Martin Senn - CEO: Welcome to Zurich Insurance Group's results presentation for the first nine months of 2012. Our Group delivered strong underlying profitability over the period, thanks to our continued focus on pricing discipline and portfolio management. The discrete third quarter results were adversely affected by the previously reported adjustment in our German General Insurance business. I'm disappointed by this particular as it masks a strong performance in the rest of the business and we are taking actions to address it. We were particularly pleased with the sustained top line growth in our target markets which includes some mature markets notably the United States where we are celebrating 100 years of doing business and our continued success in high potential growth markets in Latin America and Asia.
The Group's capital position remains strong and well within our AA target range, underpinned by our continued focus on risk management in both our disciplined investment and underwriting strategies. While we have seen some improvements in North America the economic environment in which we are operating remains challenging especially in Europe. Nevertheless we remain focused on executing our strategy and are on track to deliver on our strategic targets for 2013.
So let's have a closer look at the numbers. Business operating profit for the first nine months of this year was U.S.$3.2 billion unchanged from the comparable period despite the adjustment of U.S.$550 million in our German General Insurance business in the discrete, third quarter. Net income attributable to shareholders was U.S.$2.7 billion, down 16% due to lower net capital gains compared to the prior year period. Despite the adjustment, General Insurance delivered a gain in business operating profit and has continued to make good progress on delivering its strategic targets through disciplined underwriting and expense management.
The business has achieved average rate increases of 3.6% and the underlying loss ratio for the nine months improved by 2.8 percentage points to 61.6%. The overall combined ratio improved by 1.2 points to 97.6%. Premium volumes in European markets have been under pressure because of the subdued economic environment there, but this was more than offset by premium growth in North America and the continued expansion in our target markets.
Global Life continued to show the positive impact of organic growth in U.S., U.K. and Latin America. Our acquisitions in Latin America and Asia Pacific will further strengthen this growth, though they are not included in new business results for this reporting period. Results were once again, are grossly affected by the challenging environment in Europe and persisting low interest rates, while the gross written premiums, policies fees and insurance deposits increased strongly and the segment continues to shift its product mix to its protection and fee-based business.
At Farmers profitability and at the Management Services company rose on the back of an increase in gross earned premiums in the Farmers Exchanges, which are managed but not owned by Farmers Group, a wholly owned subsidiary of the Group. This was offset by weather-related losses and the absence of favorable prior year loss development at Farmers Re. Farmers Management Services gross earned premium margin was little changed at 7.4%.