third quarter, when compared with the same period last year.

And chairman, president and CEO Brian Duperreault said in a letter to shareholders, "The company has grown by strategic acquisitions and timely new ventures in our major markets, namely Lloyd's, North America and Bermuda.'' He said the company was reporting excellent financial results as it continues to grow business during the prevailing difficult market conditions.

Mr. Duperreault pointed out, "Importantly, as each of our (business) additions has been strategic in nature with accretive management, we have built a strong platform for future international growth.

"We believe our strategy for growth and diversification, combined with disciplined underwriting and selective use of reinsurance as a capital management and risk management tool, is a winning formula.

"We will continue to seek further opportunities to develop the business and enhance our position in the global market to the benefit of our policyholders, shareholders and employees.'' Four new divisions -- warranty, E&O, D&O and a captive management reinsurance facility -- were added at ACE USA, and Standard & Poor's has upgraded its A- rating to A in recognition of its improved financial fundamentals.

ACE USA has taken a majority stake in Creditor Resources Canada Ltd., the largest independent marketer of automotive service contracts in Canada, and a natural complement to the recently established warranty division.

At ACE UK, the acquisition has been completed of Tarquin Ltd., the UK-based holding company which owns Lloyd's managing agency Charman Underwriting Agencies Ltd. and Tarquin Underwriting Ltd., its corporate capital provider.

Their results will be incorporated in the next quarter.

ACE UK has also launched ACE Underwriting Services, a Lloyd's service company that will offer a range of commercial products to small-to-medium sized enterprises in the UK. For the third quarter to June 30, ACE Ltd.'s net income increased nearly 32 percent over the year before to $171,463,000. Net income for the first nine months has soared nearly 60 percent to $520,484,000.

And in the continuing soft market, gross premiums written increased nearly 67 percent to $372,465,000 for the quarter and more than 40 percent for the nine month period to $785,567,000.

For the nine months, net premiums written had risen from $494.7 million to $604.8 million, and net premiums earned had risen from $486.7 million to $565.7 million.

For the three quarters, net investment income had also risen from $177.4 million to $219.7 million.

Losses and loss expenses for the quarter were $134.3 million and were $359.7 million for the nine months.

Mr. Duperreault said, "Our premium production increase reflects the inclusion of CAT Ltd. (the Bermuda-based property catastrophe reinsurer we acquired April 1, 1998), ACE USA, excellent contributions from the financial lines division and our increased participation in our Lloyd's syndicates under management.'' Quarterly income, excluding net realised gains, was $103 million or 57 cents per share, up from $84 million or 50 cents per share, an increase in per share earnings of 14 percent, excluding net realised gains. Net income per share for the quarter rose from 77 cents to 95 cents.

LIFE OF BRIAN -- "The company has grown by strategic acquisitions and timely new ventures,'' said ACE chief Brian Duperreault.