ACE Limited

Financial Supplement

June 30, 2003

Investor Contact: Helen M. Wilson (441) 299-9283 (441) 292-8675 fax email: investorrelations@ace.bm This report is for informational purposes only. It should be read in conjuction with documents filed by ACE Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

Any forward-looking statements made in this financial supplement reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. For example, the Company’s forward-looking statements concerning reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience which differs from the Company’s assumptions, uncertainties in the reserving or settlement process, the impact of aggregate policy coverage limits, the impact of bankruptcies of various asbestos producers and related business, new theories of liability, judicial and legislative developments, litigation tactics, credit developments among reinsurers and other factors identified in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and in the Company’s earnings press release, which is available on the Company’s website. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ACE Limited

Financial Supplement Table of Contents

		Page
I. Financial Highlights		1
II. Consolidated Results
	—   Consolidated Statements of Operations	2
	—   Computation of Basic and Diluted Earnings Per Share	3
	—   Summary Consolidated Balance Sheets	4
	—   Consolidated Property and Casualty excluding Financial Services	5
	—   Consolidated Results—Consecutive Quarters	6
	—   Premiums by Line of Business	7
III. Segment Results
	—   Consolidating Statement of Operations	8-11
	—   Insurance—  North American	12
	—   Premiums by Line of Business	13
	—   Insurance—  Overseas General	14
	—   Premiums by Line of Business	15
	—   Key Components	16
	—   Global Reinsurance	17
	—   Premiums by Line of Business	18
	—   Key Components	19
	—   Financial Services	20
	—   Key Components—Financial Services	21
	—   Key Components—Financial Guaranty	22-26
IV. Balance Sheet Details
	—   Reinsurance Recoverable	27-30
	—   Unpaid Loss and Loss Expenses	31
	—   Asbestos and Environmental Reserves; September 11, 2001 Tragedy	32
	—   Capital Structure	33
	—   Investment Portfolio	34-35
	—   Realized and Unrealized Gains (Losses)	36
V. Reconciliation to Generally Accepted Accounting Principles
	—   Regulation G, Non-GAAP Financial Measures	37
	—   Consolidated Statement of Comprehensive Income	37
	—   Reconciliation of Book Value Per Ordinary Share to Diluted BookValue Per Ordinary Share	38
VI. Glossary		39

ACE Limited

Financial Highlights

(in millions of U.S. dollars, except per share data and ratios)

(Unaudited)

	Three months ended June 30				% Change 2Q-03 vs.	Six months ended June 30				% Change YTD-03 vs.
	2003		2002		2Q-02	2003		2002		YTD-02
Gross premiums written	$	3,405	$	2,929	16%	$	7,518	$	6,047	24%
Net premiums written	$	2,406	$	1,875	28%	$	5,336	$	3,861	38%
Net premiums earned	$	2,306	$	1,576	46%	$	4,378	$	2,936	49%
Net investment income	$	211	$	201	5%	$	417	$	401	4%
Income excluding net realized gains (losses)	$	286	$	229	25%	$	565	$	445	27%
Net income	$	371	$	104	257%	$	618	$	302	105%
Comprehensive income	$	646	$	211	206%	$	991	$	324	206%
Operating cash flow	$	978	$	427	129%	$	1,578	$	571	176%
P&C combined ratio: (1)
Loss and loss expense ratio		63.4%		60.1%			62.6%		60.1%
Underwriting and administrative expense ratio		28.3%		31.7%			28.5%		32.1%
Combined ratio		91.7%		91.8%			91.1%		92.2%
Annualized return on Ordinary shareholders’ equity		15.6%		14.6%			15.7%		13.8%
Annualized return on Ordinary shareholders’ equity excluding FAS 115		17.2%		14.9%			17.4%		14.2%
Diluted earnings per share:
Income excluding net realized gains (losses)	$	1.01	$	0.82	23%	$	2.04	$	1.59	28%
Net income	$	1.32	$	0.36	267%	$	2.23	$	1.06	110%
Diluted book value per Ordinary Share	$	27.24	$	24.21	13%	$	27.24	$	24.21	13%
Diluted tangible book value per Ordinary Share	$	17.91	$	14.68	22%	$	17.91	$	14.68	22%
Weighted average diluted Ordinary Shares outstanding		275.2		271.2			270.7		271.2

(1) Property and casualty operations only.

Page 1

ACE Limited

Consolidated Statements of Operations

(in millions of U.S dollars)

(Unaudited)

	Three months ended June 30						% Change 2Q-03 vs.	Six months ended June 30						% Change YTD-03 vs.
	2003			2002			2Q-02	2003			2002			YTD-02
Gross premiums written	$	3,405		$	2,929		16%	$	7,518		$	6,047		24%
Net premiums written		2,406			1,875		28%		5,336			3,861		38%
Net premiums earned		2,306			1,576		46%		4,378			2,936		49%
Losses and loss expenses		1,459			961		52%		2,742			1,814		51%
Life and annuity benefits		44			23		91%		92			46		100%
Policy acquisition costs		334			234		43%		630			432		46%
Administrative expenses		287			231		24%		547			428		28%
Underwriting income		182			127		43%		367			216		70%
Net investment income		211			201		5%		417			401		4%
Other income (expense)		1			(12	)	NM		(5	)		(7	)	NM
Interest expense		43			52		-17%		88			98		-10%
Income tax expense		65			35		86%		126			67		88%
Income excluding net realized gains (losses)		286			229		25%		565			445		27%
Net realized gains (losses)		107			(140	)			67			(166	)
Tax effect of net realized gains (losses)		(22	)		15				(14	)		23
Net income	$	371		$	104		257%	$	618		$	302		105%

Page 2

ACE Limited

Computation of Basic and Diluted Earnings Per Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)

	Three months ended June 30						Six months ended June 30
	2003			2002			2003			2002
Numerator:
Income excluding net realized gains (losses)	$	286		$	229		$	565		$	445
Perpetual preferred dividend		(4	)		—			(4	)		—
Mezzanine equity dividend		(3	)		(6	)		(10	)		(13	)
Income available to the holders of Ordinary Shares, excluding net realized gains (losses)		279			223			551			432
Net realized gains (losses), net of income tax		85			(125	)		53			(143	)
Net income available to the holders of Ordinary Shares	$	364		$	98		$	604		$	289
Rollforward of Ordinary Shares:
Ordinary Shares—beginning of period		264,491,819			261,897,433			262,679,356			259,861,205
Mezzanine equity conversion		11,814,274			—			11,814,274			—
Issued under ESSP		346			421			136,149			113,785
Stock cancelled/granted		(438,707	)		(10,388	)		1,054,140			482,859
Issued for option exercises		1,887,558			360,292			2,071,371			1,789,909
Ordinary Shares—end of period		277,755,290			262,247,758			277,755,290			262,247,758
Denominator:
Weighted average shares outstanding		268,260,244			259,863,879			264,957,203			259,460,287
Dilutive effect of mezzanine equity		—			3,416,695			—			3,758,796
Effect of other dilutive securities		6,972,095			7,900,655			5,761,774			8,030,284
Adjusted weighted average shares outstanding and assumed conversions		275,232,339			271,181,229			270,718,977			271,249,367
Basic earnings (loss) per share:
Income excluding net realized gains (losses)	$	1.04		$	0.85		$	2.08		$	1.66
Net realized gains (losses)		0.31			(0.48	)		0.20			(0.55	)
Net income	$	1.35		$	0.37		$	2.28		$	1.11
Diluted earnings (loss) per share:
Income excluding net realized gains (losses)	$	1.01		$	0.82		$	2.04		$	1.59
Net realized gains (losses)		0.31			(0.46	)		0.19			(0.53	)
Net income	$	1.32		$	0.36		$	2.23		$	1.06

Page 3

ACE Limited

Summary Consolidated Balance Sheets

(in millions of U.S. dollars)

	June 30		March 31		December 31		December 31
	2003		2003		2002		2001
Assets		(Unaudited)		(Unaudited)		(Audited)		(Audited)
Fixed maturities available for sale, at fair value	$	16,884	$	15,044	$	14,420	$	13,000
Equity securities, at fair value		471		410		411		468
Securities on loan, at fair value		546		521		293		—
Short-term investments		2,048		2,081		1,885		1,206
Other investments, at fair value		661		685		652		591
Cash		576		477		663		671
Total investments and cash		21,186		19,218		18,324		15,936
Insurance and reinsurance balances receivable		3,186		3,228		2,654		2,522
Reinsurance recoverable		13,891		14,132		13,991		11,398
Deferred policy acquisition costs		984		915		832		679
Prepaid reinsurance premiums		1,452		1,790		1,721		1,223
Goodwill		2,711		2,711		2,717		2,772
Deferred tax assets		1,075		1,227		1,288		1,251
Other assets		2,141		2,235		1,924		1,406
Total assets	$	46,626	$	45,456	$	43,451	$	37,187
Liabilities
Unpaid losses and loss expenses	$	24,940	$	24,636	$	24,315	$	20,728
Future policy benefits for life and annuity contracts		470		459		442		3,853
Unearned premiums		6,394		6,573		5,586		383
Insurance and reinsurance balances payable		1,989		1,963		1,870		1,418
Contract holder deposit funds		74		89		90		101
Securities lending collateral		561		533		301		—
Accounts payable, accrued expenses and other liabilities		1,650		1,820		1,777		1,567
Short-term debt		146		146		146		495
Long-term debt		1,749		1,749		1,749		1,349
Trust preferred securities		475		475		475		875
Total liabilities	$	38,448	$	38,443	$	36,751	$	30,769
Mezzanine equity	$	—	$	311	$	311	$	311
Shareholders’ equity
Total shareholders’ equity, excl. AOCI	$	7,365	$	6,164	$	5,949	$	6,005
Accumulated other comprehensive income (AOCI)		813		538		440		102
Total shareholders’ equity	$	8,178	$	6,702	$	6,389	$	6,107
Total liabilities, mezzanine equity and shareholders’ equity	$	46,626	$	45,456	$	43,451	$	37,187
Diluted book value per Ordinary Share	$	27.24	$	25.14	$	24.16	$	23.59
Diluted tangible book value per Ordinary Share	$	17.91	$	15.72	$	14.56	$	13.99

Page 4

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Consolidated Property and Casualty

