reports.

Bermuda-based ACE Ltd. yesterday confirmed the company is in talks to make a proposed $3 billion purchase of the property and casualty insurance businesses of Cigna Corp., one of the largest US providers of corporate benefits.

The proposed purchase would exponentially expand ACE's platform in the US as the company aggressively pursues a global growth strategy. Cigna's property and casualty insurance business has about 5,000 employees compared to the 210 staff ACE currently has in the US.

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.

As part of ACE's expansion into the US the subsidiary has grown from property and casualty to expand into specialty, warranty, directors & officers, errors & omissions, and captive reinsurance divisions.

In a joint statement yesterday ACE and Philadelphia-based Cigna said the companies had agreed to hold exclusive negotiations on a sale through December 27.

"This would be a unique opportunity for ACE to acquire one of the premier global property and casualty franchises,'' ACE chairman, president and chief executive officer Brian Duperreault stated in a press release.

Reuters news agency was reporting that Bermuda-based Exel Ltd, among others, were also competing with ACE to make the purchase. Both ACE and Exel have been aggressive in expanding their US business.

Exel's most recent move has been to announce an agreement to purchase of US-based Intercargo Insurance Co. for $88 million.

ACE, which sells excess-liability insurance to corporate clients, has been seeking ways to expand a US property-casualty insurance unit, ACE USA, that it launched early this year.

Cigna, the third-largest US health insurer, is focusing on providing managed health plans and other benefits to companies.

The companies said the final purchase price could be "well in excess'' of $3 billion.

Insurers are merging at a record pace at a time when rising competition, particularly in commercial property-casualty lines, has made growth in revenue and profits elusive.

During 1998, ACE completed three acquisitions, including the purchase of the renamed ACE USA from Xerox Corp. It also bought Bermuda-based CAT Ltd., and Tarquin Underwriting Agency, a Lloyd's of London insurer.

Mr. Duperreault has previously stated he might try to expand ACE USA through purchases or internal growth.

According to Bloomberg news Mr. Duperreault also expressed a wary approach to takeovers.

"You have to protect your corporate culture in acquisitions,'' he said.

"We don't necessarily have to acquire and still have, I think now, with our structure, the ability to grow.'' Some analysts told Reuters that ACE might find it difficult to squeeze more profits from the proposed purchase.

Ira Zuckerman, an analyst at Westport, Connecticut-based Nutmeg Securities Ltd., said he doubted "ACE will get any great value from it,'' because of the division's relatively high expenses.

Earnings at Cigna's US and international property and casualty business fell 78 percent in the third quarter to $13 million from $59 million a year earlier.

Cigna ranked 35th among US property and casualty insurers in 1997, based on the $1.5 billion of premiums it collected, net of reinsurance, according to A.M. Best Co.

Workers' compensation insurance accounted for 23 percent of total premiums, and other forms of commercial coverage for more than 70 percent. Of the Cigna property-casualty businesses still writing new policies, about five percent was sold to individuals.

Cigna's US property-casualty division includes the 206- year-old Insurance Co.

of North America.

The group of insurers sells policies through brokers to big businesses and to small businesses and individuals through independent agents.

Three years ago, Cigna split its property-casualty business into two groups, INA Holdings Corp. and Brandywine Holdings Corp. INA comprises companies writing new policies, while Brandywine holds a handful that are being shut or whose policies are being allowed to "run off''.

Other insurers interested in acquiring the Cigna property and casualty business include France's Axa SA, Germany's Allianz AG and American International Group Inc. of New York, Reuters said.

ACE EMPIRE Here is a list of ACE Ltd. shopping list and new formations (dates reflect when announced, and not necessarily when acquired or formed; numbers in brackets reflect cost of purchase) Purchase of 51 percent of Methuen, a Lloyd's of London managing agent, and agreement to complete full acquisition by 2000 -- 1996 Purchase of Tempest Reinsurance ($641.7 million stock) -- 1996 Purchase of Ockham Worldwide Holdings Plc., a Lloyd's of London underwriter -- 1996 Purchase of Bermuda-based Tempest Reinsurance Ltd. -- 1996 Opens up Dublin office, formation of ACE Insurance Co. Europe Ltd. -- September, 1997 Purchase of Westchester Specialty Group ($338 million), holding company ACE USA formed -- January, 1998 Formation of ACE Capital Re in joint venture with US-based Capital Re -- March, 1998 Purchase of Bermuda-based CAT Ltd. ($711 million) -- April, 1998 Acquires majority of stock in Creditor Resources Canada Ltd. in British Columbia -- June, 1998 Purchase of Tarquin Ltd., a Lloyd's of London underwriter ($500 million) -- July, 1998 Airline Risk Consortium -- formed with Exel Ltd. and Overseas Partners Re Ltd.

-- September, 1998 Alliance with Blackthorn Reinsurance Services, Inc. in US -- October 1, 1998 In talks to buy for $3 billion the property and casualty business of US- based Cigna Corp. -- December 1998 AMBITIOUS -- President and CFO of Elan International Services, Kevin Insley, at his desk. Ireland's biggest drug company, Elan Corporation plc. is planning a global expansion. And the Bank of Bermuda is playing a key role in the proposals. Story: Page 15