ACE Limited said yesterday that second-quarter profit rose to a record $467 million, with underwriting income and investment income contributing equally to strong growth.

Quarterly profit rose more than ten percent with net income breaking down to $1.58 a share, compared to $423 million in restated net income, or $1.44 a share, for the year-ago period.

Profit from operations, after-tax income that excludes net realised gains or losses, for the period stood at $467 million, or $1.58 a share, compared to $391 million, or $1.33 a share, a year ago.

ACE results in the last 21 quarters, from 2000 through the first quarter of this year, are being restated after ACE last Thursday said eight finite risk contracts were to be re-accounted for under deposit, not reinsurance, rules.

The restatement boosts net income, over the five-year period, by a total of $45 million.

ACE?s second-quarter net income beat analyst expectations of $1.44 in earnings a share, according to a survey of 19 analysts by Thomson First Call.

Net investment income reached $305 million, up from the $243 million recorded in the second quarter, 2004.

Gross written premiums rose five percent in the quarter to $4.2 billion, compared to the $4 billion ACE wrote in the year-ago period.

Net written premiums for the global property and casualty insurer increased 1.3 percent from $2.86 billion a year ago to $2.9 billion in the second quarter, 2005.

The difference between gross and net written premiums reflects how much insurance an insurer buys, called reinsurance, to protect it from claims.

In the second quarter, ACE?s combined ratio reached 90.2 percent, a slight deterioration from the 88.7 percent posted in the year-ago period.

A combined ratio measures profitability of an insurer?s main business, underwriting.

If the number, listed as a percentage, is under 100, a profit has been made.

The lower the number, the more profitable underwriting was in the period.

ACE management will discuss the company?s second quarter results on a conference call this morning at 9:30 a.m. Bermuda time.

Call-in details can be accessed on the company?s website, www.acelimited.com

Shares of ACE fell 20 cents to $46.31 in New York Stock Exchange composite trading. The stock has risen 20 percent in the past year compared with a 16 gain in the KBW Insurance Index.