Excluding Financial Services

	2Q-03			1Q-03			4Q-02			3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02		Full Year 2002			Full Year 2001
Gross premiums written	$	3,241		$	3,532		$	2,956		$	2,977		$	2,583		25	%	$	11,117		$	8,270
Net premiums written		2,230			2,357			1,709			1,690			1,531		46	%		6,412			4,494
Net premiums earned		2,049			1,815			1,631			1,495			1,322		55	%		5,545			4,081
Losses and loss expenses		1,298			1,122			1,507			1,000			794		63	%		3,959			3,155
Policy acquisition costs		315			281			260			232			207		52	%		872			719
Administrative expenses		266			241			250			233			212		25	%		881			771
Underwriting income (loss)		170			171			(386	)		30			109		56	%		(167	)		(564	)
Life underwriting income (loss)		3			2			—			(1	)		2					5			4
Net investment income—property and casualty		154			148			143			146			149		3	%		583			603
Other income (expense)		—			(6	)		—			(15	)		(12	)				(22	)		—
Interest expense		42			43			45			45			49					181			182
Income tax expense (benefit)		57			52			(139	)		15			27					(74	)		(91	)
Amortization of goodwill		—			—			—			—			—					—			75
Income (loss) excluding net realized gains (losses)		228			220			(149	)		100			172		33	%		292			(123	)
Net realized gains (losses)		35			(37	)		(88	)		(158	)		(95	)				(362	)		(54	)
Tax effect of net realized gains (losses)		(2	)		8			19			11			6					45			10
Cumulative effect of adopting a new acct’ standard		—			—			—			—			—					—			—
Net income (loss)	$	261		$	191		$	(218	)	$	(47	)	$	83		214	%	$	(25	)	$	(167	)
Net premiums written/gross premiums written		68.8%			66.7%			57.8%			56.8%			59.3%					57.7%			54.3%
Effective tax rate		20.0%			19.1%			48.3%			13.0%			13.6%					-33.9%			42.5%
Loss and loss expense ratio		63.4%			61.8%			92.4%			66.8%			60.1%					71.4%			77.3%
Policy acquisition cost ratio		15.3%			15.5%			15.9%			15.6%			15.7%					15.7%			17.6%
Administrative expense ratio		13.0%			13.3%			15.4%			15.6%			16.0%					15.9%			18.9%
Combined ratio		91.7%			90.6%			123.7%			98.0%			91.8%					103.0%			113.8%

Consolidated property and casualty excluding financial services is presented to allow for comparison and analysis with earnings guidance.

Page 5

ACE Limited

Consolidated Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

ACE Limited Consolidated

	2Q-03			1Q-03			4Q-02			3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02	Full Year 2002			Full Year 2001
Gross premiums written	$	3,359		$	4,064		$	3,194		$	3,470		$	2,901		16%	$	12,654		$	9,751
Net premiums written		2,362			2,883			1,937			2,166			1,848		28%		7,909			5,955
Net premiums earned		2,264			2,024			1,923			1,868			1,550		46%		6,672			5,510
Losses and loss expenses		1,459			1,283			1,764			1,328			961		52%		4,906			4,552
Policy acquisition costs		332			292			274			250			229		45%		944			777
Administrative expenses (1)		286			259			265			248			229		25%		938			827
Underwriting income (loss)		187			190			(380	)		42			131		43%		(116	)		(646	)
Life underwriting income (loss)		3			2			—			(1	)		2				5			4
Net investment income—property and casualty		203			199			194			192			195		4%		775			776
Other income (expense) (2)		1			(6	)		1			(15	)		(12	)			(21	)		1
Interest expense		43			45			47			48			52		-17%		193			199
Income tax expense (benefit) (1) (2)		65			61			(133	)		22			35				(44	)		(70	)
Amortization of goodwill		—			—			—			—			—				—			79
Income (loss) excluding net realized gains (losses)		286			279			(99	)		148			229		25%		494			(73	)
Net realized gains (losses)		107			(40	)		(88	)		(235	)		(140	)			(489	)		(58	)
Tax effect of net realized gains (losses)		(22	)		8			19			30			15				72			8
Cumulative effect of adopting a new acct’ standard		—			—			—			—			—				—			(23	)
Net income (loss)	$	371		$	247		$	(168	)	$	(57	)	$	104		257%	$	77		$	(146	)
Net premiums written/gross premiums written		70.3%			70.9%			60.6%			62.4%			63.7%				62.5%			61.1%
Effective tax rate		18.5%			17.9%			57.3%			12.9%			13.3%				-9.8%			49.0%
Loss and loss expense ratio		64.5%			63.4%			91.8%			71.0%			62.0%				73.5%			82.6%
Policy acquisition cost ratio		14.6%			14.4%			14.3%			13.4%			14.8%				14.2%			14.1%
Administrative expense ratio (1)		12.6%			12.8%			13.7%			13.3%			14.7%				14.0%			15.0%
Combined ratio		91.7%			90.6%			119.8%			97.7%			91.5%				101.7%			111.7%
Large losses and other items:								(3	)		(4	)						(3	)(4)		(5	)
Large losses (before tax)	$	—		$	—		$	516		$	100		$	—			$	616		$	862
Large losses (after tax)	$	—		$	—		$	354		$	90		$	—			$	444		$	744
Operating cash flow	$	978		$	600		$	833		$	1,020		$	427			$	2,424		$	1,353

(1) Restated to include expenses reported as non-recurring in 2001.

(2) Other income (expense) in Q2 and Q3 of 2002 includes debt prepayment expense. The tax effect in 2Q-02 was $4M and 3Q-02 was $5M.

(3) Reported in press release on January 27, 2003.

(4) Reported in press release on September 18, 2002. Total after tax of $90M includes Overseas General and Global Reinsurance.

(5) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount includes losses reported in the press release on July 18, 2001 and January 8, 2002.

Page 6

ACE Limited

Premiums By Line of Business

(in millions of U.S. dollars)

(Unaudited)

ACE Limited Consolidated

	2Q-03			1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	2,947		$	3,212	$	2,732	$	2,774	$	2,388	23.4%	$	10,298	$	7,661
Life, accident & health		340			369		274		261		223	52.5%		984		1,023
Financial guaranty		119			121		97		147		82	45.1%		391		292
Financial solutions		(1	)		411		141		346		236	-100.4%		1,146		1,189
	$	3,405		$	4,113	$	3,244	$	3,528	$	2,929	16.3%	$	12,819	$	10,165
Net Premiums Written:
Property & casualty	$	1,993		$	2,113	$	1,534	$	1,528	$	1,360	46.5%	$	5,744	$	3,973
Life, accident & health		281			291		222		219		198	41.9%		827		929
Financial guaranty		119			120		96		146		82	45.1%		387		284
Financial solutions		13			406		132		330		235	-94.5%		1,110		1,177
	$	2,406		$	2,930	$	1,984	$	2,223	$	1,875	28.3%	$	8,068	$	6,363
Net Premiums Earned:
Property & casualty	$	1,835		$	1,604	$	1,449	$	1,320	$	1,169	57.0%	$	4,888	$	3,563
Life, accident & health		256			259		228		232		179	43.0%		815		921
Financial guaranty		82			78		81		46		81	1.2%		282		352
Financial solutions		133			131		211		327		147	-9.5%		845		1,080
	$	2,306		$	2,072	$	1,969	$	1,925	$	1,576	46.3%	$	6,830	$	5,916

Page 7

ACE Limited

Consolidating Statement of Operations

Three months ended June 30, 2003

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General		Global Reinsurance		Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	1,648		$	1,244	$	349	$	—		$	3,241		$	118		$	3,359
Net premiums written		969			916		345		—			2,230			132			2,362
Net premiums earned		920			860		269		—			2,049			215			2,264
Losses and loss expenses		637			518		143		—			1,298			161			1,459
Policy acquisition costs		101			163		51		—			315			17			332
Administrative expenses		102			121		14		29			266			20			286
Underwriting income (loss)		80			58		61		(29	)		170			17			187
Life underwriting income		—			—		3		—			3			—			3
Net investment income—property and casualty		103			38		21		(8	)		154			49			203
Other income (expense)		—			—		—		—			—			1			1
Interest expense		7			1		—		34			42			1			43
Income tax expense (benefit)		42			25		3		(13	)		57			8			65
Income (loss) excluding net realized gains (losses)		134			70		82		(58	)		228			58			286
Net realized gains (losses)		25			2		13		(5	)		35			72			107
Tax effect of net realized gains (losses)		(3	)		—		1		—			(2	)		(20	)		(22	)
Net income (loss)	$	156		$	72	$	96	$	(63	)	$	261		$	110		$	371
Net premiums written/gross premiums written		58.8%			73.6%		98.9%		—			68.8%			111.9%			70.3%
Effective tax rate		23.9%			26.3%		3.5%		18.3%			20.0%			12.1%			18.5%
Loss and loss expense ratio		69.2%			60.3%		53.1%					63.4%			74.9%			64.5%
Policy acquisition cost ratio		10.9%			18.9%		18.8%					15.3%			7.8%			14.6%
Administrative expense ratio		11.1%			14.0%		5.3%					13.0%			9.5%			12.6%
Combined ratio		91.2%			93.2%		77.2%					91.7%			92.2%			91.7%

Page 8

ACE Limited

Consolidating Statement of Operations

Three months ended June 30, 2002

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General			Global Reinsurance			Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	1,428		$	941		$	214		$	—		$	2,583		$	318		$	2,901
Net premiums written		718			616			197			—			1,531			317			1,848
Net premiums earned		606			566			150			—			1,322			228			1,550
Losses and loss expenses		396			345			53			—			794			167			961
Policy acquisition costs		50			128			29			—			207			22			229
Administrative expenses		87			89			9			27			212			17			229
Underwriting income		73			4			59			(27	)		109			22			131
Life underwriting income		—			—			2			—			2			—			2
Net investment income—property and casualty		103			28			19			(1	)		149			46			195
Other income (expense)		(1	)		—			—			(11	)		(12	)		—			(12	)
Interest expense		8			1			—			40			49			3			52
Income tax expense		41			5			2			(21	)		27			8			35
Income (loss) excluding net realized gains (losses)		126			26			78			(58	)		172			57			229
Net realized gains (losses)		(32	)		(6	)		(27	)		(30	)		(95	)		(45	)		(140	)
Tax effect of net realized gains (losses)		4			2			—			—			6			9			15
Net income (loss)	$	98		$	22		$	51		$	(88	)	$	83		$	21		$	104
Net premiums written/gross premiums written		50.3%			65.5%			92.1%			—			59.3%			99.7%			63.7%
Effective tax rate		24.6%			16.1%			2.5%			26.6%			13.6%			12.3%			13.3%
Loss and loss expense ratio		65.4%			61.1%			35.0%						60.1%			73.2%			62.0%
Policy acquisition cost ratio		8.3%			22.6%			19.5%						15.7%			9.6%			14.8%
Administrative expense ratio		14.3%			15.5%			6.3%						16.0%			7.4%			14.7%
Combined ratio		88.0%			99.2%			60.8%						91.8%			90.2%			91.5%

