EXHIBIT 10.38

ACE Limited

 

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Computation of Ratio of Earnings to Fixed Charges and Preferred Share Dividends

 

Fiscal year ended December 31   2003   2002     2001     2000   1999

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Earnings per Financial Statements

  $ 1,417,482   $ 76,549     $ (146,414 )   $ 542,982   $ 364,963

Add (deduct):

                                 

Provision for income taxes

    278,347     (115,688 )     (78,674 )     93,908     28,684

Fixed charges

    205,758     218,494       219,849       242,783     126,138

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Earnings for Computations

    1,901,587     179,355       (5,239 )     879,673     519,785

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Fixed Charges

                                 

Interest Expense

    177,425     193,494       199,182       221,450     105,138

One third of payments under operating leases

    28,333     25,000       20,667       21,333     21,000

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Total Fixed Charges

    205,758     218,494       219,849       242,783     126,138

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Ratio of Earnings to Fixed Charges

    9.2     (1 )     (2 )     3.6     4.1

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Preferred Share Dividends

    36,009     25,662       25,594       18,391     –

Total Fixed Charges and Preferred Share Dividends

  $ 241,767   $ 244,156     $ 245,443     $ 261,174   $ 126,138

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Ratio of Earnings to Fixed Charges and Preferred Share Dividends

    7.9     (1 )     (2 )     3.4     4.1

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(1) Earnings for the year ended December 31, 2002 were insufficient to cover
fixed charges by $39 million and combined fixed charges and preferred share
dividends by $65 million.

(2) Earnings for the year ended December 31, 2001 were insufficient to cover
fixed charges by $225 million and combined fixed charges and preferred share
dividends by $225 million.