Ace Ltd last night posted a first-quarter profit of close to $1 billion, far exceeding Wall Street’s expectations.The profit was almost four times what the company had earned in the same period last year, as book value rose five percent and shareholders’ equity passed the $25 billion mark.Net income for the first three months of the year was $973 million, up 289 percent from last year’s first-quarter earnings of $250 million.Earnings per share of $2.05 trounced the $1.87 expectation of analysts.Chairman and CEO Evan Greenberg said the company, like others in the industry, had benefited from a quiet period for catastrophe activity relative to last year’s first quarter. Total pre-tax catastrophe losses including reinstatement premiums were $19 million, compared with $489 million in 2011.Ace raised its forecast for full-year operating earnings to $7.03 to $7.43 per share, from a range of $6.65 to $7.05. This factors in estimated catastrophe losses of $325 million after tax for the remainder of 2012.Mr Greenberg described Ace’s underwriting results as “simply excellent”. The company’s combined ratio, reflecting the proportion of premium dollars spent on claims and expenses, was 89.2 percent, compared with 105.2 percent in the first quarter of 2011.The CEO said Ace had also benefited from a broad-based rise in insurance pricing.“Ace had a good first quarter and strong start to the year,” Mr Greenberg said. “After-tax operating income topped $700 million and our operating ROE surpassed 12 percent. Book value grew 4.5 percent in the quarter.“Our balance sheet is in excellent shape: capital now exceeds $30 billion and shareholders’ equity exceeds $25 billion.“Our underwriting results were simply excellent as demonstrated by a property and casualty (P&C) combined ratio of 89.2 percent. We and much of the industry benefited from relatively light catastrophe losses in the quarter, particularly compared to prior year.“It’s noteworthy that our operating income excluding catastrophes was up two percent over the first quarter last year. As for revenue, total company net premiums written grew 3.7 percent in the quarter, right in line with our plans. We expect our company’s premium growth rate to accelerate as the year progresses.“Insurance rates were in line with or marginally better than our expectations. In fact, this was the strongest quarter yet for rate increases, which were more broad-based.“Rates on our US business were up 3.6 percent on average. We benefited from improved pricing in many of our property-related classes and modestly improved pricing in certain casualty classes.“As a result, our customer retention rates improved globally and we incrementally increased our new business writings. At the same time, we continued to shed lines of business, particularly US general market workers’ compensation, where pricing for some time has not met our standards for earning an underwriting profit.”Book value increased 4.5 percent during the quarter to $75.09. Annualised operating return on equity for the quarter was 12.2 percent.Gross premiums written rose by $150 million to $4.79 billion.Favourable prior period development was $93 million before tax, representing 3.2 percentage points of the combined ratio, compared with $93 million in 2011.Ace, which started out in business in Bermuda in the mid-1980s, is now based in Switzerland, but still has substantial insurance and reinsurance operations on the Island.