The hard market has benefited ACE by reducing competition and creating momentum on pricing that has left the insurer as one of only a few "truly global" insurers who can handle, large complicated risks, said Mr. Duperreault.

"I love the situation we are in and feel very good about 2003," he told National Underwriter.

For the fourth quarter, ending Dec. 30, 2002, the carrier reported a net income loss of $168 million compared to net income of $46 million for 2001, a total loss of $214 million for the period. This came on a 7 percent, or $131 million, net premium written gain of $2 billion compared to $1.9 billion in 2001.

The carriers combined ratio for the period rose 10.9 points, from 108.9 percent in 2001 to 119.8 percent in 2002.

For the year, ACE reported net income increased $223 million, or 156 percent, going from a loss of $146 million in 2001 to profit of $77 million.

Net premium written rose 27 percent, or $1.7 billion, for the year to $8.1 billion compared to $6.4 billion in 2001.

ACE reported it was taking its charge on asbestos reserves in late January, citing conservative recalculation of its business, primarily the Brandywine Group, which consists primarily of business the company purchased from Cigna Corp. three years ago.

Mr. Duperreault said he was very confident about the numbers, which amount to total asbestos reserves of $2.2 billion, and added he felt "the situation has been addressed."

ACE is only one in a long line of insurers who have increased their asbestos reserves this year. The latest was San Antonio, Texas-based Argonaut, which announced earlier this week it may have to increase its reserves after adding $7 million in the third quarter, affecting its earnings report for the fourth quarter.

Mr. Duperreault was very upbeat about the future of the company's casualty line, saying ACE, after years of defensive positioning during the soft market in the 90's, would now "play offense" and improve its pricing in 2003 and into 2004.

"We believe we have the capital resources to support our business plan for 2003 and growth for the foreseeable future," he noted during an investor's conference call.

The markets seemed to agree, as ACE's stock rose 61 cents a share by mid-day Thursday, to $28.36 a share.