8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant To Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – July 29, 2008

ACE LIMITED

(Exact name of registrant as specified in its charter)

Switzerland	1-11778	98-0091805
(State or other jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Mainaustrasse 30

Zurich CH-8008,

Switzerland

Telephone: +41 (0)43 456 76 00

(Address of principal executive offices)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On July 29, 2008, ACE Limited issued a press release reporting its second quarter 2008 results and the availability of its second quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

Exhibit Number	Description
99.1	Press release, dated July 29, 2008, reporting second quarter results
99.2	Second Quarter 2008 Financial Supplement

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
By:	/s/ Philip V. Bancroft
	Philip V. Bancroft
	Chief Financial Officer

DATE: July 29, 2008

EXHIBIT INDEX

Number	Description	Method of Filing
99.1	Press release, dated July 29, 2008, reporting second quarter results	Furnished herewith
99.2	Second Quarter 2008 Financial Supplement	Furnished herewith

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Investor Contact:	Helen M. Wilson
	(441) 299-9283
	helen.wilson@ace.bm
Media Contact:	Patrick F. McGovern
	(212) 827-4426
	patrick.mcgovern@ace-ina.com

ACE LIMITED REPORTS RECORD SECOND QUARTER 2008 RESULTS; OPERATING INCOME UP 11%

TO $738 MILLION; NET INCOME UP 15% TO $746 MILLION

ZURICH, Switzerland – July 29, 2008 — ACE Limited (NYSE: ACE) today reported net income for the second quarter ended June 30, 2008, of $2.20 per common share after payment of preferred dividends, compared with $1.93 per share for the same quarter last year. Income excluding net realized gains (losses) for the second quarter was $2.18 per share, compared with $1.98 per share for the same quarter of last year.⁽¹⁾ The quarter was marked by financial market volatility in both the credit and equity markets, which impacted net income and book value. The net realized and unrealized loss after tax was $524 million for the quarter. This loss is the result of market pricing changes only. Actual credit-related impairments included in this number were insignificant, at approximately $28 million. Book value increased $149 million for the quarter excluding the redemption of preferred shares, and the annualized return on average equity was 17.8%.⁽²⁾ The results for the quarter reflect the acquisition of Combined Insurance Company of America and certain of its subsidiaries (Combined Insurance) effective April 1, 2008.

Second Quarter Summary

(in millions, except per share amounts)

(Unaudited)

									(Per Share - Diluted)
	2008			2007			Change		2008		2007			Change
Net income	$	746		$	649		15	%	$	2.20	$	1.93		14	%
Net realized gains (losses), net of tax		8			(15	)	—			0.02		(0.05	)	—
Income excluding net realized gains (losses), net of tax(1)	$	738		$	664		11	%	$	2.18	$	1.98		10	%
Combined ratio		87.8	%		87.6	%	—			—		—		—

Net income for the first six months of 2008 was $3.31 per share, compared with $4.02 per share for the first six months of 2007. For the first six months of 2008, income excluding net realized gains (losses) was $4.33 per share, compared with $3.95 per share for the same period of 2007. ⁽¹⁾ Book value increased $207 million for the first six months excluding the redemption of preferred shares. The results for the first six months reflect the acquisition of Combined Insurance effective April 1, 2008.

Six Months Summary

(in millions, except per share amounts)

(Unaudited)

								(Per Share - Diluted)
	2008			2007		Change		2008			2007		Change
Net income	$	1,123		$	1,350	(17	)%	$	3.31		$	4.02	(18	)%
Net realized gains (losses), net of tax		(340	)		23	—			(1.02	)		0.07	—
Income excluding net realized gains, net of tax(1)	$	1,463		$	1,327	10	%	$	4.33		$	3.95	10	%

Evan Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “It was a record quarter for ACE, with after-tax operating income increasing 11% to $738 million. All divisions of the company performed well and contributed to a return on equity of almost 18%. Additionally, our revenue and earnings benefited from the consolidation of Combined Insurance. Global insurance market conditions are soft and will remain so for the foreseeable future, as will the difficult financial and economic conditions. Nonetheless, I remain confident in our ability to produce superior results. We are well positioned for the future.”

Other operating highlights were as follows:

• Net premiums written and earned increased 17% and 14%, respectively, over the prior year quarter (4% and 1%, respectively, excluding Combined Insurance).

• The combined ratio for the quarter was 87.8% compared with 87.6% for the prior year quarter.

• Underwriting income excluding life segment increased 3% over the prior year quarter to $373 million and benefited from positive prior period development of $104 million compared to $40 million pre-tax for the same quarter last year. This was approximately two-thirds short-tail-related.

• The expense ratio reported in the quarter increased by 3.1 percentage points from last year’s second quarter. The addition of Combined Insurance contributed approximately one percentage point to this increase, while one percentage point was related to the change in our business mix to Accident & Health (A&H) and international Property & Casualty (P&C), which have higher expense ratios.

• Operating cash flow was $1.067 billion for the quarter.

• Invested assets increased by $684 million or 1.5% during the second quarter and $4.4 billion or 11% over the prior year quarter.

• Reinsurance recoverables decreased $132 million for the quarter excluding Combined Insurance.

• Net P&C loss reserves increased $644 million during the quarter; excluding Combined Insurance, net P&C loss reserves increased $293 million.

• Net investment income increased 13% over the prior year quarter to $532 million.

• Return on average equity for the second quarter was 17.8%

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• Book value increased $207 million from December 31, 2007 excluding the redemption of the preferred shares while book value per share⁽³⁾ increased from $48.89 at December 31, 2007 to $48.99.

• The net realized and unrealized loss after tax was $524 million. This includes a $697 million loss on the investment portfolio offset by gains of approximately $60 million from derivatives, principally related to the guaranteed minimum income benefit (GMIB) liabilities of our life reinsurance business, and gains of $113 million from our share of partially-owned insurance companies. Again, the loss was the result of market pricing changes only. Actual credit-related impairments were $28 million.

Details of our financial results for our business segments are available in the ACE Limited Financial Supplement. Key segment items include:

• Insurance-North American: Net premiums written increased 1% over the prior year quarter. The combined ratio was 89.5% compared with 87.5% for the same quarter last year.

• Insurance-Overseas General: Net premiums written increased 24% over the prior year quarter, 15% on a currency-adjusted basis and 5% on a currency-adjusted basis excluding Combined Insurance. The combined ratio was 86.9% compared with 88.2% for the same quarter last year.

• Global Reinsurance: Net premiums written decreased 19% over the prior year quarter. The combined ratio was 68.6% compared with 75.0% for the same quarter last year.

• Life Insurance and Reinsurance: Net premiums written increased 330% over the prior year quarter; excluding the results of Combined Insurance, net premiums written increased 21%. Income excluding net realized gains (losses) increased 51% to $65 million over the prior year quarter; excluding the results of Combined Insurance, operating income decreased 9% to $39 million.

Please refer to the ACE Limited Financial Supplement dated June 30, 2008, which is posted on the company’s website in the Investor Information section, and access Financial Reports for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio and capital structure. The URL reference is: http://media.corporate-ir.net/media_files/irol/10/100907/fin_supp_june_30_2008.xls. (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser’s URL address field.)

ACE will host its second quarter earnings conference call and webcast on Wednesday, July 30, 2008, beginning at 8:30 a.m. ET. The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 888-797-3006 (within the United States) or 913-312-0969 (international); passcode 4049134. Please refer to the ACE Limited website in the Investor Information section under Calendar of Events for details. A replay of the call will be available for approximately one month. To listen to the replay, dial: 888-203-1112 (in the United States) or 719-457-0820 (international); passcode 4049134.

The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, the ACE Group of Companies conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com.

¹ Non-GAAP Financial Measures:

Operating Income or Income excluding net realized gains (losses), net of tax is a common performance measurement for insurance companies. 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) and net realized gains (losses) included in Other (income) expense related to partially-owned insurance companies because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities.

Underwriting income is calculated by subtracting losses and loss expenses, life and annuity benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other (income) expense, interest and income tax expense and net

Page 3/7

realized gains (losses). We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

Tangible shareholders’ equity is shareholders’ equity less goodwill. See reconciliation of Non-GAAP Financial Measures beginning on page 21 in the financial supplement.

These measures should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

² Calculated using income excluding net realized gains (losses) less perpetual preferred securities divided by average ordinary shareholders’ equity for the period. To annualize a quarterly rate, multiply by four.

³ Book value per ordinary share is ordinary shareholders’ equity divided by the shares outstanding. Tangible book value per ordinary share is ordinary shareholders’ equity less goodwill divided by the shares outstanding.

