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

Zurich Financial Services Group reported third quarter net income rose 490 percent over the same period last year despite economic challenges.

The Zurich, Switzerland-based insurer reported third quarter net income rose $755 million to $909 million. The company said it was the fourth consecutive quarter of quarter-on-quarter improvement since the third quarter of 2008.

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

"This success in the face of some of the most challenging economic markets in history reflects our ability to leverage a disciplined operating platform that has become accustomed to driving global strategies across a diverse footprint of businesses," observed Mr. Schiro.

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

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

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

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

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

Farmers improved results were driven by its acquisition of 21^st Century in July which accounted for a 7 percent increase in the company's revenue stream. The company added that the integration of 21^st Century continues to progress "in line with Farmers previously successful integration track record."

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

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

Special Reports /

Zurich Reports 3Q Net Income Rose 490%

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