Segment information

3 Months Ended

Mar. 31, 2015

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.

Corporate includes the results of ACE’s non-insurance subsidiaries, including ACE Limited, ACE Group Management and Holdings Ltd., and ACE INA Holdings, Inc.  Corporate results consist primarily of interest expense, corporate staff expenses and other expenses not attributable to specific reportable segments, and intersegment eliminations.

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 on crop derivatives as a component of underwriting income. For example, for the three months ended March 31, 2014, underwriting loss in our Insurance – North American Agriculture segment was $31 million. This amount includes $2 million of realized losses 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 March 31, 2015, Life underwriting income of $77 million includes Net investment income of $66 million and gains from fair value changes in separate account assets of $11 million.

The following tables present the Statement of Operations by segment:

For the Three Months Ended March 31, 2015	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	$	1,430		$	88		$	1,794		$	273		$	491		$	—		$	4,076
Net premiums earned	1,526			64			1,637			226			474			—			3,927
Losses and loss expenses	1,035			22			814			99			152			—			2,122
Policy benefits	—			—			—			—			142			—			142
Policy acquisition costs	161			(4		)	389			54			107			—			707
Administrative expenses	171			(1		)	256			12			73			43			554
Underwriting income (loss)	159			47			178			61			—			(43		)	402
Net investment income	263			6			138			75			66			3			551
Net realized gains (losses) including OTTI	(6		)	—			(10		)	(11		)	(59		)	(3		)	(89		)
Interest expense	2			—			1			1			1			63			68
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—			—			(11		)	—			(11		)
Other	(7		)	8			17			(5		)	(12		)	5			6
Income tax expense (benefit)	80			10			52			8			9			(39		)	120
Net income (loss)	$	341		$	35		$	236		$	121		$	20		$	(72	)	$	681

For the Three Months Ended March 31, 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	$	1,418		$	194		$	1,771		$	308		$	494		$	—		$	4,185
Net premiums earned	1,487			103			1,612			284			484			—			3,970
Losses and loss expenses	940			126			817			126			151			1			2,161
Policy benefits	—			—			—			—			114			—			114
Policy acquisition costs	159			5			386			67			111			—			728
Administrative expenses	161			1			250			14			68			41			535
Underwriting income (loss)	227			(29		)	159			77			40			(42		)	432
Net investment income	270			7			132			77			64			3			553
Net realized gains (losses) including OTTI	(9		)	(2		)	(10		)	(8		)	(76		)	1			(104		)
Interest expense	3			—			1			1			3			63			71
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—			—			6			—			6
Other	(20		)	8			(6		)	(19		)	7			7			(23		)
Income tax expense (benefit)	83			(7		)	37			10			10			(40		)	93
Net income (loss)	$	422		$	(25	)	$	249		$	154		$	2		$	(68	)	$	734

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 March 31, 2015
Insurance – North American P&C	$	410	$	1,015	$	101	$	1,526
Insurance – North American Agriculture	64		—		—		64
Insurance – Overseas General	728		382		527		1,637
Global Reinsurance	117		109		—		226
Life	—		—		474		474
	$	1,319	$	1,506	$	1,102	$	3,927
For the Three Months Ended March 31, 2014
Insurance – North American P&C	$	405	$	981	$	101	$	1,487
Insurance – North American Agriculture	103		—		—		103
Insurance – Overseas General	693		369		550		1,612
Global Reinsurance	154		130		—		284
Life	—		—		484		484
	$	1,355	$	1,480	$	1,135	$	3,970