ACE Ltd. last night said net income for 2003 was a record $1.4 billion, or $4.93 per share, compared with net income of $77 million, or 19 cents per share, for the year-ago period. Income on investments was up 142 percent to a record $1.2 billion, or $4.21 per share, compared to with $494 million, or $1.74 per share, for last year.

For the quarter ended December 31, ACE earned $421 million in the fourth quarter after raising premiums. Net income was $1.45 a share, compared with a net loss of $168 million, or 67 cents, in the same period a year ago, the company said last night.

In the year-earlier period, ACE boosted reserves to pay asbestos claims,costing $354 million.

Excluding realised investment gains and losses, profit was $328 million, or $1.12 a share. On that basis, the average estimate of analysts surveyed by Thomson Financial was $1.08 a share.

"The record results reflect the significant earnings power that ACE has built up over the last three years," chairman and chief executive officer Brian Duperreault said. "With annual net income substantially in excess of $1 billion, ACE has established a pre-eminent presence in the global property and casualty insurance industry."

ACE and other insurers are benefiting from three years of rate increases following a decade of under-pricing in the 1990s. The pace of increases has slowed and prices on some policies began to decline in the fourth quarter as profit margins recovered, according to the Risk and Insurance Management Society Inc.

In December, ACE said overall premium revenue would increase 15 percent to 20 percent in 2004 after an increase of as much as 47 percent in 2003.

Shares of the company, which released earnings after the close of trading, fell 39 cents to $43.46 in New York Stock Exchange composite trading. The stock is up 4.9 percent this year.

ACE was the tenth-biggest US commercial insurer in 2002, when it sold 2.5 percent of policies, according to A.M. Best Co