Ltd. intends to merge its existing three London managing agencies into one.

The boards of the various agencies believe the new strategy is essential if the group is to realise its full potential and maximise the advantages which its size and strength provide, as part of the strongly capitalised ACE group.

Agency board members met yesterday and took some decisions concerning the capital and operational structure of the group and its managed syndicates which are proposed to take effect over the next two years.

The ACE group has 692 million (nearly $1.14 billion) of capacity under management for the 1998 year of account of which ACE Ltd., through its dedicated vehicles, contributes 43.9 percent or 304 million (nearly $500 million).

ACE has nine managed syndicates under three managing agencies. ACE said yesterday that the boards considered the multiplicity of agency and capital structures no longer served the best interests of the business, its customers or capital providers in the rapidly changing Lloyd's and international insurance markets.

ACE will seek the approval of Lloyd's to merge the three London agencies, ACE London Underwriting Ltd., ACE London Aviation Ltd. (ALA) and Methuen Underwriting Ltd. into one group called ACE London Underwriting Ltd.

The transfer of the management of Methuen Syndicates 47, 48, 375, 483, and 484 will be completed, as previously announced, by the end of this year with the transfer of ALA's Syndicates 925 and 960, taking effect from January 1, 1999.

ACE will seek necessary approvals from other capital providers, and from Lloyd's, to merge two aviation syndicates which are now written in parallel, Syndicate 48 and Syndicate 960. The enlarged syndicate would trade as Syndicate 960 (Ariel Aviation) for the 1999 year of account.

The consent of Lloyd's and capital providers will also be sought to bring ALU's syndicates together under a single capital base, in which ACE Ltd. and external capital providers participate, with effect from January 1, 2000.

The board wishes to retain the benefits of a business structure in which each operating unit enjoys a high degree of autonomy.

Board members believe this can be accomplished while moving to a common capital base, which will further empower its underwriters with the combined resources of what could be the largest Lloyd's underwriting entity.

The creation of a common capital base will also facilitate cooperation in both underwriting initiatives and in reinsurance purchasing, and will further streamline the current syndicate accounting process.

Members of the agency boards also believe the changes will provide more opportunities for staff and enable the group to build on the flair and motivation of their well regarded underwriting teams to provide the best possible service to customers.

The group feels it will be better able to realise its profit potential to the benefit of all capital providers and fulfil its firm commitment to the resurgence of the Lloyd's market.

More discussions are planned with the various capital providers in the period up until 1999.