Bermuda-based insurance giant ACE Limited says it is expanding into four more countries as part of a strategy to 'plant the seeds' for future growth.

Speaking after the company's release of fourth quarter and year-end results, ACE CEO Evan Greenberg said the company had been given the green light on its application for a life licence in Vietnam and China, and that P&C licences in Poland and Russia were in the offing.

ACE already writes business in about 50 countries around the globe, and amongst US commercial insurers, it ranks as the tenth largest.

"One of our strengths is our global reach and diversification. Building a presence in areas of the world that will themselves grow in prosperity in the future is part of our global strategy," Mr. Greenberg said, adding that ACE plans to move on the Asian life licenses as soon as they are in hand.

The new Chinese life venture is in partnership with the Hautai Insurance Company, an ACE joint venture. "ACE will initially own 20 percent of this joint life venture but we have an agreement to increase that percentage to 50 percent in the near term. We have been working on this for some time. In fact we got our preparatory licence last June so we plan to hit the ground running the day the licence has been granted."

In an interview, Mr. Greenberg said ACE will also in future seek a non-life insurance license in Vietnam.

"We don't expect these four new country operations to contribute meaningfully to earnings in the medium-term but again, we are planting seeds for the future," he said.

UBS analyst Michael Lewis said he'd heard a company headquartered on Pine Street once make a similar claim, in an oblique reference to leading commercial insurer AIG.

AIG is already established in Vietnam and China, but the parallel was also likely drawn because many of ACE's executives are former AIGers, including Mr. Greenberg who was COO of that company until he suddenly quit, then joined ACE a few years ago. He is also the son of AIG CEO and insurance legend Maurice 'Hank' Greenberg.

On Wednesday, ACE said fourth-quarter profit fell 37 percent from a year earlier to $282 million, hurt by a large reserve charge related to asbestos and environmental losses. In addition to taking an after-tax charge of $302 million to shore up asbestos reserves in the fourth quarter, ACE also sustained net catastrophic losses of $437 million in the third quarter.

Profit for the year stood at $1.1 billion, a 20 percent drop on the record $1.4 billion in earnings reported by ACE in 2003.

Hitting above the $1 billion mark, as well as maintaining a combined ratio for the year of 96.6 percent, putting more than 20 percent growth on in property and casualty premiums, while investment income grew 16 percent to a record $275 million were cited by Mr. Greenberg as "all in all, quite a good performance given the events of the year".

Legg Mason analysts agreed. "Clearly, ACE is clicking on all cylinders. It has growth opportunities where many do not. It has generated record cash flow that has helped boost investment income," the group said in an investment note.

Although the insurance market is seeing increasing competition as the 'soft' market cycle sets in across many lines, Mr. Greenberg said ACE's global reach will see it through.

"Premium growth rates while good overall continued to decline in the quarter and are in line with the trend," he said, adding that a more cautious approach to what business they take on was in line with the company's underwriting discipline in the face of a softening market.

But he said this was offset by the company's increasing "market and product presence, both in the US and overseas."

He said the close ratio was declining but stable at about 15 to 20 percent.ACE investors yesterday reacted favourably to the company's results, pushing up the value of shares by 52 cents, or more than one percent, to $44.52.