,486
Administrative expenses	336			2			506		28			141			88			1,101
Underwriting income (loss)	426			(10		)	380		155			46			(89		)	908
Net investment income	535			13			268		157			130			6			1,109
Net realized gains (losses) including OTTI	(20		)	6			4		(23		)	(148		)	4			(177		)
Interest expense	5			—			2		3			6			127			143
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—		—			(11		)	—			(11		)
Other	(44		)	17			2		(29		)	11			12			(31		)
Income tax expense (benefit)	174			(2		)	92		20			22			(80		)	226
Net income (loss)	$	806		$	(6	)	$	556	$	295		$	—		$	(138	)	$	1,513

For the Six Months Ended June 30, 2013	Insurance – North American P&C			Insurance – North American Agriculture		Insurance – Overseas General		Global Reinsurance			Life		Corporate			ACE Consolidated
(in millions of U.S. dollars)
Net premiums written	$	2,813		$	566	$	3,250	$	571		$	989	$	—		$	8,189
Net premiums earned	2,766			403		3,022		492			957		—			7,640
Losses and loss expenses	1,828			325		1,515		199			302		7			4,176
Policy benefits	—			—		—		—			241		—			241
Policy acquisition costs	285			24		699		96			175		—			1,279
Administrative expenses	284			8		487		24			171		104			1,078
Underwriting income (loss)	369			46		321		173			68		(111		)	866
Net investment income	501			13		268		143			126		14			1,065
Net realized gains (losses) including OTTI	54			1		42		51			163		(1		)	310
Interest expense	1			—		3		2			8		119			133
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—		—			7		—			7
Other	(25		)	16		16		(6		)	3		16			20
Income tax expense (benefit)	185			10		96		15			23		(92		)	237
Net income (loss)	$	763		$	34	$	516	$	356		$	316	$	(141	)	$	1,844

Net Premiums Earned For Segment By Product

(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Three Months Ended June 30, 2014
Insurance – North American P&C	$	423	$	1,018	$	101	$	1,542
Insurance – North American Agriculture	330		—		—		330
Insurance – Overseas General	727		395		587		1,709
Global Reinsurance	132		129		—		261
Life	—		—		490		490
	$	1,612	$	1,542	$	1,178	$	4,332
For the Three Months Ended June 30, 2013
Insurance – North American P&C	$	368	$	967	$	93	$	1,428
Insurance – North American Agriculture	351		—		—		351
Insurance – Overseas General	658		374		531		1,563
Global Reinsurance	132		113		—		245
Life	—		—		480		480
	$	1,509	$	1,454	$	1,104	$	4,067
(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Six Months Ended June 30, 2014
Insurance – North American P&C	$	828	$	1,999	$	202	$	3,029
Insurance – North American Agriculture	433		—		—		433
Insurance – Overseas General	1,420		764		1,137		3,321
Global Reinsurance	286		259		—		545
Life	—		—		974		974
	$	2,967	$	3,022	$	2,313	$	8,302
For the Six Months Ended June 30, 2013
Insurance – North American P&C	$	715	$	1,869	$	182	$	2,766
Insurance – North American Agriculture	403		—		—		403
Insurance – Overseas General	1,243		713		1,066		3,022
Global Reinsurance	267		225		—		492
Life	—		—		957		957
	$	2,628	$	2,807	$	2,205	$	7,640

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Investments (Schedule Of Components Of Restricted Assets) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Trust funds	$ 10,554	$ 11,315
Deposits with non-U.S. regulatory authorities	1,969	1,970
Assets pledged under repurchase agreements	1,451	1,435
Deposits with U.S. regulatory authorities	1,336	1,334
Other pledged assets	459	391
Total restricted assets	$ 15,769	$ 16,445

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Earnings per share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings per share

Earnings per share

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars, except share and per share data)	2014		2013		2014		2013
Numerator:
Net income	$	779	$	891	$	1,513	$	1,844
Denominator:
Denominator for basic earnings per share:
Weighted-average shares outstanding	337,846,228		341,047,290		338,353,260		340,913,450
Denominator for diluted earnings per share:
Share-based compensation plans	3,286,359		3,053,975		3,267,499		3,120,263
Weighted-average shares outstanding and assumed conversions	341,132,587		344,101,265		341,620,759		344,033,713
Basic earnings per share	$	2.30	$	2.61	$	4.47	$	5.41
Diluted earnings per share	$	2.28	$	2.59	$	4.43	$	5.36
Potential anti-dilutive share conversions	1,778,040		1,811,030		1,220,731		1,231,105

Excluded from weighted-average shares outstanding and assumed conversions is the impact of securities that would have been anti-dilutive during the respective periods.