Segment information

9 Months Ended

Sep. 30, 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, Chubb integration 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 September 30, 2015, underwriting income in our Insurance – North American Agriculture segment was $73 million. This amount includes $4 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 September 30, 2015, Life underwriting income of $64 million includes Net investment income of $66 million and losses from fair value changes in separate account assets of $49 million.

The following tables present the Statement of Operations by segment:

For the Three Months Ended September 30, 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	$	1,711		$	737		$	1,584		$	185		$	492		$	—		$	4,709
Net premiums earned	1,682			739			1,615			203			480			—			4,719
Losses and loss expenses	1,175			620			674			20			153			1			2,643
Policy benefits	—			—			—			—			89			—			89
Policy acquisition costs	155			42			405			52			117			—			771
Administrative expenses	192			—			246			12			74			44			568
Underwriting income (loss)	160			77			290			119			47			(45		)	648
Net investment income	266			5			132			76			66			4			549
Net realized gains (losses) including OTTI	(33		)	(4		)	(13		)	(14		)	(326		)	(7		)	(397		)
Interest expense	3			—			1			1			1			62			68
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—			—			49			—			49
Other	(16		)	(1		)	(6		)	(2		)	(13		)	1			(37		)
Amortization of intangible assets	31			8			12			—			—			—			51
Chubb integration expenses	—			—			—			—			—			9			9
Income tax expense (benefit)	70			15			76			8			8			(45		)	132
Net income (loss)	$	305		$	56		$	326		$	174		$	(258	)	$	(75	)	$	528

For the Three Months Ended September 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	$	1,541		$	764		$	1,719		$	208		$	497		$	—		$	4,729
Net premiums earned	1,518			766			1,726			255			489			—			4,754
Losses and loss expenses	1,053			686			707			92			145			1			2,684
Policy benefits	—			—			—			—			125			—			125
Policy acquisition costs	169			41			418			74			123			—			825
Administrative expenses	165			3			258			13			71			44			554
Underwriting income (loss)	131			36			343			76			25			(45		)	566
Net investment income	277			6			130			81			69			3			566
Net realized gains (losses) including OTTI	(5		)	45			(75		)	6			(89		)	(2		)	(120		)
Interest expense	2			—			2			1			4			61			70
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—			—			6			—			6
Other	(31		)	(1		)	(13		)	(10		)	(3		)	6			(52		)
Amortization of intangible assets	—			8			19			—			—			—			27
Income tax expense (benefit)	73			23			97			11			12			(40		)	176
Net income (loss)	$	359		$	57		$	293		$	161		$	(14	)	$	(71	)	$	785

For the Nine Months Ended September 30, 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	$	5,116		$	1,204		$	5,047		$	719		$	1,483		$	—		$	13,569
Net premiums earned	4,896			1,124			4,896			649			1,441			—			13,006
Losses and loss expenses	3,330			913			2,304			191			442			2			7,182
Policy benefits	—			—			—			—			384			—			384
Policy acquisition costs	446			61			1,190			166			342			—			2,205
Administrative expenses	552			3			756			37			221			131			1,700
Underwriting income (loss)	568			147			646			255			52			(133		)	1,535
Net investment income	798			17			409			230			198			10			1,662
Net realized gains (losses) including OTTI	(39		)	(6		)	(10		)	(20		)	(282		)	(3		)	(360		)
Interest expense	7			—			3			3			4			190			207
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—			—			—			32			—			32
Other	(32		)	1			(19		)	(10		)	(43		)	10			(93		)
Amortization of intangible assets	63			22			50			—			1			—			136
Chubb integration expenses	—			—			—			—			—			9			9
Income tax expense (benefit)	239			29			197			23			27			(120		)	395
Net income (loss)	$	1,050		$	106		$	814		$	449		$	(53	)	$	(215	)	$	2,151

For the Nine Months Ended September 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	$	4,594		$	1,346	$	5,250		$	794		$	1,489		$	—		$	13,473
Net premiums earned	4,547			1,199		5,047			800			1,463			—			13,056
Losses and loss expenses	3,009			1,099		2,354			327			442			2			7,233
Policy benefits	—			—		—			—			383			—			383
Policy acquisition costs	480			69		1,206			201			355			—			2,311
Administrative expenses	501			5		764			41			212			132			1,655
Underwriting income (loss)	557			26		723			231			71			(134		)	1,474
Net investment income	812			19		398			238			199			9			1,675
Net realized gains (losses) including OTTI	(25		)	51		(71		)	(17		)	(237		)	2			(297		)
Interest expense	7			—		4			4			10			188			213
Other (income) expense:
(Gains) losses from fair value changes in separate account assets	—			—		—			—			(5		)	—			(5		)
Other	(75		)	—		(44		)	(39		)	6			18			(134		)
Amortization of intangible assets	—			24		52			—			2			—			78
Income tax expense (benefit)	247			21		189			31			34			(120		)	402
Net income (loss)	$	1,165		$	51	$	849		$	456		$	(14	)	$	(209	)	$	2,298

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 September 30, 2015
Insurance – North American P&C	$	511	$	1,063	$	108	$	1,682
Insurance – North American Agriculture	739		—		—		739
Insurance – Overseas General	706		386		523		1,615
Global Reinsurance	104		99		—		203
Life	—		—		480		480
	$	2,060	$	1,548	$	1,111	$	4,719
For the Three Months Ended September 30, 2014
Insurance – North American P&C	$	420	$	993	$	105	$	1,518
Insurance – North American Agriculture	766		—		—		766
Insurance – Overseas General	744		394		588		1,726
Global Reinsurance	149		106		—		255
Life	—		—		489		489
	$	2,079	$	1,493	$	1,182	$	4,754
(in millions of U.S. dollars)	Property & All Other		Casualty		Life, Accident & Health		ACE Consolidated
For the Nine Months Ended September 30, 2015
Insurance – North American P&C	$	1,428	$	3,157	$	311	$	4,896
Insurance – North American Agriculture	1,124		—		—		1,124
Insurance – Overseas General	2,163		1,159		1,574		4,896
Global Reinsurance	323		326		—		649
Life	—		—		1,441		1,441
	$	5,038	$	4,642	$	3,326	$	13,006
For the Nine Months Ended September 30, 2014
Insurance – North American P&C	$	1,248	$	2,992	$	307	$	4,547
Insurance – North American Agriculture	1,199		—		—		1,199
Insurance – Overseas General	2,164		1,158		1,725		5,047
Global Reinsurance	435		365		—		800
Life	—		—		1,463		1,463
	$	5,046	$	4,515	$	3,495	$	13,056