NU Online News Service, Nov 5, 1:00 p.m.EDT

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Zurich Financial Services Group reported third quarter netincome rose 490 percent over the same period last year despiteeconomic challenges.

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The Zurich, Switzerland-based insurer reported third quarter netincome rose $755 million to $909 million. The company said it wasthe fourth consecutive quarter of quarter-on-quarter improvementsince the third quarter of 2008.

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Discussing the results during a conference call with investmentanalysts, James J. Schiro, Zurich's chief executive officer calledthe third quarter results "excellent" with core operating results"returning to pre-crisis levels."

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"This success in the face of some of the most challengingeconomic markets in history reflects our ability to leverage adisciplined operating platform that has become accustomed todriving global strategies across a diverse footprint ofbusinesses," observed Mr. Schiro.

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For the nine months, Zurich reported net income has fallen 24percent, or $671 million, to $2.16 billion.

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While general insurance gross written premiums and policy feesdeclined 10 percent, or $2.9 billion, to $26.3 billion, otherinsurance line segments increased.

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Farmers Insurance, which Zurich manages but does not own, feesand other related revenues increased 8 percent, or $142 million, to$1.97 billion and Farmers Re gross written premiums and policy feesincreased 112 percent, or $2.6 billion, to $4.96 billion.

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Global life gross written premiums, policy fees and insurancedeposits grew 16 percent, or $2.34 billion, to $17.4 billion.

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Zurich said the results in general insurance witnessed a 1.9point improvement in the combined ratio, which dropped to 96.9.

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Farmers improved results were driven by its acquisition of21st Century in July which accounted for a 7 percentincrease in the company's revenue stream. The company added thatthe integration of 21st Century continues to progress"in line with Farmers previously successful integration trackrecord."

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Of special interest to analysts during the call was the questionof whether Zurich plans to make any acquisitions in the future. Mr.Schiro, who is retiring at the end of the year, said the companydoes not comment on specific acquisition plans. However, he saidthe company has outlined its acquisition interests primarily inemerging markets and life area.

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He said Zurich's "fairly robust capital and solvency position"is not designed for acquisition but to protect the company in thecurrent economic climate, which he called "precarious at best"adding, "its hard for us to say if we are in a full recovery atthis points in time. It is prudent for us to have the liquiditybuffers that we have."

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