Efforts by the Financial Accounting Standards Board to changeaccounting for insurance contracts deviate from an established,well-tested and reasonable norm, and essentially amount to asolution in search of a problem, according to comments by ACEChairman and CEO Evan Greenberg.

Speaking to analysts during ACE's third-quarter conference call,Greenberg, in response to a question on his thoughts regardingFASB's accounting-standards proposal, said, “[W]hen I look at thechanges that FASB is suggesting right now, I get the theoretical,but that is divorced from practical reality and what investorsreally use to judge, and what management really uses to judge, onecompany to another or the health of a company.”

See details on FASB's proposal here

He added, “The insurance accounting as it stands today has beenaround a long time, and it's been tested through all types ofenvironments, and it's reasonable. And I don't know what kind ofproblem we're trying to chase here by making changes.”

Greenberg acknowledged the effort by FASB to achieve convergencewith the International Accounting Standards Board, but he said,“IASB has no insurance-accounting standard right now. So I wouldsuggest to them that they adopt what has been tried and tested, andthat is U.S. insurance accounting.”

Greenberg concluded, “Finally, what I'd say is the notion offair valuing all, and that that somehow is the best indicator ofvalue, particularly for a buy and hold company, and also the notionof introducing more volatility because you're going to try andpredict long-term cash flows on businesses that are currently notstable, in my mind, is imprudent, and I don't know whose benefityou're ultimately serving, except a bunch of academics.”

For the third quarter, ACE reports net income of $916 million, a43.1 percent increase over the same period a year ago. Operatingincome grew to $857 million, up from $688 million in 2012's thirdquarter. Underwriting income was $576 million, up from $360 milliona year ago for the same period.

In a statement, Greenberg says, “ACE had another record quarterdriven by exceptionally strong underwriting results anddouble-digit constant-dollar global P&C premium-revenuegrowth.”

ACE's combined ratio was 86.5, an improvement from 92 in 2012'sthird quarter.

In the conference call, Greenberg said ACE benefitted fromlower-than-expected catastrophes, but stressed that the companydoes not rely on low catastrophes for good results. “Our currentaccident-year underwriting was a substantial contributor to ouroverall results in the quarter,” he said.

Asked if Berkshire Hathaway taking on a bigger role in primaryspecialty would affect the market in the next three-to-five years,Greenberg said, “I don't expect one carrier—to what is already adynamic and large marketplace—to have a disproportionate impact onthe business. It takes a long time to build an insurance companythat can compete on a national basis, that can write the leadprimary layers,” and that can manage all kinds of customers ofdifferent sizes and locations.

“Your best day is the day you opened,” Greenberg said. “Afterthat, it is a grind it out, day-in and day-out. And anyone enteringthis business, whoever you are, I wish you luck.”