Ace Ltd last night reported first-quarter profits dropped 66 percent on heavy catastrophe losses.The Switzerland-based global insurer, which was founded in Bermuda 25 years ago and which maintains substantial operations on the Island, said net income was $259 million compared to $755 million in the first three months of last year.Catastrophe losses were put at $443 million, as earthquakes in Japan and New Zealand, as well as floods in Australia, generated large claims.The company adjusted its guidance for 2011 to take account of the unusually heavy catastrophe losses already sustained. Operating income is now expected to range between $5.40 and $5.70 per share for the full year.This includes $443 million in catastrophe losses for the first quarter, plus $250 million in catastrophe losses for the balance of the year. The guidance also includes $74 million of after-tax positive prior period development reflected in the first quarter as well as an adjustment for the estimated increase to the investment income run rate.Operating earnings of 79 cents per share bettered the 62 cent estimate of a panel of analysts polled by Bloomberg.Ace chairman and chief executive officer Evan Greenberg said: “Ace had a very good quarter that was overshadowed by significant catastrophe losses. We produced $268 million in operating income and grew book value two percent.“Our ROE [return on equity] and combined ratio were 4.9 percent and 105 percent, respectively. Excluding the catastrophe loss impact, our book value growth, ROE and current accident year combined ratio were four percent, 13 percent, and 91.8 percent, respectively. I believe this speaks to the health of our business, the strength of our risk management and the benefit of our broadly diversified business.“Our revenue growth was better than we originally anticipated when we planned the year and the renewal persistency of our business was excellent. We also benefited in the quarter from positive client payroll and sales growth due to improved economic conditions. Finally, rates for our renewal business declined at the slowest pace we have experienced in a number of quarters.“We are more confident today about our prospects for full-year premium growth than we were last quarter and now believe growth will be between upper single-digit and low double-digit.“Not included in our projections, if markets firm in any individual geography or class as a result of the catastrophes and reach a point where we find the risk-reward attractive, we are well positioned to take advantage.”Ace's book value increased $402 million, or two percent, during the quarter. Book value per share of $69.33 was up one percent from December 31, 2010. The property and casualty combined ratio for the quarter was 105 percent, compared with 92.8 percent last year.