Cautionary Statement Regarding Forward-Looking Statements:

Forward-looking statements made in this press release, such as those related to economic conditions, company performance, reserves and valuations, and integration of ACE’s recent acquisitions, 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 could be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and unexpected financial or operational performance with respect to acquired companies, unexpected effects or difficulties relating to the company’s recent re-domestication to Switzerland, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance recoverable, credit developments among reinsurers, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war and economic, political, regulatory, insurance and reinsurance business conditions, as well as management’s response to these factors, and other factors identified in the company’s filings with the Securities and Exchange Commission. 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.

(tables to follow)

Page 4/7

ACE Limited

Summary Consolidated Balance Sheets

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

(Unaudited)

	June 30 2008		December 31 2007
	(Unaudited)
Assets
Total investments	$	43,843	$	41,779
Cash		582		510
Insurance and reinsurance balances receivable		4,086		3,540
Reinsurance recoverable		13,839		14,362
Other assets		15,426		11,899
Total assets	$	77,776	$	72,090
Liabilities
Unpaid losses and loss expenses	$	37,696	$	37,112
Unearned premium		7,054		6,227
Other liabilities		16,699		12,074
Total liabilities	$	61,449	$	55,413
Shareholders’ equity
Total shareholders’ equity	$	16,327	$	16,677
Total liabilities and shareholders’ equity	$	77,776	$	72,090
Book value per ordinary share (3)	$	48.99	$	48.89

Page 5/7

ACE Limited

Summary Consolidated Financial Data

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

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
	2008			2007			2008			2007
Gross premiums written	$	5,293		$	4,637		$	9,702		$	9,133
Net premiums written		3,598			3,082			6,752			6,352
Net premiums earned		3,428			3,008			6,368			6,090
Losses and loss expenses		1,895			1,793			3,474			3,653
Future policy benefits		89			33			152			69
Policy acquisition costs		569			434			1,037			851
Administrative expenses		461			356			836			712
Underwriting income(1)		414			392			869			805
Net investment income		532			471			1,021			922
Net realized gains (losses)		(126	)		(11	)		(479	)		5
Interest expense		62			42			108			88
Other (income) expense		125			(4	)		110			—
Income tax expense		137			165			290			294
Net income		746			649			1,123			1,350
Preference shares dividend		(13	)		(11	)		(24	)		(22	)
Net income available to holders of ordinary shares	$	733		$	638		$	1,099		$	1,328
Diluted earnings per share:
Income excluding net realized gains (losses) (1)	$	2.18		$	1.98		$	4.33		$	3.95
Net income	$	2.20		$	1.93		$	3.31		$	4.02
Weighted average diluted shares outstanding		333.2			330.1			332.3			329.7
Loss and loss expense ratio		58.5	%		61.4	%		57.1	%		61.8	%
Policy acquisition cost ratio		16.5	%		14.5	%		16.3	%		14.0	%
Administrative expense ratio		12.8	%		11.7	%		12.8	%		11.6	%
Combined ratio		87.8	%		87.6	%		86.2	%		87.4	%

Page 6/7

ACE Limited

Consolidated Supplemental Segment Information

(in millions of U.S. dollars)

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
	2008			2007			2008			2007
Gross Premiums Written
North American	$	2,718		$	2,589		$	4,899		$	4,858
Overseas General		1,876			1,621			3,654			3,280
Global Reinsurance		272			335			617			813
Life		427			92			532			182
Total	$	5,293		$	4,637		$	9,702		$	9,133
Net Premiums Written
North American	$	1,511		$	1,497		$	2,871		$	3,011
Overseas General		1,443			1,166			2,788			2,358
Global Reinsurance		270			332			614			808
Life		374			87			479			175
Total	$	3,598		$	3,082		$	6,752		$	6,352
Net Premiums Earned
North American	$	1,365		$	1,455		$	2,719		$	2,994
Overseas General		1,439			1,141			2,662			2,253
Global Reinsurance		257			325			520			668
Life		367			87			467			175
Total	$	3,428		$	3,008		$	6,368		$	6,090
Income Excluding Net Realized Gains (Losses) and Cumulative Effect (1)
North American	$	309		$	330		$	636		$	628
Overseas General		279			183			535			398
Global Reinsurance		148			139			292			271
Life		65			43			98			86
Corporate		(63	)		(31	)		(98	)		(56	)
Total	$	738		$	664		$	1,463		$	1,327

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EX-99.2

Exhibit 99.2

Investor Contact Helen M. Wilson Phone: (441) 299-9283 Fax: (441) 292-8675

This report is for informational purposes only. It should be read in conjunction 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.

email: investorrelations@ace.bm

Cautionary Statement Regarding Forward-Looking Statements: 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, such as statements concerning exposures, reserves and recoverables, could be affected by the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable and credit developments among reinsurers. The Company’s forward-looking statements could also be affected by competition, pricing and policy term trends, the levels of new and renewal business achieved, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war, integration activities and unexpected financial or operational performance with respect to acquired companies, or unexpected effects or difficulties relating to the Company’s recent re-domestication to Switzerland. 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
	- Consolidated Financial Highlights	1
II.	Consolidated Results
	- Consolidated Results - Consecutive Quarters	2
	- Summary Consolidated Balance Sheets	3
	- Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business	4
	- Consolidating Statement of Operations	5-6
III.	Segment Results
	- Insurance - North American	7
	- Insurance - Overseas General	8
	- Global Reinsurance	9
	- Life Insurance and Reinsurance	10
IV.	Balance Sheet Details
	- Loss Reserve Rollforward	11
	- Reinsurance Recoverable Analysis	12 -14
	- Investment Portfolio	15 -17
	- Net Realized and Unrealized Gains (Losses)	18
	- Capital Structure	19
	- Computation of Basic and Diluted Earnings Per Share	20
V.	Other Disclosures
	- Non-GAAP Financial Measures	21
	- Book Value per Common Share	22
	- Comprehensive Income	23
	- Glossary	24

ACE Limited Consolidated Financial Highlights (in millions of U.S. dollars, except share, per share data and ratios) (Unaudited)

	Three months ended June 30								Six months ended June 30
	2008			2007			% Change 2Q-08 vs. 2Q-07		2008			2007			% Change YTD-08 vs. YTD-07
Gross premiums written	$	5,293		$	4,637		14	%	$	9,702		$	9,133		6	%
Net premiums written	$	3,598		$	3,082		17	%	$	6,752		$	6,352		6	%
Net premiums earned	$	3,428		$	3,008		14	%	$	6,368		$	6,090		5	%
Net investment income	$	532		$	471		13	%	$	1,021		$	922		11	%
Net income	$	746		$	649		15	%	$	1,123		$	1,350		-17	%
Income excluding net realized gains (losses) (1)	$	738		$	664		11	%	$	1,463		$	1,327		10	%
Comprehensive income	$	218		$	274		-20	%	$	306		$	1,049		-71	%
Operating cash flow	$	1,067		$	1,158		-8	%	$	2,082		$	2,394		-13	%
Combined ratio
Loss and loss expense ratio		58.5	%		61.4	%				57.1	%		61.8	%
Underwriting and administrative expense ratio		29.3	%		26.2	%				29.1	%		25.6	%
Combined ratio		87.8	%		87.6	%				86.2	%		87.4	%
Annualized ROE*		17.8	%		18.0	%				17.7	%		18.4	%
Annualized ROE, excluding FAS 115*		17.9	%		18.6	%				17.9	%		19.0	%
Effective tax rate on income excluding net realized gains (losses)		17	%		20	%				19	%		19	%
Diluted earnings per share
Income excluding net realized gains (losses)(1)	$	2.18		$	1.98		10	%	$	4.33		$	3.95		10	%
Net income	$	2.20		$	1.93		14	%	$	3.31		$	4.02		-18	%
Book value per common share	$	48.99		$	44.46		10	%	$	48.99		$	44.46		10	%
Tangible book value per common share	$	38.15		$	35.82		7	%	$	38.15		$	35.82		7	%
Weighted average basic common shares outstanding		328.6			324.5					327.9			324.3
Weighted average diluted common shares outstanding		333.2			330.1					332.3			329.7
Debt/total capitalization		19.6	%		12.2	%				19.6	%		12.2	%

(1) See page 21 Non-GAAP Financial Measures.