Page 9

ACE Limited

Consolidating Statement of Operations

Six months ended June 30, 2003

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General			Global Reinsurance		Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	3,312		$	2,650		$	811	$	—		$	6,773		$	650		$	7,423
Net premiums written		1,902			1,897			788		—			4,587			658			5,245
Net premiums earned		1,673			1,674			517		—			3,864			424			4,288
Losses and loss expenses		1,149			1,012			259		—			2,420			322			2,742
Policy acquisition costs		184			315			97		—			596			28			624
Administrative expenses		190			235			29		53			507			38			545
Underwriting income (loss)		150			112			132		(53	)		341			36			377
Life underwriting income		—			—			5		—			5			—			5
Net investment income—property and casualty		206			73			40		(17	)		302			100			402
Other income (expense)		(6	)		(1	)		1		—			(6	)		1			(5	)
Interest expense		15			1			—		69			85			3			88
Income tax expense (benefit)		81			48			7		(27	)		109			17			126
Income (loss) excluding net realized gains (losses)		254			135			171		(112	)		448			117			565
Net realized gains (losses)		7			(11	)		16		(14	)		(2	)		69			67
Tax effect of net realized gains (losses)		—			5			1		—			6			(20	)		(14	)
Net income (loss)	$	261		$	129		$	188	$	(126	)	$	452		$	166		$	618
Net premiums written/gross premiums written		57.4%			71.6%			97.2%		—			67.7%			101.2%			70.7%
Effective tax rate		24.2%			26.2%			3.9%		19.4%			19.6%			12.7%			18.2%
Loss and loss expense ratio		68.7%			60.5%			50.0%					62.6%			75.9%			63.9%
Policy acquisition cost ratio		11.0%			18.8%			18.7%					15.4%			6.5%			14.5%
Administrative expense ratio		11.3%			14.0%			5.7%					13.1%			9.1%			12.7%
Combined ratio		91.0%			93.3%			74.4%					91.1%			91.5%			91.1%

Page 10

ACE Limited

Consolidating Statement of Operations

Six months ended June 30, 2002

(in millions of U.S. dollars)

(Unaudited)

	Insurance— North American			Insurance— Overseas General			Global Reinsurance			Corporate & Other			Consolidated P&C			Financial Services			ACE Consolidated
Gross premiums written	$	2,693		$	1,903		$	588		$	—		$	5,184		$	806		$	5,990
Net premiums written		1,231			1,230			552			—			3,013			793			3,806
Net premiums earned		1,079			1,075			265			—			2,419			462			2,881
Losses and loss expenses		723			637			92			—			1,452			362			1,814
Policy acquisition costs		92			242			46			—			380			40			420
Administrative expenses		158			175			15			50			398			27			425
Underwriting income (loss)		106			21			112			(50	)		189			33			222
Life underwriting income		—			—			6			—			6			—			6
Net investment income—property and casualty		205			49			43			(3	)		294			95			389
Other income (expense)		—			4			—			(11	)		(7	)		—			(7	)
Interest expense		17			1			1			72			91			7			98
Income tax expense (benefit)		74			13			2			(39	)		50			17			67
Income (loss) excluding net realized gains (losses)		220			60			158			(97	)		341			104			445
Net realized gains (losses)		(52	)		(11	)		(30	)		(23	)		(116	)		(50	)		(166	)
Tax effect of net realized gains (losses)		12			3			—			—			15			8			23
Net income (loss)	$	180		$	52		$	128		$	(120	)	$	240		$	62		$	302
Net premiums written/gross premiums written		45.7%			64.6%			93.9%			—			58.1%			98.4%			63.5%
Effective tax rate		25.2%			17.8%			1.3%			28.7%			12.8%			14.0%			13.1%
Loss and loss expense ratio		67.1%			59.3%			34.6%						60.1%			78.2%			63.0%
Policy acquisition cost ratio		8.5%			22.5%			17.2%						15.7%			8.7%			14.5%
Administrative expense ratio		14.6%			16.2%			6.0%						16.4%			5.9%			14.7%
Combined ratio		90.2%			98.0%			57.8%						92.2%			92.8%			92.2%

Page 11

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Insurance-North American

	2Q-03			1Q-03			4Q-02			3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02	Full Year 2002			Full Year 2001
Gross premiums written	$	1,648		$	1,664		$	1,640		$	1,783		$	1,428		15%	$	6,116		$	4,521
Net premiums written		969			933			819			869			718		35%		2,919			1,986
Net premiums earned		920			753			742			654			606		52%		2,475			1,816
Losses and loss expenses		637			512			1,024			453			396		61%		2,200			1,373
Policy acquisition costs		101			83			69			55			50		102%		216			206
Administrative expenses		102			88			97			86			87		17%		341			315
Underwriting income (loss)		80			70			(448	)		60			73		10%		(282	)		(78	)
Net investment income—property and casualty		103			103			100			101			103		0%		406			426
Other income (expense)		—			(6	)		1			—			(1	)			1			1
Interest expense		7			8			8			7			8				32			37
Income tax expense (benefit)		42			39			(119	)		41			41				(4	)		94
Amortization of goodwill		—			—			—			—			—				—			—
Income (loss) excluding net realized gains (losses)		134			120			(236	)		113			126		6%		97			218
Net realized gains (losses)		25			(18	)		(92	)		(55	)		(32	)			(199	)		(19	)
Tax effect of net realized gains (losses)		(3	)		3			27			4			4				43			8
Net income (loss)	$	156		$	105		$	(301	)	$	62		$	98		59%	$	(59	)	$	207
Net premiums written/gross premiums written		58.8%			56.1%			49.9%			48.7%			50.3%				47.7%			43.9%
Effective tax rate		23.9%			24.5%			33.5%			26.6%			24.6%				-4.3%			30.1%
Loss and loss expense ratio		69.2%			68.0%			137.9%			69.2%			65.4%				88.9%			75.6%
Policy acquisition cost ratio		10.9%			11.0%			9.4%			8.3%			8.3%				8.7%			11.3%
Administrative expense ratio		11.1%			11.6%			13.0%			13.2%			14.3%				13.8%			17.4%
Combined ratio		91.2%			90.6%			160.3%			90.7%			88.0%				111.4%			104.3%
Large losses and other items:								(1	)									(1	)		(2	)
Large losses (before tax)	$	—		$	—		$	516		$	—		$	—			$	516		$	159
Large losses (after tax)	$	—		$	—		$	354		$	—		$	—			$	354		$	143
Excluding A&E charge:								(1	)									(1	)
Underwriting income							$	68									$	234
Income (loss) excluding net realized gains (losses)							$	118									$	451
Net income							$	53									$	295
Loss and loss expense ratio								68.4%										68.0%
Combined ratio								90.8%										90.5%

(1) Reported in press release on January 27, 2003.

(2) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes $18M of losses reported in the press release on July 18, 2001.

Page 12

ACE Limited

Premiums By Line of Business; Insurance—North American

(in millions of U.S. dollars)

(Unaudited)

	2Q-03		1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	1,594	$	1,594	$	1,593	$	1,752	$	1,398	14%	$	5,984	$	4,521
Life, accident & health		54		70		47		31		30	80%		132		—
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	1,648	$	1,664	$	1,640	$	1,783	$	1,428	15.4%	$	6,116	$	4,521
Net Premiums Written:
Property & casualty	$	943	$	900	$	797	$	854	$	700	35%	$	2,846	$	1,986
Life, accident & health		26		33		22		15		18	44%		73		—
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	969	$	933	$	819	$	869	$	718	35.0%	$	2,919	$	1,986
Net Premiums Earned:
Property & casualty	$	893	$	723	$	721	$	637	$	586	52%	$	2,394	$	1,812
Life, accident & health		27		30		21		17		20	35%		81		4
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	920	$	753	$	742	$	654	$	606	51.8%	$	2,475	$	1,816

Page 13

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Insurance-Overseas General

	2Q-03		1Q-03			4Q-02			3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02	Full Year 2002			Full Year 2001
Gross premiums written	$	1,244	$	1,406		$	1,203		$	1,008		$	941		32%	$	4,114		$	3,289
Net premiums written		916		981			796			690			616		49%		2,716			2,154
Net premiums earned		860		814			671			647			566		52%		2,393			1,941
Losses and loss expenses		518		494			372			446			345		50%		1,455			1,465
Policy acquisition costs		163		152			151			140			128		27%		533			445
Administrative expenses		121		114			108			107			89		36%		390			333
Underwriting income (loss) (1)		58		54			40			(46	)		4		1350%		15			(302	)
Net investment income—property and casualty		38		35			31			28			28		36%		108			102
Other income (expense)		—		(1	)		(1	)		(1	)		—		—		2			(1	)
Interest expense		1		—			1			1			1		0%		3			2
Income tax expense (benefit) (1)		25		23			(3	)		(4	)		5		400%		6			(87	)
Amortization of goodwill		—		—			—			—			—		—		—			3
Income (loss) excluding net realized gains (losses)		70		65			72			(16	)		26		169%		116			(119	)
Net realized gains (losses)		2		(13	)		(5	)		(21	)		(6	)			(37	)		(5	)
Tax effect of net realized gains (losses)		—		5			2			7			2				12			2
Net income (loss)	$	72	$	57		$	69		$	(30	)	$	22		227%	$	91		$	(122	)
Net premiums written/gross premiums written		73.6%		69.8%			66.2%			68.5%			65.5%				66.0%			65.5%
Effective tax rate		26.3%		26.1%			-4.3%			20.0%			16.1%				4.9%			42.2%
Loss and loss expense ratio		60.3%		60.7%			55.5%			68.9%			61.1%				60.8%			75.5%
Policy acquisition cost ratio		18.9%		18.7%			22.4%			21.8%			22.6%				22.3%			22.9%
Administrative expense ratio (1)		14.0%		14.0%			16.2%			16.5%			15.5%				16.3%			17.2%
Combined ratio		93.2%		93.4%			94.1%			107.2%			99.2%				99.4%			115.6%
Large losses and other items:										(2	)						(2	)		(3	)
Large losses (before tax)	$	—	$	—		$	—		$	68		$	—			$	68		$	290
Large losses (after tax)	$	—	$	—		$	—		$	61		$	—			$	61		$	216

(1) Restated to include expenses reported as non-recurring in 2001.

