Tags: ACE | unscathed | global | insurers

ACE Unscathed Among Global Insurers

By    |   Friday, 04 May 2012 09:30 PM

ACE (ACE) grew its business despite the recent rash of global catastrophes, coming out relatively unscathed among global insurers and garnering a parade of buy calls from the major Wall Street banks.

ACE is a Zurich-based Swiss insurance and reinsurance company that does business around the world. As of the end of March, it had total assets of $90 billion and shareholders’ equity of $25 billion.

ACE operates through several segments: insurance North American, insurance overseas general, global reinsurance, and life. “Net premiums written grew 3.7 percent and our P&C combined ratio was 89.2 percent, demonstrating strong underwriting results for the quarter,” management told investors in a recent filing.

“We benefited from relatively light catastrophe losses, particularly compared to the prior year period. We also benefited from improved pricing in many of our property-related classes and modestly improved pricing in certain casualty classes.”

The company has a market cap of $26.08 billion in a sector, insurance, where the average company size is $13.05 billion. Its trailing 12-month P/E ratio is 11.46 and its five-year projected price-to-earnings-growth (PEG) ratio is 2.00, compared to 1.75 for the sector.

Its projected earnings per share growth for the coming year is 0.26 percent, lower than the sector average at 12.87 percent.

Rising target

Analysts are bullish on ACE. Buy or outperform calls are in from Sandler O’Neill, UBS, Citgroup, Piper Jaffray, Goldman Sachs, RBC Capital Markets, Standard & Poor’s and JMP Securities. Deutsche Bank has the stock at neutral, as do the analysts at Credit Suisse.

Standard & Poor’s analysts raised their earnings per share forecast for the year to $7.53, up by 53 cents, based on recent results. They increased their target priced by $1 to $85.

“We expect top line results in coming periods to be aided by improved pricing momentum that accelerated during the quarter and that we expect will continue,” S&P wrote.

ACE next reports on July 24.

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Friday, 04 May 2012 09:30 PM
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