* Calculated using income excluding net realized gains (losses)

Financial Highlights Page 1

ACE Limited Consolidated Results - Consecutive Quarters (in millions of U.S. dollars) (Unaudited)

ACE Limited Consolidated

	2Q-08			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Consolidated Results Excluding Life Segment
Gross premiums written	$	4,866		$	4,304		$	4,035		$	4,363		$	4,545		$	9,170		$	8,951		$	17,349
Net premiums written		3,224			3,049			2,716			2,705			2,995			6,273			6,177			11,598
Net premiums earned		3,061			2,840			2,959			3,055			2,921			5,901			5,915			11,929
Losses and loss expenses		1,785			1,579			1,788			1,910			1,793			3,364			3,653			7,351
Future policy benefits		5			—			—			—			—			5			—			—
Policy acquisition costs		506			460			448			450			422			966			828			1,726
Administrative expenses		392			362			372			345			344			754			688			1,405
Underwriting income excluding Life segment	$	373		$	439		$	351		$	350		$	362		$	812		$	746		$	1,447
Life underwriting income excluding investment income		41			16			16			30			30			57			59			105
Net investment income		532			489			504			492			471			1,021			922			1,918
Net realized gains (losses)		(126	)		(353	)		(66	)		—			(11	)		(479	)		5			(61	)
Interest expense		62			46			43			44			42			108			88			175
Other income (expense) (1)		125			(15	)		(49	)		(32	)		4			110			—			(81	)
Income tax expense (benefit)		137			153			141			140			165			290			294			575
Net income	$	746		$	377		$	572		$	656		$	649		$	1,123		$	1,350		$	2,578
Net realized gains (losses)		(126	)		(353	)		(66	)		—			(11	)		(479	)		5			(61	)
Net realized gains (losses) in other income (expense) (1)		120			(28	)		(57	)		(38	)		—			92			—			(95	)
Tax expense (benefit) on net realized gains (losses)		(14	)		(33	)		(2	)		(2	)		4			(47	)		(18	)		(22	)
Income excluding net realized gains (losses) (2)	$	738		$	725		$	693		$	692		$	664		$	1,463		$	1,327		$	2,712
% Change versus prior year period(3)
Net premiums written		8	%		-4	%		-3	%		-1	%		0	%		2	%		-1	%		-1	%
Net premiums earned		5	%		-5	%		0	%		1	%		3	%		0	%		6	%		3	%
Other ratios
Net premiums written/gross premiums written		66	%		71	%		67	%		62	%		66	%		68	%		69	%		67	%
Effective tax rate on income excluding net realized gains (losses)		17	%		20	%		17	%		17	%		20	%		19	%		19	%		18	%
Combined ratio (3)
Loss and loss expense ratio		58.5	%		55.6	%		60.4	%		62.5	%		61.4	%		57.1	%		61.8	%		61.6	%
Policy acquisition cost ratio		16.5	%		16.2	%		15.1	%		14.7	%		14.5	%		16.3	%		14.0	%		14.5	%
Administrative expense ratio		12.8	%		12.8	%		12.6	%		11.3	%		11.7	%		12.8	%		11.6	%		11.8	%
Combined ratio		87.8	%		84.6	%		88.1	%		88.5	%		87.6	%		86.2	%		87.4	%		87.9	%
Expense ratio		29.3	%		29.0	%		27.7	%		26.0	%		26.2	%		29.1	%		25.6	%		26.3	%
Expense ratio excluding A&H		25.4	%		25.9	%		24.4	%		22.8	%		23.6	%		25.7	%		22.6	%		23.1	%
Large losses and other items (3)
Catastrophe losses (before tax)	$	58		$	31		$	23		$	21		$	81		$	89		$	115		$	159
Prior period development - unfavorable (favorable) (4)	$	(104	)	$	(137	)	$	(89	)	$	(70	)	$	(40	)	$	(241	)	$	(58	)	$	(217	)
Loss and loss expense ratio excluding catastophe losses and prior period development		60.0	%		60.9	%		62.7	%		64.1	%		59.8	%		60.4	%		60.8	%		62.1	%

(1) Net realized investment and derivative losses related to our unconsolidated insurance affiliates.

(2) See page 21 Non-GAAP Financial Measures.

(3) Presented excluding the Life segment to allow for comparison and analysis with earnings guidance. This is a non-GAAP measure.

(4) For quarter 1 2008, prior period favorable development of $181 million less $44 million of profit share commission on Crop business settlement.

Consolidated Results Page 2

ACE Limited Summary Consolidated Balance Sheets (in millions of U.S. dollars, except per share data)

	June 30 2008			March 31 2008		December 31 2007
	(Unaudited)			(Unaudited)		(Audited)
Assets
Fixed maturities available for sale, at fair value	$	34,870		$	32,619	$	33,184
Fixed maturities held to maturity, at amortized cost		2,932			2,913		2,987
Equity securities, at fair value		1,490			1,660		1,837
Short-term investments, at fair value		3,137			4,795		2,631
Other investments		1,414			1,243		1,140
Total investments		43,843			43,230		41,779
Cash		582			511		510
Securities lending collateral		2,118			2,361		2,109
Insurance and reinsurance balances receivable		4,086			3,748		3,540
Reinsurance recoverable		13,839			13,969		14,362
Deferred policy acquisition costs		1,292			1,220		1,121
Value of business acquired		1,288			—		—
Prepaid reinsurance premiums		1,964			1,742		1,600
Goodwill and other intangible assets		3,612			2,879		2,838
Deferred tax assets		1,029			1,054		1,087
Investments in partially owned insurance companies		900			776		773
Other assets		3,223			2,429		2,371
Total assets	$	77,776		$	73,919	$	72,090
Liabilities
Unpaid losses and loss expenses	$	37,696		$	37,182	$	37,112
Unearned premiums		7,054			6,653		6,227
Future policy benefits		2,948			632		545
Insurance and reinsurance balances payable		2,991			2,756		2,843
Securities lending payable		2,118			2,361		2,109
Payable for securities purchased		1,802			1,391		1,798
Accounts payable, accrued expenses, and other liabilities		2,473			2,445		2,287
Short-term debt		1,050			1,341		372
Long-term debt		3,008			2,114		1,811
Trust preferred securities		309			309		309
Total liabilities		61,449			57,184		55,413
Shareholders’ equity
Total shareholders’ equity, excl. AOCI		16,381			16,261		15,908
Accumulated other comprehensive income (AOCI)		(54	)		474		769
Total shareholders’ equity		16,327			16,735		16,677
Total liabilities and shareholders’ equity	$	77,776		$	73,919	$	72,090
Book value per ordinary share (1)	$	48.99		$	48.65	$	48.89
Tangible book value per ordinary share (1)	$	38.15		$	40.00	$	40.28

(1) See page 21 Non-GAAP Financial Measures.

Consol Bal Sheet Page 3

ACE Limited Consolidated Premiums and Income Excluding Net Realized Gains (Losses) by Line of Business (in millions of U.S. dollars) (Unaudited)

ACE Limited Consolidated

	2Q-08		% of Total Consolidated		2Q-07		% of Total Consolidated		% Change 2Q-08 vs. 2Q-07		YTD 2008		% of Total Consolidated		YTD 2007		% of Total Consolidated		% Change YTD-08 vs. YTD-07
Net premiums written
Property and all other	$	1,119	31	%	$	1,001	32	%	12	%	$	2,200	33	%	$	2,011	32	%	9	%
Casualty		1,470	41	%		1,567	51	%	-6	%		2,946	44	%		3,326	52	%	-11	%
Subtotal		2,589	72	%		2,568	83	%	1	%		5,146	77	%		5,337	84	%	-4	%
Personal accident (A&H) (1)		886	25	%		427	14	%	107	%		1,378	20	%		840	13	%	64	%
Life (2)		123	3	%		87	3	%	41	%		228	3	%		175	3	%	30	%
Total Consolidated	$	3,598	100	%	$	3,082	100	%	17	%	$	6,752	100	%	$	6,352	100	%	6	%
Net premiums earned
Property and all other	$	982	29	%	$	923	31	%	6	%	$	1,863	29	%	$	1,782	29	%	5	%
Casualty		1,451	42	%		1,584	52	%	-8	%		2,949	46	%		3,331	55	%	-11	%
Subtotal		2,433	71	%		2,507	83	%	-3	%		4,812	75	%		5,113	84	%	-6	%
Personal accident (A&H) (1)		875	25	%		414	14	%	111	%		1,336	21	%		802	13	%	67	%
Life (2)		120	4	%		87	3	%	38	%		220	4	%		175	3	%	26	%
Total Consolidated	$	3,428	100	%	$	3,008	100	%	14	%	$	6,368	100	%	$	6,090	100	%	5	%
Income excluding net realized gains (losses)
Property, casualty, and all other	$	557	76	%		544	82	%	2	%		1,169	80	%		1,108	84	%	6	%
Personal accident (A&H) (1)		142	19	%		77	12	%	84	%		222	15	%		133	10	%	67	%
Life (2)		39	5	%		43	6	%	-9	%		72	5	%		86	6	%	-16	%
Total Consolidated	$	738	100	%	$	664	100	%	11	%	$	1,463	100	%	$	1,327	100	%	10	%

(1) Consolidated A&H includes Combined Insurance which is reported in the Insurance - Overseas General and Life Insurance and Reinsurance segments.