(2) Reported in press release on September 18, 2002. Total after tax of $90M includes $61M in Overseas General and $29M in Global Reinsurance.

(3) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes losses reported in the press release of January 8, 2002.

Page 14

ACE Limited

Premiums By Line of Business; Insurance—Overseas General

(in millions of U.S. dollars)

(Unaudited)

	2Q-03		1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	1,004	$	1,156	$	1,026	$	837	$	776	29.4%	$	3,427	$	2,680
Life, accident & health		240		250		177		171		165	45.5%		687		609
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	1,244	$	1,406	$	1,203	$	1,008	$	941	32.2%	$	4,114	$	3,289
Net Premiums Written:
Property & casualty	$	705	$	770	$	643	$	543	$	463	52.3%	$	2,121	$	1,633
Life, accident & health		211		211		153		147		153	37.9%		595		521
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	916	$	981	$	796	$	690	$	616	48.7%	$	2,716	$	2,154
Net Premiums Earned:
Property & casualty	$	673	$	633	$	510	$	489	$	433	55.4%	$	1,817	$	1,427
Life, accident & health		187		181		161		158		133	40.6%		576		511
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		3
	$	860	$	814	$	671	$	647	$	566	51.9%	$	2,393	$	1,941

Page 15

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

Insurance-Overseas General

	2Q-03		1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
ACE Global Markets	$	422	$	346	$	511	$	325	$	314	34.4%	$	1,451	$	1,179
ACE International		822		1,060		692		683		627	31.1%		2,663		2,110
Total	$	1,244	$	1,406	$	1,203	$	1,008	$	941	32.2%	$	4,114	$	3,289
Net Premiums Written:
ACE Global Markets	$	295	$	256	$	282	$	196	$	160	84.4%	$	787	$	712
ACE International		621		725		514		494		456	36.2%		1,929		1,442
Total	$	916	$	981	$	796	$	690	$	616	48.7%	$	2,716	$	2,154
Net Premiums Earned:
ACE Global Markets	$	256	$	248	$	177	$	181	$	159	61.0%	$	662	$	563
ACE International		604		566		494		466		407	48.4%		1,731		1,378
Total	$	860	$	814	$	671	$	647	$	566	51.9%	$	2,393	$	1,941
Net Premiums Written/Gross Premiums Written:
ACE Global Markets		69.9%		74.0%		55.2%		60.3%		51.0%			54.2%		60.4%
ACE International		75.5%		68.4%		74.3%		72.3%		72.7%			72.4%		68.3%
Total		73.6%		69.8%		66.2%		68.5%		65.5%			66.0%		65.5%
Loss Ratio:
ACE Global Markets		61.4%		61.2%		51.3%		69.7%		65.2%			59.7%		77.9%
ACE International		59.8%		60.4%		56.9%		68.6%		59.5%			61.2%		74.5%
Total		60.3%		60.7%		55.5%		68.9%		61.1%			60.8%		75.5%
Expense Ratio:
ACE Global Markets		35.7%		36.7%		52.1%		46.8%		45.2%			49.6%		47.4%
ACE International		31.7%		30.9%		33.9%		35.0%		35.4%			34.4%		37.1%
Total		32.9%		32.7%		38.6%		38.3%		38.1%			38.6%		40.1%
Combined Ratio:
ACE Global Markets		97.1%		97.9%		103.4%		116.5%		110.4%			109.3%		124.3%
ACE International		91.5%		91.3%		90.8%		103.6%		94.9%			95.6%		111.6%
Total		93.2%		93.4%		94.1%		107.2%		99.2%			99.4%		115.6%

Page 16

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Global Reinsurance

	2Q-03		1Q-03		4Q-02		3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02	Full Year 2002			Full Year 2001
Property and casualty
Gross premiums written	$	349	$	462	$	113	$	186		$	214		63%	$	887		$	460
Net premiums written		345		443		94		131			197		75%		777			354
Net premiums earned		269		248		218		194			150		79%		677			324
Losses and loss expenses		143		116		111		101			53		170%		304			317
Policy acquisition costs		51		46		40		37			29		76%		123			68
Administrative expenses		14		15		14		11			9		56%		40			29
Underwriting income (loss)		61		71		53		45			59		3%		210			(90	)
Life
Gross premiums written		46		49		50		58			28		64%		165			414
Net premiums written		44		47		47		57			27		63%		159			408
Net premiums earned		42		48		46		57			26		62%		158			406
Losses and loss expenses		44		48		52		60			23		91%		158			401
Policy acquisition costs		2		4		1		3			5		-60%		16			8
Administrative expenses		1		1		1		2			2		-50%		6			2
Net investment income		8		7		8		7			6		33%		27			9
Underwriting income (loss)		3		2		—		(1	)		2		50%		5			4
Net investment income—property and casualty		21		19		19		20			19		11%		82			70
Other income (expense)		—		1		—		1			—				1			—
Interest expense		—		—		—		—			—				1			1
Income tax expense (benefit)		3		4		—		(1	)		2				1			(22	)
Amortization of goodwill		—		—		—		—			—				—			14
Income (loss) excluding net realized gains (losses)		82		89		72		66			78		5%		296			(9	)
Net realized gains (losses)		13		3		—		(27	)		(27	)			(57	)		(16	)
Tax effect of net realized gains (losses)		1		—		—		—			—				—			—
Net income (loss)	$	96	$	92	$	72	$	39		$	51		88%	$	239		$	(25	)
Net premiums written/gross premiums written		98.9%		95.9%		83.2%		70.4%			92.1%				87.6%			76.9%
Effective tax rate		3.5%		4.3%		0.0%		-1.5%			2.5%				0.3%			71.0%
Loss and loss expense ratio		53.1%		46.7%		51.1%		52.0%			35.0%				44.9%			97.7%
Policy acquisition cost ratio		18.8%		18.6%		18.2%		19.2%			19.5%				18.1%			21.0%
Administrative expense ratio		5.3%		6.0%		6.5%		5.2%			6.3%				5.9%			9.0%
P&C combined ratio		77.2%		71.3%		75.8%		76.4%			60.8%				68.9%			127.7%
Large losses and other items:								(1	)						(1	)		(2	)
Large losses (before tax)	$	—	$	—	$	—	$	32		$	—			$	32		$	273
Large losses (after tax)	$	—	$	—	$	—	$	29		$	—			$	29		$	238

(1) Reported in press release on September 18, 2002. Total after tax of $90M includes $61M in Overseas General and $29M in Global Reinsurance.

(2) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K). Amount also includes $37M of losses reported in the press release on July 18, 2001.

Page 17

ACE Limited

Premiums By Line of Business; Global Reinsurance

(in millions of U.S. dollars)

(Unaudited)

	2Q-03		1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Property & casualty	$	349	$	462	$	113	$	186	$	214	63.1%	$	887	$	460
Life, accident & health		46		49		50		58		28	64.3%		165		414
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	395	$	511	$	163	$	244	$	242	63.2%	$	1,052	$	874
Net Premiums Written:
Property & casualty	$	345	$	443	$	94	$	131	$	197	75.1%	$	777	$	354
Life, accident & health		44		47		47		57		27	63.0%		159		408
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	389	$	490	$	141	$	188	$	224	73.7%	$	936	$	762
Net Premiums Earned:
Property & casualty	$	269	$	248	$	218	$	194	$	150	79.3%	$	677	$	324
Life, accident & health		42		48		46		57		26	61.5%		158		406
Financial guaranty		—		—		—		—		—	—		—		—
Financial solutions		—		—		—		—		—	—		—		—
	$	311	$	296	$	264	$	251	$	176	76.7%	$	835	$	730

Page 18

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

Global Reinsurance-Property & Casualty

	2Q-03		1Q-03		4Q-02			3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Tempest Europe	$	97	$	123	$	34		$	36	$	67	44.8%	$	230	$	120
Tempest USA		133		100		86			69		47	183.0%		234		69
Tempest Bermuda		119		239		(7	)		81		100	19.0%		423		271
	$	349	$	462	$	113		$	186	$	214	63.1%	$	887	$	460
Net Premiums Written:
Tempest Europe	$	94	$	115	$	18		$	27	$	57	64.9%	$	182	$	53
Tempest USA		132		99		86			69		47	180.9%		234		69
Tempest Bermuda		119		229		(10	)		35		93	28.0%		361		232
	$	345	$	443	$	94		$	131	$	197	75.1%	$	777	$	354
Net Premiums Earned:
Tempest Europe	$	63	$	69	$	45		$	38	$	37	70.3%	$	142	$	60
Tempest USA		112		86		69			53		36	211.1%		182		42
Tempest Bermuda		94		93		104			103		77	22.1%		353		222
	$	269	$	248	$	218		$	194	$	150	79.3%	$	677	$	324
Net Premiums Written/Gross Premiums Written:
Tempest Europe		96.9%		93.5%		52.9%			75.0%		85.1%			79.1%		44.2%
Tempest USA		99.2%		99.0%		100.0%			100.0%		100.0%			100.0%		100.0%
Tempest Bermuda		100.0%		95.8%		142.9%			43.2%		93.0%			85.3%		85.6%
		98.9%		95.9%		83.2%			70.4%		92.1%			87.6%		77.0%

Page 19

ACE Limited

Segment Results—Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Financial Services

