Zurich reported net income for the nine months rose 25 percentcompared with last year based on business growth along all of itsoperating segments.

The Zurich, Switzerland-based insurer reported net income rose$831 million from $3.33 billion last year to $4.16 billion.Earnings per share rose CHF (Swiss Franc) 6.22 to CHF 34.80 ashare, which translates into an increase of $5.54 to $30.97 at thecurrent exchange rate.

The company did not report quarterly results.

Zurich said gross written premiums and policy fees rose 4percent, or more than $1 billion, to $27.32 billion from $26.30billion last year.

On the United States side of the business, revenue from FarmersManagement Services, whose executives said they do not own butmanage because it is a reciprocal based in Los Angeles, rose 6percent, or $90 million, to $1.68 billion. Combined ratio increased2.5 points to 98.5.

The company's life business increased 4 percent, or $594million, to $15.37 billion.

However, the company reported combined ratio rose 2.4 points to97.9 in part because of $579 million from flood losses in GreatBritain during the summer, less than its initial estimate of $660million. The combined winter storm Kyrill in Europe and theflooding amounted to $761 million in losses, said Dieter Wemer, thecompany's chief financial officer, during a conference call today.The big losses in Europe were offset by low levels of U.S.catastrophe loss.

However, he said Farmers expects to see a loss of $265 millionfrom the California wildfires. The loss, he said, will not have amaterial effect on Farmers or Zurich in the fourth quarter.

He said the integration of Bristol West, a private passengerauto insurer based in Davie, Fla., is proceeding and plans call forthe expansion of the business to more than 22,000 independentagents by March 2008 and more than 25,000 by the end of 2008.

During the call, John J. Schrio, Zurich's chief executiveofficer, said: "We grew where we said we would, with Farmers,global life, EGI and our international businesses leading the way,while maintaining, in these markets, underwriting discipline acrossall of our markets. We drove organic growth through enhancedcustomer propositions, new products, and expanded distributioncapabilities" while expanding through global acquisitions.

The company said it aims to increase its three-year goal foroperational cost cuts from $2 billion to $3.1 billion by 2010, andincrease its 2008 target from $700 million to $800 million.

When asked during the conference call where he expected the cutsto come from, Mr. Schrio pointed to some company initiatives suchas restructuring in the business in Germany resulting in $125million a year in savings.

Farmers' improvements in servicing to customers and agents, hesaid, is expected to result in $40 million in savings, which mightbe leveraged elsewhere; and a shared services platform by theZurich America would result in $90 million over three years.