"Our revenue growth reflected our underwriting discipline in the face of a softening underwriting environment. Exclusive of Hurricanes Rita and Katrina, our earnings were excellent, with strong contributions from both underwriting and investment income," he continued.

ACE's property-casualty combined ratio, excluding catastrophe losses, was 86.6 for the quarter, compared with 86.5 in last year's third quarter. Including the catastrophes, the third-quarter 2005 combined ratio was 115.9, compared with 103.8 last year.

In the quarter, net investment income jumped 30 percent to $320 million.

Through nine months, net income was $792 million, or $2.63 per share, compared with $875 million, or $2.95 per share, in the same period of 2004.

The ACE third quarter report drew a fairly favorable response from one analyst.

David Small with Bear Stearns said the insurer's property-casualty underwriting income was "basically inline with our estimate" at $441 million. His firm had projected income of $437million.

The analyst said per share earnings came in below his estimate as the company posted a smaller tax benefit from third quarter catastrophes than expected with reported earnings per share at minus 70 cents versus Bear Stearns estimate of minus 64 cents.

Mr. Small finds that underlying trends in the quarter highlighted a softening environment, "similar to what we saw from Everest Re earlier in the week. However, we suspect investors will look past these softening trends and focus on potential growth opportunities."

He noted ACE's statement that it plans to move "swiftly and deliberately to take advantage of opportunities" in the marketplace.

Mr. Small commented that ACE over the past few years has performed "relatively well following major catastrophes given its balanced book, consequently investors should focus on whether the risk profile of the business is changing.