	2Q-03			1Q-03			4Q-02		3Q-02			2Q-02			% Change 2Q-03 vs. 2Q-02	Full Year 2002			Full Year 2001
Gross premiums written	$	118		$	532		$	238	$	493		$	318		-63%	$	1,537		$	1,481
Net premiums written		132			526			228		476			317		-58%		1,497			1,461
Net premiums earned		215			209			292		373			228		-6%		1,127			1,429
Losses and loss expenses		161			161			257		328			167		-4%		947			1,397
Policy acquisition costs		17			11			14		18			22		-23%		72			58
Administrative expenses		20			18			15		15			17		18%		57			56
Underwriting income (loss)		17			19			6		12			22		-23%		51			(82	)
Net investment income		49			51			51		46			46		7%		192			173
Other income		1			—			1		—			—				1			1
Interest expense		1			2			2		3			3				12			17
Income tax expense		8			9			6		7			8				30			21
Amortization of goodwill		—			—			—		—			—				—			4
Income excluding net realized gains (losses)		58			59			50		48			57		2%		202			50
Net realized gains (losses)		72			(3	)		—		(77	)		(45	)			(126	)		(4	)
Tax effect of net realized gains (losses)		(20	)		—			—		19			9				26			(2	)
Cumulative effect of adopting a new acct’ standard		—			—			—		—			—				—			(23	)
Net income (loss)	$	110		$	56		$	50	$	(10	)	$	21		424%	$	102		$	21
Net premiums written/gross premiums written		111.9%			98.9%			95.8%		96.6%			99.7%				97.4%			98.6%
Effective tax rate		12.1%			13.2%			10.7%		12.7%			12.3%				12.9%			29.6%
Loss and loss expense ratio		74.9%			77.0%			88.2%		88.0%			73.2%				84.0%			97.8%
Policy acquisition cost ratio		7.8%			5.2%			5.0%		4.6%			9.6%				6.4%			4.0%
Administrative expense ratio		9.5%			8.6%			4.6%		4.2%			7.4%				5.0%			3.9%
Combined ratio		92.2%			90.8%			97.8%		96.8%			90.2%				95.4%			105.7%
Large losses and other items:
Loss portfolio transfers**	$	—		$	—		$	99	$	187		$	25			$	311		$	642
September 11, 2001 tragedy (before and after tax)																			$	147	(1)

** Total premiums typically included in gross premiums written, net premiums written, and net premiums earned in the quarter it is written; usually accrued at 100% loss ratio.

(1) September 11, 2001 tragedy (See Note 5 to the Consolidated Financial Statements included in the 2002 Annual Report on Form 10-K).

Page 20

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

Financial Services

	2Q-03			1Q-03		4Q-02		3Q-02		2Q-02		% Change 2Q-03 vs. 2Q-02	Full Year 2002		Full Year 2001
Gross Premiums Written:
Financial Guaranty	$	119		$	121	$	97	$	147	$	82	45.1%	$	391	$	292
Financial Solutions		(1	)		411		141		346		236	-100.4%		1,146		1,189
Total	$	118		$	532	$	238	$	493	$	318	-62.9%	$	1,537	$	1,481
Net Premiums Written:
Financial Guaranty	$	119		$	120	$	96	$	146	$	82	45.1%	$	387	$	284
Financial Solutions		13			406		132		330		235	-94.5%		1,110		1,177
Total	$	132		$	526	$	228	$	476	$	317	-58.4%	$	1,497	$	1,461
Net Premiums Earned:
Financial Guaranty	$	82		$	78	$	81	$	46	$	81	1.2%	$	282	$	352
Financial Solutions		133			131		211		327		147	-9.5%		845		1,077
Total	$	215		$	209	$	292	$	373	$	228	-5.7%	$	1,127	$	1,429
Net Premiums Written/Gross Premiums Written:
Financial Guaranty		100.0%			99.2%		99.0%		99.3%		100.0%			99.0%		97.3%
Financial Solutions		-1300.0%			98.8%		93.6%		95.4%		99.6%			96.9%		99.0%
		111.9%			98.9%		95.8%		96.6%		99.7%			97.4%		98.6%
Loss Ratio:
Financial Guaranty		49.7%			71.2%		73.0%		31.2%		55.0%			58.4%		68.3%
Financial Solutions		90.5%			80.4%		94.1%		96.0%		83.2%			92.6%		107.4%
Total		74.9%			77.0%		88.2%		88.0%		73.2%			84.0%		97.8%
Expense Ratio:
Financial Guaranty		35.3%			27.6%		17.8%		38.1%		26.9%			24.6%		23.9%
Financial Solutions		6.1%			5.7%		6.4%		4.7%		11.7%			7.0%		2.6%
Total		17.3%			13.8%		9.6%		8.8%		17.0%			11.4%		7.9%
Combined Ratio:
Financial Guaranty		85.0%			98.8%		90.8%		69.3%		81.9%			83.0%		92.2%
Financial Solutions		96.6%			86.1%		100.5%		100.7%		94.9%			99.6%		110.0%
Total		92.2%			90.8%		97.8%		96.8%		90.2%			95.4%		105.7%

Page 21

ACE Limited

Segment—Key Components

Financial Guaranty Profile

(in millions of U.S. dollars)

(Unaudited)

	Gross Par Written(7)				Net Par Outstanding/Average Ratings
	Three months ended		Six months ended		June 30, 2003				December 31, 2002
Sector	June 30, 2003				Par Outstanding		%	Average Rating	Par Outstanding		%	Average Rating
Municipal Exposure:
Tax Backed	$	1,303	$	1,772	$	20,017	24.2%	A+	$	19,637	24.0%	A+
Municipal Utilities		519		839		9,988	12.1%	A+		10,390	12.7%	A+
Special Revenue		332		560		8,511	10.3%	A		8,596	10.5%	A
Healthcare		132		269		5,551	6.7%	A		5,798	7.1%	A
Structured Municipal(1)		—		—		3,378	4.1%	AAA		3,523	4.3%	AAA
Other Municipal(2)		68		203		2,380	2.9%	A-		2,151	2.7%	A-
Total Municipal	$	2,354	$	3,643	$	49,825	60.3%	A+	$	50,095	61.3%	A
Non-Municipal Exposure:
Senior Layer CDO’s(3)	$	647	$	1,504	$	14,659	17.7%	AA+	$	12,727	15.6%	AA+
Consumer Receivables(4)		560		1,636		7,815	9.5%	A+		8,388	10.3%	A
Single Name Corporate CDS		40		130		3,689	4.5%	A+		4,454	5.4%	A+
Commercial Receivables(5)		426		769		4,571	5.5%	A+		3,464	4.2%	A+
Other Structured Finance(6)		233		361		1,460	1.8%	A+		2,051	2.5%	A
Funded Equity CDO’s(3)		—		8		578	0.7%	NM		586	0.7%	NM
Total Non-Municipal	$	1,906	$	4,408	$	32,772	39.7%	AA	$	31,670	38.7%	AA-
Total Exposure	$	4,260	$	8,051	$	82,597	100.0%		$	81,765	100.0%

(1) Structured Municipal: includes excess of loss reinsurance on portfolios of municipal credits where the company attached in excess of the AAA rating level.

(2) Other Municipal: primarily includes first mortgage bonds on investor-owned utilities and government-sponsored project finance.

(3) For ACE, collateralized debt obligations (CDO’s) are structured financings backed by a pool of investment grade assets. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches. Market supply and demand factors influence pricing and the amount and position in the structure where ACE chooses to participate.

(4) Consumer Receivables: principally includes auto loan receivables, residential mortgage-backed securities and credit card receivables.

(5) Commercial Receivables: principally includes equipment leases and commercial mortgage-backed securities.

(6) Other Structured Finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.

(7) Gross par approximates net par as the company is a net line writer.

Note—Ratings are internally determined based on rating agency guidelines

Page 22

ACE Limited

Segment—Key Components

Financial Guaranty Profile

(in millions of U.S. dollars)

(Unaudited)

Distribution by Ratings of Financial Guaranty Portfolio

Ratings	Net Par Outstanding		%
AAA	$	23,147	28.0	%
AA		16,897	20.4	%
A		29,458	35.7	%
BBB		11,451	13.9	%
Below investment grade		1,066	1.3	%
Funded equity		578	0.7	%
	$	82,597	100	%

Geographic Distribution of Financial Guaranty Portfolio

	Net Par Outstanding		%
Domestic:
California	$	6,916	8.4%
New York		5,054	6.1%
Texas		3,256	3.9%
Florida		2,827	3.4%
Illinois		2,774	3.4%
New Jersey		2,166	2.6%
Pennsylvania		2,114	2.6%
Massachusetts		1,909	2.3%
Puerto Rico		1,507	1.8%
Washington		1,341	1.6%
Ohio		1,198	1.5%
Other—municipal		16,555	20.0%
Other—non municipal		29,466	35.7%
Total Domestic	$	77,083	93.3%
International:
United Kingdom	$	1,848	2.2%
Australia		378	0.5%
France		351	0.4%
Netherlands		242	0.3%
Japan		232	0.3%
Other		2,463	3.0%
Total International	$	5,514	6.7%
Overall Net Par Outstanding	$	82,597

Page 23

ACE Limited

Segment—Key Components

25 Largest Municipal Exposures

(in millions of U.S. dollars)

(Unaudited)

Revenue Source	Net Par In Force *		Rating
California State General Obligation & Leases**	$	924	BBB
New York City General Obligation		745	A
New Jersey State General Obligation & Leases		730	AA
Denver Colorado Airport System		637	A
Chicago Illinois General Obligation		599	A+
Puerto Rico Electric Power Authority		571	A-
Massachusetts State GO & Bay Transportation & Leases		549	AA-
New York City Municipal Water Finance Authority		514	AA
San Francisco California Airport		507	A
New York State Metro Trans Auth-Trans Revenue		500	A
New York State General Obligation & Leases		492	AA
Long Island Power Authority		431	A-
Energy Northwest (FKA WPPSS)		422	AA-
Houston Texas Water & Sewer System		411	A+
Puerto Rico General Obligation & Leases		402	A-
Dade County Florida Water & Sewer System		373	A
Los Angeles County Metro Trans—Sales Tax—1st		340	AA
New Jersey State Turnpike		339	A-
Mental Health Services Facilities—New York		329	AA-
Municipal Electric Authority of Georgia—Senior		321	A+
Illinois State General Obligation & Leases		320	AA
Chicago Illinois Public Building—Board of Education		316	A+
Intermountain Power Agency		311	A+
Pennsylvania State General Obligation & Leases		287	AA
Los Angeles County California Pension Obligation		287	A

* Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company

** Rating change as of July 24, 2003.

Page 24

ACE Limited

Segment—Key Components

(in millions of U.S. dollars)

(Unaudited)

