has received a strong vote of confidence from A.M. Best Co. rating agency.

The London operations, which are currently being consolidated into a single operating entity, benefit from ACE Ltd.'s strength as a major insurance group with a global presence.

"A.M. Best believes that ACE Global Markets total managed capacity enables it to offer larger underwriting limits and a wider range of speciality insurance products to clients that are not available from the majority of its Lloyd's peers,'' A.M. Best stated.

The analysis on part of ACE's operations is part of A.M. Best's managing agent profiles which does not assess the syndicate's security, as being a part of Lloyd's makes policyholder security equal for all syndicates.

ACE's syndicates contribute about 35 percent to the group's gross premiums for the year ended 30 September 1998. ACE is contributing 69 percent of the capital supporting the managed syndicates in 1999.

During 1998 ACE managed 942 million of capacity through 11 syndicates. The number has decreased to three syndicates this year for a total capacity of 634.9 million.

The amount represents one of the largest agency groups under single operational management and makes up 6.4 percent of Lloyds 1999 total capacity.

The group is currently made up of ACE London Underwriting Ltd., ACE London Aviation Ltd., ACE Underwriting Agencies Ltd., and ACE UK Underwriting Ltd.

"In an extremely competitive market, ACE Global Markets' managed syndicates have collectively produced marginally higher profits than their Lloyd's peers in the last five closed underwriting years of 1991 to 1995,'' A.M. Best reported.

Offsetting the positive factors is management's need to devote a significant amount of time to consolidating operations into one entity by next year.

"A.M. Best understands that ACE Global Markets has been budgeting for significant cost savings as a result of the reorganisation,'' the agency stated. "The reduction in gross capacity will itself result in an annual saving of GBP 12 million.'' The agency noted that a number of senior personnel have left the company as a result of the changes.

"However, the re-engineered business is now proving to be such an attractive organisation that a number of high-calibre employees have recently joined or will be joining the company shortly,'' A.M. Best stated.

ACE will also need to ensure that each of its operations in Bermuda, the US, the UK and Dublin communicate effectively as a group to ensure the company is not overly exposed or competing in any particular line of business.