(2) Excludes the North America A&H business from Combined Insurance which is included in the Life Insurance and Reinsurance segment.

Line of Business Page 4

ACE Limited
Consolidating Statement of Operations Three months ended June 30, 2008 and 2007 (in millions of U.S. dollars) (Unaudited)

	Insurance - North American			Insurance - Overseas General			Global Reinsurance			Corporate & Other			Consolidated Excluding Life Segment			Life Insurance & Reinsurance			ACE Consolidated
June 30, 2008
Gross premiums written	$	2,718		$	1,876		$	272		$	—		$	4,866		$	427		$	5,293
Net premiums written		1,511			1,443			270			—			3,224			374			3,598
Net premiums earned		1,365			1,439			257			—			3,061			367			3,428
Losses and loss expenses		962			715			108			—			1,785			110			1,895
Future policy benefits		—			5			—			—			5			84			89
Policy acquisition costs		129			323			54			—			506			63			569
Administrative expenses		131			208			14			39			392			69			461
Underwriting income (loss)		143			188			81			(39	)		373			41			414
Net investment income		282			134			79			(3	)		492			40			532
Net realized gains (losses)		(105	)		(58	)		(20	)		(7	)		(190	)		64			(126	)
Interest expense		—			—			—			62			62			—			62
Other income (expense)		(3	)		17			(1	)		116			129			(4	)		125
Income tax expense (benefit)		106			38			11			(30	)		125			12			137
Net income (loss)		211			243			128			35			617			129			746
Net realized gains (losses)		(105	)		(58	)		(20	)		(7	)		(190	)		64			(126	)
Net realized gains (losses) in other income (expense)		—			15			—			105			120			—			120
Tax expense (benefit) on net realized gains (losses)		(7	)		(7	)		—			—			(14	)		—			(14	)
Income (loss) excluding net realized gains (losses) (1)	$	309		$	279		$	148		$	(63	)	$	673		$	65		$	738
June 30, 2007
Gross premiums written	$	2,589		$	1,621		$	335		$	—		$	4,545		$	92		$	4,637
Net premiums written		1,497			1,166			332			—			2,995			87			3,082
Net premiums earned		1,455			1,141			325			—			2,921			87			3,008
Losses and loss expenses		1,016			614			163			—			1,793			—			1,793
Future policy benefits		—			—			—			—			—			33			33
Policy acquisition costs		128			230			64			—			422			12			434
Administrative expenses		130			162			16			36			344			12			356
Underwriting income (loss)		181			135			82			(36	)		362			30			392
Net investment income		257			111			66			23			457			14			471
Net realized gains (losses)		15			(27	)		(7	)		9			(10	)		(1	)		(11	)
Interest expense		—			—			—			42			42			—			42
Other income (expense)		(1	)		(1	)		(2	)		8			4			—			4
Income tax expense (benefit)		115			58			7			(16	)		164			1			165
Net income (loss)		337			160			132			(22	)		607			42			649
Net realized gains (losses)		15			(27	)		(7	)		9			(10	)		(1	)		(11	)
Tax expense (benefit) on net realized gains (losses)		8			(4	)		—			—			4			—			4
Income (loss) excluding net realized gains (losses) (1)	$	330		$	183		$	139		$	(31	)	$	621		$	43		$	664

(1) See page 21 Non-GAAP Financial Measures.

Segment 2008 Qtr Page 5

ACE Limited Consolidating Statement of Operations Six months ended June 30, 2008 and 2007 (in millions of U.S. dollars) (Unaudited)

	Insurance - North American			Insurance - Overseas General			Global Reinsurance			Corporate & Other			Consolidated Excluding Life Segment			Life Insurance & Reinsurance			ACE Consolidated
June 30, 2008
Gross premiums written	$	4,899		$	3,654		$	617		$	—		$	9,170		$	532		$	9,702
Net premiums written		2,871			2,788			614			—			6,273			479			6,752
Net premiums earned		2,719			2,662			520			—			5,901			467			6,368
Losses and loss expenses		1,831			1,308			225			—			3,364			110			3,474
Future policy benefits		—			5			—			—			5			147			152
Policy acquisition costs		290			568			108			—			966			71			1,037
Administrative expenses		266			381			29			78			754			82			836
Underwriting income (loss)		332			400			158			(78	)		812			57			869
Net investment income		551			251			152			12			966			55			1,021
Net realized gains (losses)		(166	)		(141	)		(65	)		15			(357	)		(122	)		(479	)
Interest expense		—			—			—			108			108			—			108
Other income (expense)		(3	)		20			(1	)		98			114			(4	)		110
Income tax expense (benefit)		229			85			15			(49	)		280			10			290
Net income (loss)		485			445			229			(12	)		1,147			(24	)		1,123
Net realized gains (losses)		(166	)		(141	)		(65	)		15			(357	)		(122	)		(479	)
Net realized gains (losses) in other income (expense)		—			22			—			70			92			—			92
Tax expense (benefit) on net realized gains (losses)		(15	)		(29	)		(2	)		(1	)		(47	)		—			(47	)
Income (loss) excluding net realized gains (losses) (1)	$	636		$	535		$	292		$	(98	)	$	1,365		$	98		$	1,463
June 30, 2007
Gross premiums written	$	4,858		$	3,280		$	813		$	—		$	8,951		$	182		$	9,133
Net premiums written		3,011			2,358			808			—			6,177			175			6,352
Net premiums earned		2,994			2,253			668			—			5,915			175			6,090
Losses and loss expenses		2,127			1,178			348			—			3,653			—			3,653
Future policy benefits		—			—			—			—			—			69			69
Policy acquisition costs		244			454			130			—			828			23			851
Administrative expenses		263			324			33			68			688			24			712
Underwriting income (loss)		360			297			157			(68	)		746			59			805
Net investment income		498			215			132			51			896			26			922
Net realized gains (losses)		52			(53	)		(1	)		12			10			(5	)		5
Interest expense		—			—			—			88			88			—			88
Other income (expense)		(10	)		(4	)		(3	)		17			—			—			—
Income tax expense (benefit)		243			98			14			(60	)		295			(1	)		294
Net income (loss)		657			357			271			(16	)		1,269			81			1,350
Net realized gains (losses)		52			(53	)		(1	)		12			10			(5	)		5
Tax expense (benefit) on net realized gains (losses)		23			(12	)		(1	)		(28	)		(18	)		—			(18	)
Income (loss) excluding net realized gains (losses) (1)	$	628		$	398		$	271		$	(56	)	$	1,241		$	86		$	1,327

(1) See page 21 Non-GAAP Financial Measures.

Segment 2008 YTD Page 6

ACE Limited Segment Results - Consecutive Quarters (in millions of U.S. dollars) (Unaudited)

Insurance - North American

	2Q-08			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Gross premiums written	$	2,718		$	2,181		$	2,274		$	2,708		$	2,589		$	4,899		$	4,858		$	9,840
Net premiums written		1,511			1,360			1,373			1,449			1,497			2,871			3,011			5,833
Net premiums earned		1,365			1,354			1,418			1,595			1,455			2,719			2,994			6,007
Losses and loss expenses		962			869			1,004			1,138			1,016			1,831			2,127			4,269
Policy acquisition costs		129			161			121			150			128			290			244			515
Administrative expenses		131			135			138			129			130			266			263			530
Underwriting income		143			189			155			178			181			332			360			693
Net investment income		282			269			276			260			257			551			498			1,034
Net realized gains (losses)		(105	)		(61	)		44			29			15			(166	)		52			125
Other income (expense)		(3	)		—			—			(1	)		(1	)		(3	)		(10	)		(11	)
Income tax expense (benefit)		106			123			100			125			115			229			243			468
Net income		211			274			375			341			337			485			657			1,373
Net realized gains (losses)		(105	)		(61	)		44			29			15			(166	)		52			125
Tax expense (benefit) on net realized gains (losses)		(7	)		(8	)		(2	)		—			8			(15	)		23			21
Income excluding net realized gains (losses) (1)	$	309		$	327		$	329		$	312		$	330		$	636		$	628		$	1,269
Combined ratio
Loss and loss expense ratio		70.5	%		64.1	%		70.8	%		71.3	%		69.8	%		67.3	%		71.1	%		71.1	%
Policy acquisition cost ratio		9.5	%		11.9	%		8.6	%		9.4	%		8.8	%		10.7	%		8.1	%		8.6	%
Administrative expense ratio		9.5	%		10.0	%		9.7	%		8.1	%		8.9	%		9.8	%		8.8	%		8.8	%
Combined ratio		89.5	%		86.0	%		89.1	%		88.8	%		87.5	%		87.8	%		88.0	%		88.5	%
Large losses and other items (before tax)
Catastrophe losses (before tax)	$	22		$	15		$	—		$	—		$	16		$	37		$	16		$	16
Prior period development - unfavorable (favorable) (2)	$	(23	)	$	(79	)	$	1		$	4		$	(6	)	$	(102	)	$	4		$	9
Loss and loss expense ratio excluding catastophe losses and prior period development		70.6	%		72.1	%		70.8	%		71.0	%		69.1	%		71.4	%		70.4	%		70.6	%
% Change versus prior year period
Net premiums written		1	%		-10	%		-7	%		-1	%		0	%		-5	%		0	%		-2	%
Net premiums earned		-6	%		-12	%		-4	%		3	%		6	%		-9	%		11	%		5	%
Other ratios
Net premiums written/gross premiums written		56	%		62	%		60	%		54	%		58	%		59	%		62	%		59	%

(1) See page 21 Non-GAAP Financial Measures.

