Bad faith is the unreasonable failure of an insurance company to honor the terms of an insurance policy and deal with a policyholder in good faith. Insurance companies who are found to have acted in bad faith can be liable for punitive damages in addition to contract damages. Some states have bad faith statutes called "Unfair Insurance Claims Practices Acts."
ACE Sees Profits Rise in Third Quarter
The Zurich-based insurance giant said that net income for the business period that ended Sept. 30 stood at $2.66US per share. That compares to $1.86 for the year-ago period. On the operating income level, ACE said per share income was $2.49, compared to $2.01.
Evan Greenberg, chairman and chief executive officer of ACE, characterized third quarter operations as a record. He said they were driven by strong underwriting results and double-digit constant-dollar global property and casualty premium income growth.
Results were further helped along by a relatively calm period, claims-wise.
“We benefitted from a relatively benign quarter for catastrophes,” said Greenberg. “More fundamentally, we experienced margin improvement in both North America - as a result of better pricing and mix of business - and internationally as a result of product and geographic mix.”
Greenberg further said that global P&C net premiums written - exclusive of agriculture policies - grew 9 percent in the quarter and 10.5 percent on a constant-dollar basis. More broadly, the company said that it experienced growth in all territories it serves and in all lines, which includes commercial P&C, accident and health, personal lines and life insurance.
For the first three quarters of 2013, ACE said net income was $8.02 per share, compared with $5.67 in 2012. For operating income, year-to-date profits were reported at $6.95 per share, versus $6.23 in 2012.
With its earnings release, ACE said it was updating its July guidance for 2013 earnings to account for a positive prior period reserve development, lower-than-expected catastrophe losses and better current year accident results. It estimated that after tax operating earnings will total $8.65 to $8.90 per share.
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