Bermuda-based insurance giant ACE yesterday said it had seen strong business interest in the third quarter but was maintaining a very selective approach to what business it wrote even as it faced increasing pricing pressure from competition across numerous lines of business.

ACE management spoke of the company?s disciplined underwriting approach following Tuesday?s release of the company?s third quarter earnings showing a net loss of $3 million as a direct result of unusually high storm activity in the Atlantic and Pacific.

The quarter?s loss was in marked contrast to the $355 million in net income posted the same period a year ago.

ACE said the total impact of the storms ? with unprecedented hurricane activity this year ? had resulted in a $406 million after-tax charge.In a telephone interview with The Royal Gazette, ACE president and CEO Evan Greenberg reaffirmed what has long been ACE?s stance of walking away from underwriting business that may prove unprofitable.

?As the environment becomes more competitive, we are more selective in the business that we choose to write.?

He conceded that certain classes of business ? including directors and officers liability (D&O) and errors and omission liability (E&O) coverage ? was under competitive pressure, particularly in the excess layers.ACE, a company that set up in Bermuda in 1985 to write excess casualty business, has grown through the years ? primarily through strategic acquisitions ? into a global powerhouse writing business in 50 countries around the world.

Yesterday, Mr. Greenberg said that the company?s Bermuda office ? which continues to be known for writing business at the higher excess layers, or at attachment points above $100 million ? was seeing flat growth, as well as other segments writing business at attachment points within the first $100 million.

?We have been more selective in what we write and we are not going to simply follow the market down if we think the prices are inadequate.?

Mr. Greenberg said that submission activity in the last quarter had been very strong, but that ACE had only closed on a small portion of the business that it saw.

Speaking with insurance industry investment analysts on an earnings call yesterday morning, Mr. Greenberg said that in round numbers ACE was ?walking away from about 85 percent of everything we see?.

Despite the selective approach, ACE has maintained strong growth with net written premiums increasing in the third quarter by 20 percent to $2.8 billion compared to $2.3 billion during the same period a year ago.

Year on year, the company said it had seen strong growth in its US units where net written premiums were up 27 percent in the third quarter. On the call with analysts, Mr. Greenberg said several lines written by its ACE Westchester and ACE USA divisions ? including inland marine, crops and weather-related risks ? had seen strong business in the quarter. In addition, Mr. Greenberg pointed to an increase in business written with US multinationals operating overseas, along a broad range of lines.

In contrast, growth in net written premiums in ACE?s Insurance Overseas-General division was only up 12 percent, and that was knocked down to six percent by foreign exchange impact.

But there was strong growth ? 44 percent growth in net written premiums in the company?s global reinsurance business.

But he said that in numerous classes of business pricing continued to be difficult and that in a number of areas the company was reaching ?walkaway? points.

All in all, Mr. Greenberg said that he was ?very comfortable with the business we are putting on?.

The company has been under intense scrutiny since earlier in the month after an investigation into the sector by New York Attorney General Eliot Spitzer resulted in a damning civil action against leading broker Marsh & McLennan.

Although ACE was not a defendant in the matter, it was named in the suit as having participated with Marsh in a ?bid rigging? process that created the false appearance of competition.

ACE said it was cooperating with Mr. Spitzer?s investigation ? one ACE employee has pleaded guilty to a misdemeanour charge and is on paid leave ? and is also conducting its own internal investigation of business practices.

But yesterday Mr. Greenberg said that while senior management were taking the investigation very seriously, the focus of ACE?s underwriters was on prudent writing of business.

?I can tell you overall our organisation is not distracted, we are focused and come to work everyday focused on business.?

?We have not changed anything in the platform; you have got to be focused to win,? he said, adding that the company is entering a busy time in the run up to the January 1 renewal period ? typically the busiest period for insurers.

Mr. Greenberg concluded: ?We think we are well positioned and we will continue to do what we do.?