ZURICH--(BUSINESS WIRE)--The Board of Directors of ACE Limited (NYSE: ACE) announced today that it will recommend to shareholders a 24% increase in the company’s quarterly dollar-denominated dividend, from $0.51 per share to $0.63 per share, commencing with the quarterly dividend payments in January and March 2014. The proposal requires shareholder approval and the company will file a proxy statement with the Securities and Exchange Commission that will be mailed to shareholders of record as of December 5, 2013.
The board also announced authorization of a share repurchase program up to $2 billion of the company’s common stock through December 31, 2014, to replace the current authorization, which has $228 million remaining through December 31, 2013. The company is targeting up to $1.5 billion of share repurchases between now and the end of 2014, to be made from time to time depending on market conditions as well as the company’s view of risks and opportunities.
“We are pleased to propose a substantial dividend increase while also returning capital to shareholders through share repurchases,” said Evan G. Greenberg, Chairman and Chief Executive Officer, ACE Limited. “ACE has a history of growth, both organically and through acquisitions. The actions we have announced today do not represent any change in our strategy or our view of ACE’s global opportunities for growth. Rather, they are recognition of our strong balance sheet and earnings generation power. Following these actions, we retain considerable capital flexibility for risk and growth opportunities, which we will continue to pursue to enhance our strategic position and improve our global operations.”
“We are targeting a dividend payout in the 30% range of our expected operating earnings, which we believe is appropriate for a growth company,” said Philip V. Bancroft, Chief Financial Officer, ACE Limited. “This action is a one-time increase that resets the level of our annual dividend. We reassess our dividend each year in February and intend to continue our longstanding practice of steady dividend increases.”
The proposal to increase the dividend will be in addition to the existing dividend resolution as approved by the company’s shareholders on May 16, 2013, and will apply to the next two quarterly dividend installments. An extraordinary general shareholder meeting to vote on the resolution will take place on January 10, 2014, at the company’s offices in Zurich. The board also declared that the first of such installments shall be payable on January 31, 2014, to shareholders of record at the close of trading on the New York Stock Exchange on January 13, 2014. In the event shareholders reject the proposed increase, the dividend would continue to be paid in the originally approved amount.
ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 54 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at: www.acegroup.com.
Cautionary Statement Regarding Forward-Looking Statements:
Forward-looking statements made in this press release, such as statements regarding dividends and record date, the proposed extraordinary general meeting, share repurchases and capital flexibility, reflect the company’s current views with respect to future events and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, the company’s forward-looking statements about its dividend payments could be affected by any change in schedule for the shareholder meeting, potential rejection of the dividend proposal by shareholders, extraordinary currency fluctuations leading to reduction in the USD value of the dividend pursuant to the dividend cap approved by the company’s shareholders and described in the company’s proxy statement dated April 5, 2013. Forward-looking statements related to capital flexibility and growth opportunities may be affected by actual business results or external events such as catastrophes or developments in the financial markets. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find it:
This press release is not a solicitation of a proxy and is not a substitute for any proxy statement or other filing that may be required to be made with the Securities and Exchange Commission in connection with the extraordinary general meeting. Shareholders and other interested parties are urged to read any such documents that are filed with the Securities and Exchange Commission because those documents will contain important information. Shareholders will be able to receive such documents free of charge at the SEC's web site, www.sec.gov, in the Investor Relations section of the company's website, www.acegroup.com, or by contacting ACE Investor Relations by telephone at 1 (441) 299-9283.