(2) For quarter 1 2008 prior period favorable development of $123 million less $44 million of profit share commission on Crop business settlement.

Insurance - North American Page 7

ACE Limited Segment Results - Consecutive Quarters (in millions of U.S. dollars) (Unaudited)

Insurance - Overseas General

	2Q-08 (2)			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Gross premiums written	$	1,876		$	1,778		$	1,584		$	1,427		$	1,621		$	3,654		$	3,280		$	6,291
Net premiums written		1,443			1,345			1,169			1,041			1,166			2,788			2,358			4,568
Net premiums earned		1,439			1,223			1,229			1,141			1,141			2,662			2,253			4,623
Losses and loss expenses		715			593			631			611			614			1,308			1,178			2,420
Future policy benefits		5			—			—			—			—			5			—			—
Policy acquisition costs		323			245			269			240			230			568			454			963
Administrative expenses		208			173			175			170			162			381			324			669
Underwriting income		188			212			154			120			135			400			297			571
Net investment income		134			117			119			116			111			251			215			450
Net realized gains (losses)		(58	)		(83	)		(11	)		(5	)		(27	)		(141	)		(53	)		(69	)
Other income (expense)		17			3			12			12			(1	)		20			(4	)		20
Income tax expense (benefit)		38			47			59			26			58			85			98			183
Net income		243			202			215			217			160			445			357			789
Net realized gains (losses)		(58	)		(83	)		(11	)		(5	)		(27	)		(141	)		(53	)		(69	)
Net realized gains (losses) in other income (expense)		15			7			15			11			—			22			—			26
Tax expense (benefit) on net realized gains (losses)		(7	)		(22	)		(1	)		(1	)		(4	)		(29	)		(12	)		(14	)
Income excluding net realized gains (losses) (1)	$	279		$	256		$	210		$	210		$	183		$	535		$	398		$	818
Combined ratio
Loss and loss expense ratio		50.0	%		48.5	%		51.4	%		53.6	%		53.9	%		49.3	%		52.3	%		52.4	%
Policy acquisition cost ratio		22.4	%		20.0	%		21.8	%		21.1	%		20.1	%		21.3	%		20.1	%		20.8	%
Administrative expense ratio		14.5	%		14.2	%		14.3	%		14.8	%		14.2	%		14.3	%		14.4	%		14.5	%
Combined ratio		86.9	%		82.7	%		87.5	%		89.5	%		88.2	%		84.9	%		86.8	%		87.7	%
Large losses and other items
Catastrophe losses (before tax)	$	25		$	15		$	13		$	8		$	58		$	40		$	73		$	94
Prior period development - unfavorable (favorable)	$	(54	)	$	(44	)	$	(76	)	$	(64	)	$	(31	)	$	(98	)	$	(52	)	$	(192	)
Loss and loss expense ratio excluding catastophe losses and prior period development		52.0	%		50.9	%		56.5	%		58.5	%		51.2	%		51.5	%		51.2	%		54.4	%
% Change versus prior year period
Net premiums written		24	%		13	%		10	%		6	%		8	%		18	%		6	%		7	%
Net premiums earned		26	%		10	%		12	%		4	%		5	%		18	%		6	%		7	%
Other ratios
Net premiums written/gross premiums written		77	%		76	%		74	%		73	%		72	%		76	%		72	%		73	%

(1) See page 21 Non-GAAP Financial Measures.

(2) Includes the International operations of Combined Insurance.

Insurance - Overseas General Page 8

ACE Limited Segment Results - Consecutive Quarters (in millions of U.S. dollars) (Unaudited)

Global Reinsurance

	2Q-08			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Gross premiums written	$	272		$	345		$	177		$	228		$	335		$	617		$	813		$	1,218
Net premiums written		270			344			174			215			332			614			808			1,197
Net premiums earned		257			263			312			319			325			520			668			1,299
Losses and loss expenses		108			117			155			161			163			225			348			664
Policy acquisition costs		54			54			58			60			64			108			130			248
Administrative expenses		14			15			17			14			16			29			33			64
Underwriting income		81			77			82			84			82			158			157			323
Net investment income		79			73			73			69			66			152			132			274
Net realized gains (losses)		(20	)		(45	)		(3	)		25			(7	)		(65	)		(1	)		21
Other income (expense)		(1	)		—			(1	)		—			(2	)		(1	)		(3	)		(4	)
Income tax expense (benefit)		11			4			7			11			7			15			14			32
Net income		128			101			144			167			132			229			271			582
Net realized gains (losses)		(20	)		(45	)		(3	)		25			(7	)		(65	)		(1	)		21
Tax expense (benefit) on net realized gains (losses)		—			(2	)		(1	)		—			—			(2	)		(1	)		(2	)
Income excluding net realized gains (losses) (1)	$	148		$	144		$	146		$	142		$	139		$	292		$	271		$	559
Combined ratio
Loss and loss expense ratio		42.1	%		44.5	%		49.8	%		50.6	%		50.1	%		43.3	%		52.0	%		51.1	%
Policy acquisition cost ratio		21.0	%		20.6	%		18.3	%		18.8	%		19.9	%		20.8	%		19.5	%		19.1	%
Administrative expense ratio		5.5	%		5.7	%		5.5	%		4.2	%		5.0	%		5.6	%		5.0	%		4.9	%
Combined ratio		68.6	%		70.8	%		73.6	%		73.6	%		75.0	%		69.7	%		76.5	%		75.1	%
Large losses and other items
Catastrophe losses (before tax)	$	11		$	1		$	10		$	13		$	7		$	12		$	26		$	49
Prior period development - unfavorable (favorable)	$	(27	)	$	(14	)	$	(14	)	$	(10	)	$	(3	)	$	(41	)	$	(10	)	$	(34	)
Loss and loss expense ratio excluding catastophe losses and prior period development		48.2	%		49.5	%		51.2	%		49.6	%		49.0	%		48.9	%		49.9	%		50.0	%
% Change versus prior year period
Net premiums written		-19	%		-28	%		-31	%		-24	%		-20	%		-24	%		-20	%		-23	%
Net premiums earned		-21	%		-23	%		-18	%		-14	%		-16	%		-22	%		-12	%		-14	%
Other ratios
Net premiums written/gross premiums written		99	%		100	%		98	%		94	%		99	%		100	%		99	%		98	%

(1) See page 21 Non-GAAP Financial Measures.

Global Reinsurance Page 9

ACE Limited Segment Results - Consecutive Quarters (in millions of U.S. dollars) (Unaudited)

Life Insurance and Reinsurance

	2Q-08 (4)			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Gross premiums written (1)	$	427		$	105		$	109		$	100		$	92		$	532		$	182		$	391
Net premiums written		374			105			111			95			87			479			175			381
Net premiums earned		367			100			98			95			87			467			175			368
Losses and loss expenses		110			—			—			—			—			110			—			—
Future policy benefits		84			63			60			39			33			147			69			168
Policy acquisition costs		63			8			9			13			12			71			23			45
Administrative expenses		69			13			13			13			12			82			24			50
Net investment income		40			15			15			14			14			55			26			55
Life underwriting income (2)		81			31			31			44			44			112			85			160
Net realized gains (losses)		64			(186	)		(108	)		(51	)		(1	)		(122	)		(5	)		(164	)
Other income (expense)		(4	)		—			(1	)		—			—			(4	)		—			(1	)
Income tax expense (benefit)		12			(2	)		(4	)		(3	)		1			10			(1	)		(8	)
Net income (loss)		129			(153	)		(74	)		(4	)		42			(24	)		81			3
Net realized gains (losses)		64			(186	)		(108	)		(51	)		(1	)		(122	)		(5	)		(164	)
Net realized gains (losses) in other income (expense)		—			—			1			—			—			—			—			1
Income excluding net realized gains (losses) (3)	$	65		$	33		$	33		$	47		$	43		$	98		$	86		$	166
% Change versus prior year period
Net premiums written		330	%		19	%		42	%		38	%		32	%		174	%		38	%		39	%
Net premiums earned		322	%		14	%		26	%		38	%		32	%		167	%		38	%		34	%

(1) Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from premium revenue. For the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, premiums or deposits collected on investment and universal life contracts that are excluded from premium revenue above aggregated $30.9 million, $41.2 million, $27.2 million, $17.4 million and $10.6 million, respectively. Prior to Q2-07, premiums collected on such contracts were inconsequential.

