Credit Suisse Reiterates OP Rating On ACE

Credit Suisse is reiterating its Outperform rating on Ace Limited ACE following the announcement of 1Q11 catastrophe losses, “though the announcement of low Japanese quake losses should be a near term positive for the stock.”

“While losses for the Australian floods, Cyclone Yasi, New Zealand quake and winter storms were slightly higher than we expected, losses from the Japanese quake were below our expectations at only 1% of common equity (for both insurance and reinsurance),” Credit Suisse writes.

“While we expected the Japanese quake losses to be low considering that the 1-100 year expected loss for California quake is 3% of equity (pre-tax), the magnitude of the company's Japanese quake loss was a welcome surprise. We view this positively as the Japanese quake, while a ‘diversifying risk,' is not an attractively priced risk.”

Ace Limited closed Tuesday at $60.15.