NEW YORK (Bloomberg) — Ace Ltd., the business insurer that moved its headquarters to Zurich from Bermuda, said profit plunged 97 percent, the second consecutive quarterly decline tied to losses in its investment portfolio.

Fourth-quarter net income was $20 million, or six cents a share, compared with $572 million, or $1.69, in the same period a year earlier, Ace said yesterday in a statement distributed by Business Wire. Profit excluding the investment losses was $1.87, matching the estimate of 17 analysts surveyed by Bloomberg.

Chief executive officer Evan Greenberg is looking to pick up customers from ailing rivals after sidestepping the mortgage-related investments that led to losses last year at American International Group Inc. and XL Capital Ltd. Ace, which sells insurance and reinsurance, bucked an industry trend in December when Standard & Poor's said it may upgrade the insurer on the prospect that it can take business from competitors.

"Given the weakened competitive position of some of Ace's peers over the past year, we believe Ace is in a solid position to take advantage of current market dislocation," the ratings firm said in a December 19 statement. "We view Ace's competitive position as very strong, supported by the group's extensive and well-diversified business platform."

Ace switched its holding company domicile from the Cayman Islands to Switzerland last year, but still has its principal executive offices in Bermuda, along with substantial operations on the Island.

Premiums from policies sold in the quarter rose eight percent to $3.05 billion, driven by growth in life insurance business and non-US accounts. Excluding fluctuations in currencies, policy sales rose 13 percent.

Ace has fallen 28 percent in the past year, beating the 50 percent decline in the 175-member Bloomberg World Insurance Index. The shares fell 38 cents, or 0.9 percent, to $42.77 in New York Stock Exchange composite trading yesterday.

Investment losses are causing commercial insurers to pare back on price cuts that have been a constant in the US since 2004. Commercial insurance rates in the US fell 6.4 percent in the fourth quarter from the same period a year earlier, the smallest decline since 2006, according to a survey by the Council of Insurance Agents and Brokers.

North American insurers have posted more than $125 billion in write-downs and credit losses tied to the collapse of the US housing market in the past two years.

"Ace produced strong operating results in one of the most difficult quarters in modern history for financial services companies," Mr. Greenberg said in last nights earnings statement.

Book value declined six percent in the fourth quarter and 10 percent for the year. Mr. Greenberg said this had been impacted by "realised and unrealised investment losses, extreme foreign exchange fluctuation and a loss from fair value increase in the liabilities associated with our life reinsurance business".

He said he believes most of losses in the portfolio and the life reinsurance business will recover in value over time.

"In the quarter, we began to improve our price-to-exposure from firming insurance prices and gain market share in certain classes from weakened competitors," Mr. Greenberg added. "While the recessionary conditions are formidable, we are encouraged by government efforts to stimulate the economy."