(2) We assess the performance of our Life Insurance and Reinsurance business based on life underwriting income which includes net investment income.

(3) See page 21 Non-GAAP Financial Measures.

(4) Includes the North America operations of Combined Insurance.

Life Page 10

ACE Limited Loss Reserve Rollforward (in millions of U.S. dollars) (Unaudited)

	Total									Ongoing									Run-off (1)
	Unpaid Losses									Unpaid Losses									Unpaid Losses
	Gross			Ceded			Net			Gross			Ceded			Net			Gross			Ceded			Net
Balance at December 31, 2006	$	35,517		$	13,509		$	22,008		$	28,989		$	8,977		$	20,012		$	6,528		$	4,532		$	1,996
Losses and loss expenses incurred		2,703			843			1,860			2,690			832			1,858			13			11			2
Losses and loss expenses paid		(2,363	)		(943	)		(1,420	)		(2,206	)		(797	)		(1,409	)		(157	)		(146	)		(11	)
Other (incl. foreign exch. revaluation)		(44	)		4			(48	)		(44	)		4			(48	)		—			—			—
Balance at March 31, 2007		35,813			13,413			22,400			29,429			9,016			20,413			6,384			4,397			1,987
Losses and loss expenses incurred		2,280			487			1,793			2,249			473			1,776			31			14			17
Losses and loss expenses paid		(2,111	)		(758	)		(1,353	)		(1,977	)		(637	)		(1,340	)		(134	)		(121	)		(13	)
Other (incl. foreign exch. revaluation)		141			34			107			140			34			106			1			—			1
Balance at June 30, 2007		36,123			13,176			22,947			29,841			8,886			20,955			6,282			4,290			1,992
Losses and loss expenses incurred		3,010			1,100			1,910			2,999			1,093			1,906			11			7			4
Losses and loss expenses paid		(2,429	)		(948	)		(1,481	)		(2,269	)		(833	)		(1,436	)		(160	)		(115	)		(45	)
Other (incl. foreign exch. revaluation)		164			58			106			164			58			106			—			—			—
Balance at September 30, 2007		36,868			13,386			23,482			30,735			9,204			21,531			6,133			4,182			1,951
Losses and loss expenses incurred		2,838			1,050			1,788			2,815			1,057			1,758			23			(7	)		30
Losses and loss expenses paid		(2,613	)		(933	)		(1,680	)		(2,400	)		(806	)		(1,594	)		(213	)		(127	)		(86	)
Other (incl. foreign exch. revaluation)		19			17			2			19			17			2			—			—			—
Balance at December 31, 2007		37,112			13,520			23,592			31,169			9,472			21,697			5,943			4,048			1,895
Losses and loss expenses incurred		1,659			80			1,579			1,670			87			1,583			(11	)		(7	)		(4	)
Losses and loss expenses paid		(1,748	)		(601	)		(1,147	)		(1,554	)		(406	)		(1,148	)		(194	)		(195	)		1
Other (incl. foreign exch. revaluation)		159			71			88			159			71			88			—			—			—
Balance at March 31, 2008	$	37,182		$	13,070		$	24,112		$	31,444		$	9,224		$	22,220		$	5,738		$	3,846		$	1,892
Losses and loss expenses incurred		2,736			841			1,895			2,727			837			1,890			9			4			5
Losses and loss expenses paid		(2,620	)		(1,024	)		(1,596	)		(2,391	)		(801	)		(1,590	)		(229	)		(223	)		(6	)
Other (incl. foreign exch. revaluation)		12			12			—			11			12			(1	)		1			—			1
Losses and loss expenses acquired(2)		386			33			353			386			33			353			—			—			—
Balance at June 30, 2008	$	37,696		$	12,932		$	24,764		$	32,177		$	9,305		$	22,872		$	5,519		$	3,627		$	1,892
Add net recoverable on paid losses					907
Reinsurance recoverable				$	13,839

(1) The run-off reserves primarily include the Brandywine group, the Commercial Insurance Service - Middle Market Workers’ Comp. reserves and the pre-1997 Westchester Specialty reserves.

(2) Combined Insurance.

Loss Reserve Rollforward Page 11

ACE Limited Reinsurance Recoverable Analysis (in millions of U.S. dollars) (Unaudited)

Net Reinsurance Recoverable by Division

	June 30 2008			March 31 2008			December 31 2007
Reinsurance recoverable on paid losses and loss expenses
Active operations	$	706		$	686		$	697
Brandywine		327			342			305
Westchester Run-off		37			34			36
Other Run-off		15			9			12
Total	$	1,085		$	1,071		$	1,050
Reinsurance recoverable on unpaid losses and loss expenses and benefits
Active operations	$	9,810		$	9,778		$	10,024
Brandywine		2,844			3,004			3,161
Westchester Run-off		615			627			653
Other Run-off		149			169			160
Total	$	13,418		$	13,578		$	13,998
Gross reinsurance recoverable
Active operations	$	10,516		$	10,464		$	10,721
Brandywine		3,171			3,346			3,466
Westchester Run-off		652			661			689
Other Run-off		164			178			172
Total	$	14,503		$	14,649		$	15,048
Provision for uncollectible reinsurance
Active operations	$	(432	)	$	(444	)	$	(435	)
Brandywine		(185	)		(189	)		(197	)
Westchester Run-off		(31	)		(31	)		(31	)
Other Run-off		(16	)		(16	)		(23	)
Total	$	(664	)	$	(680	)	$	(686	)
Net reinsurance recoverable
Active operations	$	10,084		$	10,020		$	10,286
Brandywine		2,986			3,157			3,269
Westchester Run-off		621			630			658
Other Run-off		148			162			149
Total	$	13,839		$	13,969		$	14,362

Reinsurance Recoverable Page 12

ACE Limited Reinsurance Recoverable Analysis (in millions of U.S. dollars) (Unaudited)

Consolidated Reinsurance Recoverable

	March 31, 2008
	Recoverable		Provision (5)		% Of Gross
Categories
Largest Reinsurers (1)	$	8,479	$	117	1.4	%
Other reinsurers balances rated A- or better		2,083		66	3.2	%
Other reinsurers balances with rating lower than A- or not rated		943		173	18.3	%
Other Pools and Government Agencies		156		10	6.4	%
Structured Settlements		551		16	2.9	%
Other Captives		1,531		19	1.2	%
Others (2)		906		279	30.8	%
Total	$	14,649	$	680	4.6	%

At March 31, 2008, $10.2 billion of ACE Limited recoverables were from rated reinsurers, of which 95.2% were rated the equivalent of A- or better by internationally recognized rating agencies.

Largest Reinsurers (3)	S&P Rating (4)	AM Best Rating (4)
American International Group (AIG)	AA-	A+
Berkshire Hathaway Insurance Group	AAA	A++
Chubb Insurance Group	AA	A++
Equitas	NR	NR
Everest Re Group	AA-	A+
HDI Haftpflichtverband Der Deutschen Industrie Vag (Hannover)	AA-	A
Lloyd’s Of London	A+	A
Munich Re Group	AA-	A+
Partner Re	AA-	A+
Swiss Re Group	AA-	A+
WR Berkley Corp	A+	A+
XL Capital Group	A+	A

(1) The largest reinsurers includes all reinsurers where gross recoverable exceeds 1% of ACE Shareholders’ equity. Total ACE Shareholders’ Equity at March 31, 2008 was $16.735 billion.

(2) Other principally includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation. Our estimate of provision for uncollectible reinsurance associated with Other considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such as multi-beneficiary trusts and parental guarantees.

(3) The largest reinsurers includes all reinsurers where gross recoverable (net of collateral) exceeds 1% of ACE Shareholders’ equity.

(4) S&P and AM Best ratings based on each group’s predominant reinsurer.

