ACE Limited, Bermuda's largest property-casualty insurer, last night reported a 15 percent drop in fourth quarter profit after paying claims from Hurricane Wilma.

Net income declined to $237 million, or 70 cents a share after preferred dividends were paid, compared to $278 million, or 93 cents a share, during the same period a year ago.

ACE's net income beat analyst estimates by one cent a share, according to Bloomberg data.

ACE, which has a current market capitalisation of $17.6 billion, said Hurricane Wilma claims amounted to $251 million.

The company also saw hurricane losses from third-quarter storms Katrina, Rita and Dennis grow by $53 million.

This added up to an after-tax charge for investors of 94 cents a share.

ACE's operating income, the most common measure of insurance earnings, was $245 million in the fourth quarter, or 72 cents a share, compared with $160 million, or 52 cents a share in the same period a year earlier.

ACE, a year ago, took a fourth-quarter charge of $302 million to boost its reserves for asbestos claims, and a $31 million charge stemming from 2004 catastrophe activity.

The results were later restated, along with several other periods, in connection with an internal investigation that uncovered finite risk policies that needed to be re-accounted for under deposit accounting rules.

ACE also last night said net income in 2005 declined 11 percent.

During the year earnings exceeded $1 billion, or $3.31 a share, down from the $1.15 billion in profit recorded in 2004.

Operating income, which excludes net realised gains or losses, fell four percent to $956 million, or $3.06 a share, compared with $1 billion, or $3.34 a share in 2004.

ACE's result beat average analyst estimates of $3.05 a share in 2005 profit, Bloomberg data showed.

ACE said record 2005 hurricane activity in the US resulted in net after-tax charges of $1.05 billion, or $3.53 per share, compared with catastrophe losses of $437 million, or $1.53 a share, in 2004.

ACE's 2005 catastrophe losses came close to wiping out any underwriting profit.

The company's property-casualty units recorded a combined ratio of 99.3 percent. "While failing to meet our standards, these results are a testament to the underwriting discipline of our organisation," chief executive Evan Greenberg said in a statement.

A combined ratio under 100 percent indicates a profit was made on underwriting, an insurers' primary business.

The industry's average combined ratio was 100 percent through the first nine months of 2005, according to the Insurance Information Institute, a New York organisation that crunches data for the industry.

Figures for the full-year won't be compiled until March or later, once the insurance earnings season wraps up.

ACE is one of the earlier insurers to report earnings.Insurers also count on investment income to boost earnings.

ACE's return on equity last year was nine percent, as cash and invested assets grew by $5 billion to $32.4 billion.

ACE shares yesterday fell 21 cents in composite trading on the New York Stock Exchange to $54.75. The company's earnings report was issued after market close.