25 Largest Asset-Backed Exposures (Non—Municipal)
Revenue Source	Net Par In Force		Rating
Triplas CDO of ABS	$	621	AAA
Taurus 2001-06 Synthetic CDO		550	A+
Sears Credit Card Master Trust 2002-3 Class A—Credit Cards		550	AAA
Dresdner 2001-1—Synthetic CDO		500	AAA
Houston Synthetic CDO Portfolio 2000-1		470	AA
Bistro 2001-09 AAA Tranche—Synthetic CDO		450	AAA
Stars 2001-3—Synthetic CDO		440	AAA
Merrill Lynch Dots 4—Synthetic CDO		430	AAA
Providian Gateway Master Trust—Credit Cards		421	BB+
Merrill Lynch Synthetic CDO Taurus		417	AAA
Magrathea V—Synthetic CDO		360	AAA
Lehman Sprint 2001-1 Super Senior—Synthetic CDO		352	AAA
Taurus 2001-01 Synthetic CDO		347	AAA
Lehman Synthetic CDO Portfolio 2000-1		320	AAA
Bistro 2000-07 Class A-1—Synthetic CDO		300	AAA
Europa II Limited Class A-1—Synthetic CDO		296	AAA
Halcyon Synthetic CDO		278	AAA
ING Equity Trust (Pilgrim Principal Protection)		265	AAA
EMMOCA IV Portfolio—Synthetic CDO		250	AA+
EMMOCA V Portfolio—Synthetic CDO		250	AAA
Metris Master Trust—Credit Cards		244	BB
Lusitano Global Synthetic CDO Class A-2		237	AAA
SALS 2002-3—Synthetic CDO		200	AAA
Commerzbank 2002-1—Synthetic CDO		200	AAA
APEX (IDM) Synthetic CDO I Limited		200	AAA

Largest Single Name Corporate CDS
Revenue Source	Net Par In Force *		Rating
General Electric Capital Corporation	$	110	AAA
Munich RE		71	AA-
Merrill Lynch & Company		55	A+
American International Group, Inc. (AIG)		50	AAA
Japan Republic Sovereign Obligation		50	AA-
British Telecom Plc		45	A-
FNMA—Fannie Mae		45	AAA
Rabobank Nederland		45	AAA
General Motors Acceptance Corporation		45	BBB
JP Morgan Chase & Company—Subordinate Debt		40	A

* Excludes Net Par In Force for transactions insured by an AAA monoline financial guaranty company

Page 25

ACE Limited

Segment- Key Components

CDO’s and Single Name Corporate CDS

(in millions of U.S. dollars)

(Unaudited)

CDO’s						Single Name Corporate CDS
	Gross Par Written **						Gross Par Written **
	Three months ended		Six months ended		Net Par		Three months ended		Six months ended		Net Par
Rating	June 30, 2003				Outstanding	Rating	June 30, 2003				Outstanding
AAA	$	772	$	1,110	$10,187	AAA	$	—	$	30	$	675
AA		3		4	1,902	AA		30		40		723
A		—		11	981	A		10		40		1,806
BBB		—		5	685	BBB		—		20		432
Below investment grade		13		182	904	Below investment grade		—		—		53
Funded Equity		—		—	578
Total	$	788	$	1,312	$15,237	Total	$	40	$	130	$	3,689

	Outstanding Net Par
	2003*		2004		2005		2006		2007
Senior Layer CDO’s
Beginning Outstanding Par	$	14,659	$	14,498	$	13,898	$	11,717	$	8,679
Scheduled Runoff Amount		161		600		2,181		3,038		4,256
Ending Outstanding Par	$	14,498	$	13,898	$	11,717	$	8,679	$	4,423
Single Name Corporate CDS
Beginning Outstanding Par	$	3,689	$	2,756	$	2,101	$	1,062	$	835
Scheduled Runoff Amount		933		655		1,039		227		330
Ending Outstanding Par	$	2,756	$	2,101	$	1,062	$	835	$	505
Funded Equity CDO’s
Beginning Outstanding Par	$	578	$	578	$	578	$	578	$	408
Scheduled Runoff Amount		—		—		—		170		349
Ending Outstanding Par	$	578	$	578	$	578	$	408	$	59

* Beginning balance as of June 30, 2003

** Gross par approximates net par as the company is a net line writer

Page 26

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Net Reinsurance Recoverable by Division

	Brandywine (Runoff)									Westchester (Runoff)
	30-Jun-03			31-Mar-03			31-Dec-02			30-Jun-03			31-Mar-03			31-Dec-02
Reinsurance recoverable on paid losses & loss expenses	$	417		$	397		$	385		$	17		$	25		$	27
Reinsurance recoverable on unpaid losses & loss expenses		5,044			5,218			5,237			505			496			491
Gross reinsurance recoverable		5,461			5,615			5,622			522			521			518
Bad debt reserve		(463	)		(473	)		(478	)		(29	)		(29	)		(30	)
Net reinsurance recoverable	$	4,998		$	5,142		$	5,144		$	493		$	492		$	488
	Active Operations									Total
	30-Jun-03			31-Mar-03			31-Dec-02			30-Jun-03			31-Mar-03			31-Dec-02
Reinsurance recoverable on paid losses & loss expenses	$	869		$	950		$	951		$	1,303		$	1,372		$	1,363
Reinsurance recoverable on unpaid losses & loss expenses		7,965			7,997			7,839			13,514			13,711			13,567
Gross reinsurance recoverable		8,834			8,947			8,790			14,817			15,083			14,930
Bad debt reserve		(434	)		(449	)		(431	)		(926	)		(951	)		(939	)
Net reinsurance recoverable	$	8,400		$	8,498		$	8,359		$	13,891		$	14,132		$	13,991

As illustrated in the table above, it is important to consider the composition of the recoverable balance and the related exposures in three components: Brandywine, Westchester and Active Operations recoverable. Active operations include the run-off operations of CIS. Additional information on reinsurance recoverable on a consolidated basis and for active operations for March 31, 2003 can be found on pages 29 and 30, respectively.

The Company’s obligations with respect to further funding of the Brandywine runoff are limited pursuant to the Brandywine Restructuring Order under an $800 million aggregate excess of loss reinsurance agreement. (Refer to the “Asbestos and Environmental Claims” section of the “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” incorporated into our recently filed Form 10-K for the year ended December 31, 2002 for additional information about the order and other Company obligations.) At June 30, 2003 approximately $446 million in losses and recoverable bad debt reserves were ceded to the aggregate excess of loss reinsurance agreement leaving a remaining limit of approximately $354 million.

As part of the Westchester acquisition, National Indemnity provided reinsurance protection for all losses occurring prior to 1997. At June 30, 2003, the remaining limit in the reinsurance cover was approximately $600 million.

The remaining balance of reinsurance recoverable consists of recoverables primarily associated with active operations.

Page 27

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

	June 30, 2003						March 31, 2003						December 31, 2002
Category	Gross		Bad Debt		% of Gross		Gross		Bad Debt		% of Gross		Gross		Bad Debt		% of Gross
General Collections (1)	$	795	$	51	6.4	%	$	848	$	54	6.4	%	$	848	$	43	5.1	%
Other (2)		508		327	64.4	%		524		333	63.5	%		515		335	65.0	%
Total	$	1,303	$	378	29.0	%	$	1,372	$	387	28.2	%	$	1,363	$	378	27.7	%

(1) General collections balances represent amounts in process of collection in the normal course of business, for which we have no indication of dispute or credit issues. We provide bad debt reserves based primarily on the application of historical loss.

(2) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimation of this reserve considers the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as parental guarantees.

SAP to GAAP Reconciliation

A significant amount of detail on a large portion of our reinsurance recoverables are disclosed in our US statutory annual reports. The following is a reconciliation of the amount reported in these reports to our total recoverable as of December 31, 2002 reported for GAAP purposes:

Total amounts reported for statutory purposes	$	8,611
Less: the portion of the total balance that is intercompany and therefore eliminated for GAAP purposes		(2,732	)
Plus: amounts ceded to NICO which are not reported as reinsurance recoverables for statutory purposes		2,767
Plus: the amount of reserve and recoverable discounting included for statutory purposes which is added back for GAAP purposes		1,701
Total GAAP recoverables disclosed in US statutory reports		10,347
Structured settlements		730
Other legal entities*		3,853
Total amounts reported for GAAP purposes**	$	14,930
Percentage disclosed in detail in US statutory annual reports		69	%

* Not subject to US statutory reporting requirements

** The variance between the Statutory and GAAP balance relates to differences in accounting rules. Statutory rules allow the inclusion of affiliated balances, and the discounting of certain reserves and related recoverables. The statutory balance also excludes retroactive reinsurance contracts (NICO).

Page 28

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Consolidated Reinsurance Recoverables

	March 31, 2003
Categories	Recoverable		Bad Debt		% of Gross
Top 10 reinsurers	$	7,623	$	90	1.2	%
Other reinsurers balances >$20 million		2,603		194	7.5	%
Other reinsurers balances <$20 million		1,924		141	7.3	%
Mandatory pools and government agencies		784		4	0.5	%
Structured settlements		651		3	0.5	%
Captives		691		4	0.6	%
Other		807		515	63.8	%
Total Recoveries	$	15,083	$	951	6.3	%

At March 31, 2003, $10.3 billion of consolidated recoverables were from rated reinsurers, of which 95% were rated A- or better by Standard & Poor's.

Top 10 Reinsurers	Other Reinsurers Balances >$20 million
AXA	Allianz Group	IRB—Brasil Resseguros S.A.
Berkshire Hathaway Insurance Group	American International Group	Liberty Mutual Insurance Companies
EQUITAS	Chubb Insurance Group	Markel Corporation Group
GE Global Insurance Group	CNA Insurance Companies	Mitsui Sumitomo Insurance Group
Lloyd’s of London	Converium Group	Nationwide Group
Munich Re	DaimlerChrysler Group	Overseas Partners Ltd.
SCOR Group	Dominion Ins. Co. Ltd.	PMA Capital Insurance Company
Swiss Re Group	Dorinco Reinsurance Co.	RenaissanceRe Holdings Ltd
XL Capital Group	Electric Insurance Group	Royal & Sun Alliance Insurance Group plc
Zurich Financial Services Group	Everest Re Group	Scan Re Group
	Fairfax Financial	Sompo Japan Insurance Inc
	FM Global Group	St. Paul Companies
	Gerling Group	Toa Reinsurance Company
	Great American P&C Insurance Companies	Tokio Marine & Fire Group
	Hannover Group	Travelers Property Casualty Group
	Hartford Insurance Group	Trenwick Group
	Independence Blue Cross (Amerihealth)	White Mountains Insurance Group
	ING—Internationale Nederlanden Group	WR Berkley Corp

Classification of reinsurer balances excludes any consideration of related collateral or offsetting balances.

