earned gains generated by new lines of business, the insurer said yesterday.

For the three months ended December 31, ACE's profit was $125.7 million, or $2.14 per share, compared to $93.5 million, or $2.02 per share.

Net premiums earned were $164.4 million compared to $116 million in the prior year's first frame.

"Despite continuing pressures in the market, ACE's overall production has increased due to growth in our newer lines of business and our recent acquisitions,'' ACE chairman, president and CEO Brian Duperreault said.

Subsidiary Tempest Reinsurance Company Ltd., acquired by ACE last year, added $34.8 million in new net premium earned.

Also new to first quarter results was business generated by ACE's Lloyd's syndicate business which added $2.3 million in new net premium earned.

And financial lines, added to the company's business two years ago, saw a substantial increase in premium earned compared to year earlier results.

Financial Lines contributed $21.6 million in net premium earned compared to $1.9 million earlier.

Net premiums earned in the company's core business, excess liability and directors and officers, fell 13 percent to $77.3 million from $88.8 million.

Satellite premium earned -- satellite business was added to the company's lines three years ago -- was $13.4 million, down from $18.2 million earlier.

For the quarter, gross premiums written rose marginally to $132.5 million from $131.5 million while net premiums written declined 14 percent to $110.6 million from $128.8 million.

As well as the growth in net premiums earned, ACE also made significant investment income gains.

For the quarter, investment income was $59.7 million compared to $47.1 million, an increase of 27 percent.

ACE also said total losses and loss expenses rose to $110.1 million from $92.9 million.

Income excluding net realised gains was $84 million compared to $48.9 million.

Realised gains were $41.7 million compared to $44.6 million.

Fully diluted net asset value per share at December 31 was $40.73 compared to $38.31 a year earlier with total shareholders' equity $2.37 billion compared to $2.24 billion.

Assets at the end of the quarter were $4.75 billion compared to $4.57 billion a year earlier.

Tempest Re's income excluding net realised gains was $31.4 million, net investment income was $9.3 million and losses were $5.2 million. The subsidiary's assets were $758.3 million compared to $781.6 million three months earlier while its shareholders' equity rose to $693 million from $663.3 million.