leading excess liability carrier ACE Ltd. for net realised losses of nearly $45 million during its first quarter.

It led to a drastic decline in net income for the first three months to December 31, the company reported yesterday.

Net income for the quarter was $1.4 million or three cents per share, down 98.5 percent from last year's first quarter that yielded net income of $97.1 million, or $1.95 per share.

Excluding net realised losses, the company reported income of $46.1 million, or $0.97 per share, compared with $33.1 million, excluding net realised gains, or $0.67 per share for the same three months to the end of December 1993.

ACE suffered net realised losses of $44.8 million, compared with last year's net realised gains of $64 million, which included the $58 million gain from the sale of Centre Re common shares. Fully diluted net asset value per share at December 31 was $23.05.

But net premiums written increased by 15.7 percent to $110.9 million in the review period when seen against $95.8 million for the comparative period. Net premiums earned were up 12 percent to $104.1 million from the prior figures of $92.9 million.

The company said that the increase in earned premiums was primarily a result of new satellite business, excess liability price increases and the inclusion of one additional month of CODA premiums this quarter as compared with the same period the year before.

Chairman, president and CEO, Mr. Brian Duperreault, said: "We were very pleased with our strong operating performance this quarter. Our plan to revise the asset allocation of our investment portfolio began this quarter and, as expected, we realised losses on securities sold to accomplish the restructuring.

"Consistent with this strategy, our equity exposure has been increased to 15 percent from 10 percent. We believe this will provide the potential for a better long-term total rate of return, within reasonable risk parameters, while affording wider diversification.'' Total investments and cash increased 3.2 percent to $2.6 billion at the end of the quarter, up from $2.5 billion at the end of September. Net investment income, excluding net realised gains (losses), was $43.3 million for the first quarter, compared with $31.5 million for the same period in the last fiscal year, a 37.6 percent increase.

Mr. Duperreault added: "We began to implement our revised excess liability integrated occurrence limits on December 15. We anticipate that the net effect of this change and of the continuation of price increases for certain industries will be a small near-term reduction in our excess liability premium volume but an improvement of our risk profile in the long-term. Initial results are in line with these expectations.

"At the end of this quarter, ACE became involved in First Line, which provides certificates of financial responsibility (CoFRs) required by the Oil Pollution Act of 1990 for any vessel operating in US waters.

"ACE serves as a reinsurer for the primary backer, Bermuda-based Stockton Re.

We recognised this opportunity as an excellent use of our capital and will begin receiving reinsurance premiums during our fiscal second quarter.'' ACE Ltd., through its wholly-owned insurance subsidiaries, is the leading provider of excess directors and officers liability insurance in the world and one of the leading providers of high level excess liability insurance.

ACE also offers satellite insurance for launch and in-orbit operations. The Bermuda-based company provides coverage to a diverse group of the world's largest enterprises.

At December 31, it had about $1.1 billion in shareholders' equity and about $2.7 billion in assets.

Mr. Brian Duperreault