Page 29

ACE Limited

Reinsurance Recoverable

(in millions of U.S. dollars)

(Unaudited)

Reinsurance Recoverable for Active Operations

	March 31, 2003
Categories	Recoverable		Bad Debt		% of Gross
Top 10 reinsurers	$	3,891	$	58	1.5%
Other reinsurers balances >$20 million		1,485		93	6.3%
Other reinsurers balances <$20 million		1,529		97	6.3%
Mandatory pools and government agencies		753		4	0.5%
Structured settlements		274		1	0.4%
Captives		673		3	0.4%
Other		342		193	56.4%
Total Recoveries	$	8,947	$	449	5.0%

At March 31, 2003, $5.7 billion of the active operations’ recoverables were from rated reinsurers, of which 95% were rated A- or better by Standard & Poor’s. At March 31, 2003, the $8.9 billion gross balance includes government pools of $753 million and structured settlements with recourse of $274 million, both of which present very limited collectibility exposure. The Company held collateral of $2.0 billion, of which $1.3 billion was matched and usable against existing recoverables.

Top 10 Reinsurers	Other Reinsurers Balances >$20 million
AXA	Allianz Group	Independence Blue Cross (Amerihealth)
Berkshire Hathaway Insurance Group	American International Group	ING—Internationale Nederlander Group
GE Global Insurance Group (Employers Re)	Chubb Insurance Group	IRB—Brasil Resseguros S.A.
Hannover	Converium Group	Liberty Mutual Insurance Companies
Lloyd’s of London	CNA Insurance Companies	Overseas Partners Ltd.
Munich Re	DaimlerChrysler Group	PMA Capital Insurance Company
SCOR Group	Dorinco Reinsurance Co.	RenaissanceRe Holdings Ltd
Swiss Re Group	Electric Insurance Group	Royal & Sun Alliance Insurance Group plc
XL Capital Group	EQUITAS	Scan Re Group
Zurich Financial Services Group	Everest Re Group	St. Paul Companies
	Fairfax Financial	Toa Reinsurance Company
	FM Global Group	Trenwick Group
	Gerling Group	White Mountains Insurance Group

Classification of reinsurer balances excludes any consideration of related collateral or offsetting balances.

Page 30

ACE Limited

Reconciliation of Unpaid Losses and Loss Expenses

(in millions of U.S. dollars)

(Unaudited)

	Total									Ongoing									Runoff (1)
	Unpaid Losses									Unpaid Losses									Unpaid Losses
	Gross			Ceded			Net			Gross			Ceded			Net			Gross			Ceded			Net
Balance at December 31, 2001	$	20,728		$	10,629		$	10,099		$	13,001		$	5,381		$	7,620		$	7,236		$	4,757		$	2,479
Losses and loss expenses incurred		1,599			746			853			1,465			623			842			134			123			11
Losses and loss expenses paid		(1,792	)		(816	)		(976	)		(1,501	)		(686	)		(815	)		(291	)		(130	)		(161	)
Other (incl. foreign exch. revaluation)		(20	)		26			(46	)		(20	)		26			(46	)		—			—			—
Balance at March 31, 2002	$	20,515		$	10,585		$	9,930		$	12,945		$	5,344		$	7,601		$	7,079		$	4,750		$	2,329
Losses and loss expenses incurred		1,806			845			961			1,668			717			951			138			128			10
Losses and loss expenses paid		(1,739	)		(699	)		(1,040	)		(1,434	)		(574	)		(860	)		(305	)		(125	)		(180	)
Other (incl. foreign exch. revaluation)		79			26			53			79			26			53			—			—			—
Balance at June 30, 2002	$	20,661		$	10,757		$	9,904		$	13,258		$	5,513		$	7,745		$	6,912		$	4,753		$	2,159
Losses and loss expenses incurred		2,177			849			1,328			2,166			843			1,323			11			6			5
Losses and loss expenses paid		(1,348	)		(586	)		(762	)		(1,173	)		(558	)		(615	)		(175	)		(28	)		(147	)
Other (incl. foreign exch. revaluation)		151			11			140			151			11			140			—			—			—
Balance at September 30, 2002	$	21,641		$	11,031		$	10,610		$	14,402		$	5,809		$	8,593		$	6,748		$	4,731		$	2,017
Losses and loss expenses incurred		4,530			2,766			1,764			2,400			1,115			1,285			2,130			1,651			479
Losses and loss expenses paid		(2,023	)		(851	)		(1,172	)		(1,628	)		(668	)		(960	)		(395	)		(183	)		(212	)
Other (incl. foreign exch. revaluation)		167			51			116			167			51			116			—			—			—
Balance at December 31, 2002	$	24,315		$	12,997		$	11,318		$	15,341		$	6,307		$	9,034		$	8,483		$	6,199		$	2,284
Losses and loss expenses incurred		2,390			1,107			1,283			2,365			1,104			1,261			25			3			22
Losses and loss expenses paid		(2,155	)		(984	)		(1,171	)		(1,910	)		(893	)		(1,017	)		(245	)		(91	)		(154	)
Other (incl. foreign exch. revaluation)		86			16			70			79			16			63			7			—			7
Balance at March 31, 2003	$	24,636		$	13,136		$	11,500		$	15,875		$	6,534		$	9,341		$	8,270		$	6,111		$	2,159
Losses and loss expenses incurred		2,511			1,052			1,459			2,463			1,020			1,443			48			32			16
Losses and loss expenses paid		(2,415	)		(1,357	)		(1,058	)		(1,964	)		(1,134	)		(830	)		(451	)		(223	)		(228	)
Other (incl. foreign exch. revaluation)		208			123			85			208			123			85			—			—			—
Balance at June 30, 2003	$	24,940		$	12,965		$	11,975		$	16,582		$	6,543		$	10,039		$	7,867		$	5,920		$	1,947

(1) The run-off reserves primarily include Brandywine group, the Commercial Insurance Service—Middle Market Worker’s Comp. reserves and the pre-1997 Westchester Specialty reserves. Prior year split between gross and ceded reserves and loss activity in ongoing and runoff categories has been revised to properly reflect intercompany reinsurance eliminations.

Page 31

ACE Limited

Asbestos and Environmental Reserves; September 11, 2001 Tragedy

(in millions of U.S. dollars)

(Unaudited)

Consolidated Asbestos and Environmental:

	June 30, 2003						December 31, 2002
	Gross		Ceded		Net		Gross		Ceded		Net
Asbestos reserves	$	3,083	$	2,702	$	381	$	3,192	$	2,746	$	446
Environmental and other latent exposures		1,232		917		315		1,352		949		403
Total	$	4,315	$	3,619	$	696	$	4,544	$	3,695	$	849
Asbestos claim payments	$	109	$	44	$	65	$	284	$	166	$	118
Environmental and other latent exposure claim payments	$	120	$	32	$	88	$	311	$	116	$	195
Gross 3 year asbestos survival ratio at December 31, 2002								11.3x
Gross 1 year asbestos survival ratio at December 31, 2002								12.0x

September 11, 2001 Tragedy Information as of June 30, 2003:

	Ultimate Losses		Paid to Date		Unpaid Losses
Gross losses	$	1,829	$	918	$	911
Ceded		1,179		641		538
Net losses	$	650	$	277	$	373
Recoveries
Billed to reinsurers	$	641
Collected		602
Current outstanding	$	39

Page 32

ACE Limited

Capital Structure

(in millions of U.S. dollars)

	June 30 2003 (Unaudited)			March 31 2003 (Unaudited)			December 31 2002 (Audited)			December 31 2001 (Audited)
Total short-term debt	$	146		$	146		$	146		$	495
Total long-term debt(1)		1,749			1,749			1,749			1,349
Total debt	$	1,895		$	1,895		$	1,895		$	1,844
Total trust preferreds(2)	$	475		$	475		$	475		$	875
Mezzanine equity(3)	$	—		$	311		$	311		$	311
Perpetual preferred(4)	$	557		$	—		$	—		$	—
Ordinary Shareholders’ equity	$	7,621		$	6,702		$	6,389		$	6,107
Total Shareholders’ equity	$	8,178		$	6,702		$	6,389		$	6,107
Total capitalization	$	10,548		$	9,383		$	9,070		$	9,137
Tangible equity(5)	$	5,467		$	3,991		$	3,672		$	3,335
Leverage Ratios:
Debt/ total capitalization		18.0	%		20.2	%		20.9	%		20.2	%
Debt plus trust preferreds/ total capitalization		22.5	%		25.3	%		26.1	%		29.8	%
Debt/ tangible equity		34.7	%		47.5	%		51.6	%		55.3	%
Debt plus trust preferreds and mezzanine equity/ tangible equity		43.4	%		67.2	%		73.0	%		90.9	%
Debt plus total preferred stock/ total capitalization		27.7	%		25.3	%		26.1	%		29.8	%

(1) $50 million of ACE INA subordinated notes due 2009 was repaid in both the second and third quarters of 2002. An additional $500 million of Senior Debt was issued by ACE Limited in March 2002.

(2) $400 million of ACE INA Rhino Preferred Securities due 2002 was repaid in the second and third quarters of 2002.

(3) The FELINE PRIDES converted in the second quarter of 2003.

(4) Preferred shares $575 million, net of issuance costs $18 million.

(5) Tangible equity is equal to Shareholders' equity less goodwill.