(5) See MD&A reported in the 2007 Form 10-K for a discussion on how ACE determines the provision for uncollectible reinsurance.

Reinsurance Rec-Consolidated Page 13

ACE Limited Reinsurance Recoverable Analysis - 4 (in millions of U.S. dollars) (Unaudited)

Detail on Reinsurance Recoverable on Paid Losses and Loss Expenses

	General Collections (1)			Other (2)			Total
Gross balance at December 31, 2007	$	774		$	276		$	1,050
Provision at 12/31/07		43			173			216
% of gross		5.6	%		62.7	%		20.6	%
Net balance at December 31, 2007	$	731		$	103		$	834
Gross balance at March 31, 2008	$	672		$	399		$	1,071
Provision at 3/31/08		40			164			204
% of gross		5.3	%		57.4	%		19.0	%
Net balance at March 31, 2008	$	632		$	235		$	867
Gross balance at June 30, 2008	$	680		$	405		$	1,085
Provision at 6/30/08		35			143			178
% of gross		5.1	%		35.3	%		16.4	%
Net balance at June 30, 2008(3)	$	645		$	262		$	907

(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.

(2) Other includes amounts recoverable that are in dispute, or are from companies who are in supervision, rehabilitation or liquidation for Brandywine Group and active operations. Our estimation of the reserve for other, considers the merits of the underlying matter, the credit quality of the reinsurer, and whether we have received collateral or other credit protections such multi-beneficiary trusts and parental guarantees.

(3) The current quarter split between general collections and other is estimated based on prior quarter balances. Balances are adjusted to actual in the next quarter.

Reinsurance Recoverable 3 Page 14

ACE Limited Investment Portfolio (in millions of U.S. dollars) (Unaudited)

	June 30 2008					March 31 2008					December 31 2007
Market Value
Fixed maturities available for sale	$	34,870				$	32,619				$	33,184
Fixed maturities held to maturity		2,932					2,960					3,015
Short-term investments		3,137					4,795					2,631
Total	$	40,939				$	40,374				$	38,830
Asset Allocation by Market Value
Treasury	$	1,043		2	%	$	974		2	%	$	1,145		3	%
Agency		1,730		4	%		1,939		5	%		1,820		5	%
Corporate		10,080		25	%		8,906		22	%		9,015		23	%
Mortgage-backed securities		12,668		31	%		13,087		32	%		13,733		35	%
Asset-backed securities		1,040		2	%		1,060		3	%		1,150		3	%
Municipal		1,950		5	%		2,025		5	%		1,844		5	%
Non-U.S.		9,291		23	%		7,588		19	%		7,492		19	%
Short-term investments		3,137		8	%		4,795		12	%		2,631		7	%
Total	$	40,939		100	%	$	40,374		100	%	$	38,830		100	%
Credit Quality by Market Value
AAA	$	24,740		60	%	$	26,162		65	%	$	24,553		63	%
AA		4,285		10	%		3,746		9	%		3,747		10	%
A		5,572		14	%		4,620		12	%		4,590		12	%
BBB		3,463		9	%		3,188		8	%		3,297		8	%
BB		1,390		3	%		1,249		3	%		1,073		3	%
B		1,416		4	%		1,341		3	%		1,481		4	%
Other		73		0	%		68		0	%		89		0	%
Total	$	40,939		100	%	$	40,374		100	%	$	38,830		100	%
Cost/Amortized Cost
Fixed maturities available for sale	$	35,355				$	32,615				$	32,994
Fixed maturities held to maturity		2,932					2,913					2,987
Short-term investments		3,137					4,795					2,631
Subtotal		41,424					40,323					38,612
Equity securities		1,502					1,597					1,618
Other investments		1,182					992					880
Total	$	44,108				$	42,912				$	41,110
Avg. duration of fixed maturities		3.7 years					3.5 years					3.5 years
Avg. market yield of fixed maturities		5.6	%				5.1	%				5.3	%
Avg. credit quality		AA					AA					AA

Investments Page 15

ACE Limited Investment Portfolio - 2 (in millions of U.S. dollars) (Unaudited)

Mortgage-backed and Asset-backed Fixed Income Portfolio

Market Value at June 30, 2008

	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Mortgage-backed securities
Residential mortgage-backed (RMBS)
GNMA	$	377	$	—	$	—	$	—	$	—	$	377
FNMA		5,066		—		—		—		—		5,066
Freddie Mac		2,035		—		—		—		—		2,035
Total agency RMBS		7,478		—		—		—		—		7,478
Non-agency RMBS		2,712		9		1		10		—		2,732
Total residential mortgage-backed		10,190		9		1		10		—		10,210
Commercial mortgage-backed		2,440		4		10		4		—		2,458
Total mortgage-backed securities	$	12,630	$	13	$	11	$	14	$	—	$	12,668
Asset-backed securities
Sub-prime	$	103	$	6	$	5	$	—	$	—	$	114
Credit cards		62		—		16		8		—		86
Autos		537		31		8		6		—		582
Other		252		1		4		—		1		258
Total asset-backed securities	$	954	$	38	$	33	$	14	$	1	$	1,040

1) Insured municipal bonds represent $909 million, or 47% of our municipal bond holdings.

2) Insured asset-backed securities represent $166 million, or 16% of our asset-backed security holdings.

Investments 2 Page 16

ACE Limited Investment Portfolio - 3 (in millions of U.S. dollars) (Unaudited)

Mortgage-backed and Asset-backed Fixed Income Portfolio

Book Value at June 30, 2008

	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Mortgage-backed securities
Residential mortgage-backed (RMBS)
GNMA	$	376	$	—	$	—	$	—	$	—	$	376
FNMA		5,054		—		—		—		—		5,054
Freddie Mac		2,020		—		—		—		—		2,020
Total agency RMBS		7,450		—		—		—		—		7,450
Non-agency RMBS		2,881		10		1		10		—		2,902
Total residential mortgage-backed		10,331		10		1		10		—		10,352
Commercial mortgage-backed		2,475		4		10		3		—		2,492
Total mortgage-backed securities	$	12,806	$	14	$	11	$	13	$	—	$	12,844
Asset-backed securities
Sub-prime	$	109	$	6	$	5	$	—	$	—	$	120
Credit cards		61		—		16		8		—		85
Autos		534		32		8		6		—		580
Other		253		1		5		1		1		261
Total asset-backed securities	$	957	$	39	$	34	$	15	$	1	$	1,046

1) Insured municipal bonds represent $906 million, or 47% of our municipal bond holdings.

2) Insured asset-backed securities represent $168 million, or 16% of our asset-backed security holdings.

Investments 3 Page 17

ACE Limited Net Realized and Unrealized Gains (Losses) (in millions of U.S. dollars) (Unaudited)

	Three months ended June 30, 2008									Six months ended June 30, 2008
	Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) (1)			Net Unrealized Gains (Losses)			Net Impact
Fixed maturities	$	(198	)	$	(469	)	$	(667	)	$	(303	)	$	(653	)	$	(956	)
Equity securities		13			(75	)		(62	)		(41	)		(231	)		(272	)
Equity and fixed income derivatives		(16	)		—			(16	)		(25	)		—			(25	)
Foreign exchange gains (losses)		12			—			12			18			—			18
Other		3			(11	)		(8	)		(23	)		(16	)		(39	)
Sub-total		(186	)		(555	)		(741	)		(374	)		(900	)		(1,274	)
Unrealized losses from derivative transactions (2)		60			—			60			(105	)		—			(105	)
Total gains (losses)		(126	)		(555	)		(681	)		(479	)		(900	)		(1,379	)
Partially-owned insurance companies (3)		120			(7	)		113			92			14			106
Income tax expense (benefit)		(14	)		(30	)		(44	)		(47	)		(52	)		(99	)
Net gains (losses)	$	8		$	(532	)	$	(524	)	$	(340	)	$	(834	)	$	(1,174	)

(1) The quarter includes impairments of $171M for fixed maturities, $39M for equities and $nil for other investments. Year to date includes impairments of $299M for fixed maturities, $75M for equities and $25M for other investments.

(2) Includes $65M of unrealized gains and $118M of unrealized losses primarily on the guaranteed minimum income benefit derivatives from our life reinsurance operations for the quarter and year to date, respectively.

(3) Net realized and unrealized gains (losses) on partially-owned insurance companies that meet the requirements for equity accounting. The net income or loss is included in other income (expense).

