ACE described Huatai as China's first nationally licensed joint stock p-c insurer and the fourth largest provider of property-casualty products and services in China.

Under Chinese regulations, the ACE Group's investment in Huatai's outstanding shares will be made by three subsidiary companies: ACE INA, ACE Tempest Re and ACE US Holdings.

As part of the strategic partnership, three ACE nominees have been elected to Huatai's Board of Directors, including ACE Limited Chairman and Chief Executive Officer Brian Duperreault, ACE INA Chairman Dominic Frederico, and ACE INA Executive Vice President Peter O'Connor.

ACE said it will provide Huatai additional Chinese-speaking personnel to directly assist with senior level actuarial, financial, underwriting, and information technology development.

In addition to serving on the Huatai board, Mr. O'Connor will become a full-time senior advisor to Huatai based in Beijing. Mr. O'Connor has 39 years of international insurance experience and will report to ACE Limited Vice Chairman Evan Greenberg, who is head of ACE's international operations.

Mr. Duperreault said the business partnership with Huatai will allow ACE to offer global clients a local partner allied with the ACE Group of Insurance and Reinsurance Companies and provide ACE with nationwide access to China, "the largest and fastest growing market in the world.'

Huatai Chairman Wang Zi Mu, who has successfully guided the company since its inception, said: "This is the first example in the history of China's property insurance industry that a foreign insurer has taken such a large shareholding in a Chinese insurance company.

"I believe that Huatai will become a stronger and more diversified company because of our strategic cooperation with ACE, and we look forward to a fruitful and successful relationship."

Mr. Frederico said: "There are a number of important ways in which ACE and Huatai can leverage the complementary strengths of both businesses. ACE's extensive product range, access to global investment capability, and sophisticated underwriting will work together with Huatai's extensive, high quality customer base and seasoned local management expertise to create a strong platform for growth across all our business lines."

Huatai was formed in 1996 by 63 sponsoring shareholders, representing some of China's premier companies, and operates in a diversified product line including commercial and personal property, automobile, liability, oil and gas, marine hull and cargo, and aviation.

The company currently has branches in Beijing, Tianjin, Shanghai, Nanjing, Shenzhen, Qingdao, Dalian, and Guangzhou, and has been approved by the China Insurance Regulatory Commission to open another 18 branches and 22 sub-branches.

At Dec. 31, 2001, Huatai had total assets of approximately $600 million. For the year ended Dec. 31, 2001, Huatai had total premium income of $77 million, a 34 percent increase over the previous year.

Salomon Smith Barney served as financial advisor to ACE on the transaction.

ACE Group has operating subsidiaries in nearly 50 countries and as of March 31; ACE had total assets of U.S. $38.7 billion and total shareholders' equity of U.S. $6.2 billion.