Page 33

ACE Limited

Fixed Income Investment Portfolio

(in millions of U.S. dollars)

(Unaudited)

	June 30, 2003			March 31, 2003			December 31, 2002
Fixed maturities	$	16,884		$	15,044		$	14,420
Securities on loan		546			521			293
Short-term investments		2,048			2,081			1,885
Cash		576			477			663
	$	20,054		$	18,123		$	17,261
	June 30, 2003 Market Value		% of Total	March 31, 2003 Market Value		% of Total	December 31, 2002 Market Value		% of Total
Allocation:
Treasury	$	886	4.4%	$	859	4.7%	$	842	4.9%
Agency		1,383	6.9%		1,074	5.9%		973	5.6%
Corporate		7,796	38.9%		7,117	39.3%		6,459	37.3%
Mortgage-backed securities		3,825	19.0%		3,415	18.8%		3,302	19.2%
Asset-backed securities		439	2.3%		338	1.9%		352	2.0%
Municipal		1,346	6.7%		1,220	6.7%		1,201	7.0%
Non-US		1,755	8.7%		1,542	8.5%		1,584	9.2%
Cash & cash equivalent		2,624	13.1%		2,558	14.2%		2,548	14.8%
Total	$	20,054	100.0%	$	18,123	100.0%	$	17,261	100.0%
	June 30, 2003 Market Value		% of Total	March 31, 2003 Market Value		% of Total	December 31, 2002 Market Value		% of Total
Credit Quality:
AAA	$	9,841	49.1%	$	8,808	48.6%	$	8,566	49.4%
AA		3,623	18.1%		3,265	18.0%		2,880	16.7%
A		3,162	15.7%		3,027	16.7%		2,920	17.0%
BBB		1,592	7.9%		1,464	8.1%		1,314	7.6%
BB		782	3.9%		697	3.8%		662	3.8%
B		939	4.7%		791	4.4%		843	4.9%
Other		115	0.6%		71	0.4%		76	0.6%
Total	$	20,054	100.0%	$	18,123	100%	$	17,261	100%
Avg. duration of fixed maturities, adj. for int. rate swaps			3.2 years			3.1 years			3.1 years
Avg. market yield of fixed maturities			3.8%			4.2%			4.4%
Avg. credit quality			AA			AA			AA

Page 34

ACE Limited

Investment Information at June 30, 2003

(in millions of U.S. dollars)

(Unaudited)

	June 30, 2003				March 31, 2003				December 31, 2002
	Market Value		Cost/ Amortized cost		Market Value		Cost/ Amortized cost		Market Value		Cost/ Amortized cost
Fixed maturities	$	16,884	$	15,974	$	15,044	$	14,370	$	14,420	$	13,791
Equity securities		471		400		410		414		411		442
Securities on loan		546		498		521		494		293		286
Short-term investments		2,048		2,048		2,081		2,081		1,885		1,885
Other investments		661		626		685		657		652		622
Cash		576		576		477		477		663		663
	$	21,186	$	20,122	$	19,218	$	18,493	$	18,324	$	17,689

Top 10 Exposures—Fixed Income Investments and Single Name Credit Default Swaps

	June 30, 2003
General Electric	$	289
General Motors		199
Citigroup Inc		173
Verizon Communications		141
HSBC Holdings Plc		119
AIG		118
Merrill Lynch		116
Goldman Sachs Group		103
Morgan Stanley		102
Ford Motor Co		101

	March 31, 2003
General Electric	$	287
General Motors		170
Citigroup Inc		168
Verizon Communications		143
AIG		118
Ford Motor Co		113
Merrill Lynch		110
Morgan Stanley		108
Goldman Sachs Group		101
HSBC Holdings Plc		100

	December 31, 2002
General Electric	$	258
General Motors		171
Citigroup Inc		154
Verizon Communications		127
AIG		123
Ford Motor Co		123
Bank of America		119
Wachovia Corp		106
Wells Fargo		105
JP Morgan Chase		105

Page 35

ACE Limited

Investment Portfolio Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

(Unaudited)

	Three months ended June 30, 2003									Six months ended June 30, 2003
	Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact
Investment portfolio gains (losses)
Fixed maturities	$	49		$	254		$	303		$	61		$	310		$	371
Interest rate swaps		(5	)		—			(5	)		(14	)		—			(14	)
Equity securities		(4	)		79			73			(54	)		113			57
Equity and fixed income derivatives		20			—			20			20			—			20
Foreign exchange gains (losses)		6			—			6			15			—			15
Other		(11	)		7			(2	)		(11	)		5			(4	)
		55			340			395			17			428			445
Credit default swaps (FAS 133 adjustment)		52			—			52			50			—			50
Total gains (losses)		107			340			447			67			428			495
Income tax (expense) benefit		(22	)		(67	)		(89	)		(14	)		(76	)		(90	)
Net gains (losses)	$	85		$	273		$	358		$	53		$	352		$	405

(1) The quarter includes impairments of $1M for fixed maturities and $8M for equities and $16M for other. Year to date includes impairments of $19M for fixed maturities and $54M for equities and $16M for other.

	Three months ended June 30, 2002									Six months ended June 30, 2002
	Net Realized Gains (Losses) (2)			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) (2)			Net Unrealized Gains (Losses)			Net Impact
Investment portfolio gains (losses)
Fixed maturities	$	(26	)	$	210		$	184		$	(40	)	$	324		$	284
Interest rate swaps		(30	)		—			(30	)		(23	)		—			(23	)
Equity securities		4			(60	)		(56	)		2			(64	)		(62	)
Equity and fixed income derivatives		(58	)		—			(58	)		(61	)		—			(61	)
Foreign exchange gains (losses)		3			—			3			2			—			2
Other		—			(1	)		(1	)		—			(7	)		(7	)
		(107	)		149			42			(120	)		253			133
Credit default swaps (FAS 133 adjustment)		(33	)		—			(33	)		(46	)		—			(46	)
Total gains (losses)		(140	)		149			9			(166	)		253			87
Income tax (expense) benefit		15			(42	)		(27	)		23			(62	)		(39	)
Net gains (losses)	$	(125	)	$	107		$	(18	)	$	(143	)	$	191		$	48

(2) The quarter includes impairments of $27M for fixed maturities. Year to date includes impairments of $43M for fixed maturities and $1M for equities.

Page 36

ACE Limited

Reconciliation to Generally Accepted Accounting Principles

(in millions of U.S. dollars)

(Unaudited)

Regulation G—Non-GAAP Financial Measures

In presenting our results, we have included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations; however,

they should not be viewed as a substitute for measures determined in accordance with GAAP. The non-GAAP measure is a common performance measurement and is defined as net income (loss) excluding net realized gains (losses) on investments, the tax effect of net realized gains (losses) on investments and the cumulative effect of adopting a new accounting standard, net of income tax. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

We exclude net realized gains (losses) on investments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. The cumulative effect of adopting a new accounting standard is excluded from our calculation. We believe these amounts are largely independent of our business and including them would distort the analysis of trends. Income (loss) excluding net realized gains (losses) and the cumulative effect of adopting a new accounting standard should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

																Full Year			Full Year
	2Q-03			1Q-03			4Q-02			3Q-02			2Q-02			2002			2001
Net income (loss), as reported	$	371		$	247		$	(168	)	$	(57	)	$	104		$	77		$	(146	)
Net realized gains (losses)		107			(40	)		(88	)		(235	)		(140	)		(489	)		(58	)
Tax effect of net realized gains (losses)		(22	)		8			19			30			15			72			8
Cumulative effect of adopting a new acct’ standard		—			—			—			—			—			—			(23	)
Income (loss) excluding net realized gains (losses) and the cumulative effect of adopting a new accounting standard	$	286		$	279		$	(99	)	$	148		$	229		$	494		$	(73	)
Income (loss) excluding net realized gains (losses) and the cumulative effect of adopting a new accounting standard
Net income (loss)	$	371		$	247		$	(168	)	$	(57	)	$	104		$	77		$	(146	)
Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments		354			112			131			198			135			358			65
Reclassification adjustment for net realized gains (losses) included in net income		(14	)		(24	)		55			28			13			98			(16	)
Cumulative translation adjustment		58			26			(4	)		4			5			—			(7	)
Minimum pension liability adjustment		(40	)		—			—			—			—			—			—
Income tax (expense) benefit related to other comprehensive income items		(82	)		(16	)		(27	)		(69	)		(46	)		(118	)		(10	)
Other comprehensive income (loss)		275			98			155			161			107			338			32
Comprehensive income (loss)	$	646		$	345		$	(13	)	$	104		$	211		$	415		$	(114	)

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ACE Limited

Reconciliation to Generally Accepted Accounting Principles

(in millions of U.S. dollars, except share and per share data)

(Unaudited)

Reconciliation of Book Value per Ordinary Share to Diluted Book Value per Ordinary Share

	June 30, 2003			March 31, 2003		December 31, 2002
Shareholders’ equity	$	8,178		$	6,702	$	6,389
Net proceeds from assumed conversions of options		291			226		138
Proceeds from issuance of preferred shares		(557	)		—		—
Conversion of mezzanine equity		—			311		311
Numerator for diluted book value per share calculation		7,912			7,239		6,838
Less: goodwill		2,711			2,711		2,717
Numerator for diluted tangible book value per share	$	5,201		$	4,528	$	4,121
Ordinary Shares outstanding—end of period		277,755,290			264,491,819		262,679,356
Shares issued from assumed conversions of options		12,669,243			11,697,607		8,560,131
Shares issued on conversion of mezzanine equity		—			11,814,373		11,814,373
Denominator for diluted and diluted tangible book value		290,424,533			288,003,799		283,053,860
Book value per Ordinary Share	$	27.44		$	25.34	$	24.32
Diluted book value per Ordinary Share	$	27.24		$	25.14	$	24.16
Diluted tangible book value per Ordinary Share	$	17.91		$	15.72	$	14.56

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Glossary

Annualized return on Ordinary shareholders’ equity:	Income (loss) excluding net realized gains (losses) less perpetual preferred and mezzanine equity dividend divided by average Ordinary shareholders’ equity for the period. To annualize a quarterly rate multiply by four.
Combined ratio:	The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio for the property and casualty and financial services operations.
Diluted book value per Ordinary Share:	Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options divided by the sum of shares outstanding and the number of options assumed issued.
Diluted tangible book value per Ordinary Share:	Ordinary shareholders’ equity and net proceeds from assumed conversions of outstanding in-the-money options less goodwill divided by the sum of shares outstanding and the number of options assumed issued.
Effective tax rate:	Income tax expense divided by the sum of income tax expense and income (loss) excluding net realized gains (losses).
FAS 115:	Unrealized gains (losses) on investments and the deferred tax component included in shareholders’ equity.
Life underwriting income:	Net premium earned and net investment income less future policy benefits, acquisition costs and administrative expenses.
NM:	Not meaningful.
Return on Ordinary shareholders’ equity:	Income (loss) excluding net realized gains (losses) less perpetual preferred and mezzanine equity dividend divided by average Ordinary shareholders’ equity.
Ordinary shareholders’ equity:	Shareholders’ equity less perpetual preferred shares.
Property and casualty combined ratios:	Loss and loss expense ratios, policy acquisition cost ratios and administrative expense ratios exclude life reinsurance business and financial services segment.
Tangible equity:	Shareholders’ equity less goodwill.
Total capitalization:	Short-term debt, long-term debt, trust preferreds, mezzanine equity, perpetual preferred shares and shareholders’ equity.

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