In an effort to address the growing insurance needs of the renewable energy sector, ACE USA, the US-based retail operating division of ACE Ltd. (ACE), has formed a specialized underwriting unit, Renewable Energy Unit.
 
The Renewable Energy Unit, a part of the ACE Casualty Risk Division, will offer a comprehensive package of ACE property and casualty products geared to cater to the needs of renewable energy companies. Through energy underwriting specialists in different regions, its brokers and clients can access the robust portfolio of ACE renewable energy solutions.
 
The company also believes the Renewable Energy Unit will augment ACE’s present energy offerings through a comprehensive package. The package will have options for property, casualty and errors & omissions insurance, and a full range of health, safety and environmental consulting services offered through ESIS Inc., ACE Group’s risk management services company. ACE Custom Casualty covers energy risks stemming from energy fields including oil, utilities and power generation, alternative and emerging renewable energy industries and technologies through multiple product offerings.
 
The company also appointed Darren Small as Vice President, National Renewable Energy Underwriting Manager, to lead the Renewable Energy Unit. Darren Small will have overall underwriting authority for the entire ACE renewable energy book of business. With his expertise and experience in the renewable energy field, the company believes that ACE will successfully provide value and service to this growing renewable energy market.
 
The Zacks Consensus Estimate for the second quarter of 2010 is earnings of $1.86 per share. Estimate for 2010 and 2011 are pegged at $7.13 per share and $7.41 per share, respectively.
 
Last week, ACE re-entered the S&P 500 index. The company will be placed on the index after the close of markets on July 14.
 
ACE has a strong capital position, conservative underwriting practices and positive ratings from the rating agencies. However, we do not expect a robust improvement in the top line in the upcoming quarters given the economic recession affecting clients’ insurance budgets. Competitive pressures will also weigh on improvements in rates. Thus, we remain neutral on ACE. Currently the company has a Zacks #3 Rank, indicating no clear directional pressure on the shares over the near term.
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