	Three months ended June 30, 2007									Six months ended June 30, 2007
	Net Realized Gains (Losses) (4)			Net Unrealized Gains (Losses)			Net Impact			Net Realized Gains (Losses) (4)			Net Unrealized Gains (Losses)			Net Impact
Fixed maturities	$	(63	)	$	(462	)	$	(525	)	$	(84	)	$	(405	)	$	(489	)
Equity securities		51			34			85			85			33			118
Equity and fixed income derivatives		(7	)		—			(7	)		(14	)		—			(14	)
Foreign exchange gains (losses)		1			—			1			1			—			1
Other		2			13			15			12			33			45
Total inv. portfolio gains (losses)		(16	)		(415	)		(431	)		—			(339	)		(339	)
Unrealized losses from derivative transactions		5			—			5			5			—			5
Total gains (losses)		(11	)		(415	)		(426	)		5			(339	)		(334	)
Income tax expense (benefit)		4			(33	)		(29	)		(18	)		(20	)		(38	)
Net gains (losses)	$	(15	)	$	(382	)	$	(397	)	$	23		$	(319	)	$	(296	)

(4) The quarter includes impairments of $13M for fixed maturities, $1M for equities and $2M for other investments. Year to date includes impairments of $50M for fixed maturities, $2M for equities and $2M for other investments.

Investment Gains (Losses) Page 18

ACE Limited Capital Structure (in millions of U.S. dollars) (Unaudited)

	June 30 2008			March 31 2008			December 31 2007			December 31 2006
Total short-term debt (1)	$	1,050		$	1,341		$	372		$	578
Total long-term debt		3,008			2,114			1,811			1,560
Total debt	$	4,058			3,455			2,183		$	2,138
Total trust preferred securities	$	309		$	309		$	309		$	309
Perpetual preferred shares	$	—			557		$	557		$	557
Common shareholders’ equity		16,327			16,178			16,120			13,721
Total shareholders’ equity	$	16,327		$	16,735		$	16,677		$	14,278
Total capitalization	$	20,694		$	20,499		$	19,169		$	16,725
Tangible shareholders’ equity (2)	$	12,715		$	13,856		$	13,839		$	11,439
Leverage ratios
Debt/ total capitalization		19.6	%		16.9	%		11.4	%		12.8	%
Debt plus trust preferred securities/ total capitalization		21.1	%		18.4	%		13.0	%		14.6	%
Debt/ tangible equity		31.9	%		24.9	%		15.8	%		18.7	%
Debt plus trust preferred securities/ tangible equity		34.3	%		27.2	%		18.0	%		21.4	%
Debt plus total preferred stock/ total capitalization		21.1	%		21.1	%		15.9	%		18.0	%

(1) Includes $1.0 billion and $705 million of repurchase agreements for the Combined acquisition for Q1 and Q2, respectively.

(2) Tangible equity is equal to shareholders’ equity less goodwill and other intangible assets.

Capital Structure Page 19

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
	2008			2007			2008			2007
Numerator
Income excluding net realized gains (losses) (1)	$	738		$	664		$	1,463		$	1,327
Perpetual preferred dividend		(13	)		(11	)		(24	)		(22	)
Income to common shares, excl. net realized gains (losses)		725			653			1,439			1,305
Net realized gains (losses), net of income tax		8			(15	)		(340	)		23
Net income available to the holders of common shares		733			638			1,099			1,328
Rollforward of Common Shares
Shares - beginning of period		332,506,547			328,309,225			329,704,531			326,455,468
Issued under employee stock purchase plan		110,227			—			203,455			104,162
Shares (cancelled) granted		(22,100	)		(147,432	)		1,152,580			1,247,466
Issued for option exercises		654,634			847,550			2,188,742			1,202,247
Shares - end of period		333,249,308			329,009,343			333,249,308			329,009,343
Denominator
Weighted average shares outstanding		328,627,780			324,541,868			327,889,473			324,344,779
Effect of other dilutive securities		4,569,215			5,531,343			4,383,162			5,313,233
Adj. wtd. avg. shares outstanding and assumed conversions		333,196,995			330,073,211			332,272,635			329,658,012
Basic earnings per share
Income excluding net realized gains (losses) (1)	$	2.21		$	2.01		$	4.39		$	4.02
Net realized gains (losses), net of income tax		0.02			(0.05	)		(1.04	)		0.07
Net income	$	2.23		$	1.96		$	3.35		$	4.09
Diluted earnings per share
Income excluding net realized gains (losses) (1)	$	2.18		$	1.98		$	4.33		$	3.95
Net realized gains (losses), net of income tax		0.02			(0.05	)		(1.02	)		0.07
Net income	$	2.20		$	1.93		$	3.31		$	4.02

(1) See page 21 Non-GAAP Financial Measures.

Earnings per share Page 20

ACE Limited Non-GAAP Financial Measures (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. A reconciliation of book value per share is provided on page 22.

In presenting our segment operating results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting losses and loss expenses, future policy benefits, policy acquisition costs, and administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and net realized gains (losses).

The following non-GAAP measure is a common performance measurement and is defined as income excluding net realized gains (losses) and the related tax expense (benefit). 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) and net realized gains (losses) included in other income (expense) related to partially owned insurance companies because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. Income excluding net realized gains (losses) should not be viewed as a substitute for net income determined in accordance with generally accepted accounting principles (GAAP).

	2Q-08			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Net income, as reported	$	746		$	377		$	572		$	656		$	649		$	1,123		$	1,350		$	2,578
Net realized gains (losses)		(126	)		(353	)		(66	)		—			(11	)		(479	)		5			(61	)
Net realized gains (losses) in other income (expense) (1)		120			(28	)		(57	)		(38	)		—			92			—			(95	)
Income tax expense (benefit) on net realized gains (losses)		(14	)		(33	)		(2	)		(2	)		4			(47	)		(18	)		(22	)
Income excluding net realized gains (losses)	$	738		$	725		$	693		$	692		$	664		$	1,463		$	1,327		$	2,712

(1) Realized gains (losses) on partially-owned insurance companies that meet the requirements for equity accounting. The net income or loss is included in other income (expense).

Reconciliation Non-GAAP Page 21

ACE Limited Book Value per Common Share (in millions of U.S. dollars, except share and per share data) (Unaudited)

Reconciliation of Book Value per Common Share

	June 30 2008		March 31 2008			December 31 2007
Shareholders’ equity	$	16,327	$	16,735		$	16,677
Proceeds from issuance of perpetual preferred shares		—		(557	)		(557	)
Numerator for book value per share calculation		16,327		16,178			16,120
Less: goodwill and other intangible assets		3,612		2,879			2,838
Numerator for tangible book value per share	$	12,715	$	13,299		$	13,282
Denominator		333,249,308		332,506,547			329,704,531
Book value per common share	$	48.99	$	48.65		$	48.89
Tangible book value per common share	$	38.15	$	40.00		$	40.28

Reconciliation Book Value Page 22

ACE Limited Comprehensive Income (in millions of U.S. dollars) (Unaudited)

Consolidated Statement of Comprehensive Income

	2Q-08			1Q-08			4Q-07			3Q-07			2Q-07			YTD 2008			YTD 2007			Full Year 2007
Net income	$	746		$	377		$	572		$	656		$	649		$	1,123		$	1,350		$	2,578
Net unrealized appreciation (depreciation) on investments
Unrealized appreciation (depreciation) on investments		(731	)		(497	)		133			218			(427	)		(1,228	)		(354	)		(3	)
Reclassification adjustment for net realized gains (losses) included in net income		169			173			6			6			12			342			15			27
Change in cumulative translation adjustments		6			27			12			58			19			33			35			105
Change in minimum pension liability		1			—			(1	)		(1	)		(2	)		1			(2	)		(4	)
Income tax (expense) benefit related to other comprehensive income items		27			8			(37	)		(28	)		23			35			5			(60	)
Other comprehensive income (loss)		(528	)		(289	)		113			253			(375	)		(817	)		(301	)		65
Comprehensive income	$	218		$	88		$	685		$	909		$	274		$	306		$	1,049		$	2,643

Comprehensive Income Page 23

ACE Limited Glossary

Annualized return on ordinary shareholders’ equity (ROE): Income excluding net realized gains (losses) less perpetual preferred securities divided by average common shareholders’ equity for the period. To annualize a quarterly rate multiply by four.

Book value per common share: Common shareholders’ equity divided by the shares outstanding.

Combined Insurance: Combined Insurance Company of America, aquired April 1, 2008.

Combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding life business. Calculated on a GAAP basis.

Effective tax rate: Income tax expense divided by the sum of income tax expense and income 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.

Common shareholders’ equity: Shareholders’ equity less perpetual preferred shares.

Tangible book value per common share: Common shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.

Tangible equity: Shareholders’ equity less goodwill and other intangible assets.

Total capitalization: Short-term debt, long-term debt, trust preferreds, perpetual preferred shares and shareholders’ equity.

Glossary Page 24