talks.

Bermuda-based ACE confirmed on Tuesday talks were being held about a proposed $3 billion purchase of the property and casualty insurance business of Cigna Corp.

ACE's share price rose about $2 7/8 to $31 13/16 in late afternoon trading.

Boston-based Loomis Sayles & Co. analyst Kevin Callahan was bullish on the proposed purchase in a radio interview with Bloomberg. Loomis Sayles & Co.

held about 5.6 million worth of ACE shares at the end of the third quarter.

"This would add to the products that ACE currently has in its quiver,'' he said. "With more products and greater access to customers, ACE should be able to compete and should do well going forward.'' The Bloomberg interviewer also queried whether ACE chairman, president and chief executive officer Brian Duperreault was attempting to build a company as large as American International Group. Mr. Duperreault worked at AIG before joining ACE in 1994. "It would be a terrific company and ultimate return to shareholders would be very good going forward,'' Mr. Callahan responded.

He praised ACE's management for being disciplined in the manner in which the company was growing through acquisitions. Although Cigna had problems in its property and casualty business during the 1990s, the company had subsequently reorganised and positioned it for growth.

"What ACE would be acquiring would probably be pretty decent,'' Mr. Callahan said. "...It will provide a greater pipeline for the products they have already developed.'' He speculated that ACE could probably reinsure the business it was acquiring back to Bermuda, where the company would be able to "reap the benefits of investment income of that book of business'' because of the lack of corporate tax.

ACE earlier this year made its move into the US with the purchase of Atlanta-based Westchester Specialty Group, Inc., renamed as ACE USA, for $338 million.