WRAPUP 2-Insurers eye brighter 2010 with good Q3 under belt

* Allianz sees 2010 operating profit at upper end of range

* Hannover Re ups 2010 net goal to more than 700 million eur

* ING says to divest insurance ops via dual IPO

* Prudential sales up 17 percent, driven by Asia

* Hannover shares up 4 pct, Allianz down 1.6 pct

(Adds analyst comment, shares, detail)

By Jonathan Gould and Myles Neligan

FRANKFURT/LONDON Nov 10 (BestGrowthStock) – After an inauspicious
first half of the year, Europe’s leading insurers have started
raising their 2010 forecasts now that some obvious natural
disaster-related threats have passed.

Germany’s Allianz SE (ALVG.DE: ), Europe’s largest insurer,
indicated on Wednesday that operating profit this year would be
toward the top of its forecast range, while Hannover Re
(HNRGn.DE: ), the world’s third-biggest reinsurer, said record
earnings were in reach in 2010. [ID:nLDE6A81V1] [ID:nLDE6A81T0]

Their improved outlook tallies with comments on Tuesday from
Munich Re (MUVGn.DE: ), the world’s biggest reinsurer, which
raised its 2010 net profit guidance by 20 percent following a
strong third quarter. [ID:nLDE6A71GE]

The sector’s third-quarter updates mark an improvement in
sentiment relative to the first half, when it was clobbered by
an earthquake in Chile and a winter storm in Europe that pushed
damage claim payouts far above average.

Low interest rates, wobbly financial markets and ultimately
unfounded predictions of a devastating summer hurricane season
in the United States also kept investors sceptical about the
sector through much of this year.

The STOXX Europe 600 insurance share index was up 0.4
percent by 1208 GMT, taking its rise to around a fifth since
falling to a low for the year in May, when the European
sovereign debt crisis was at its height.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Europe insurance sector chart: http://r.reuters.com/qeh74q ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CAPITAL QUESTION

The sector’s resilient profits, at a time when insurance
prices remain weak, could bolster expectations that companies
will hand back spare capital to shareholders rather than use it
to write business at historically low margins.

“The message is profitability remains strong, balance sheets
are recovering, but we haven’t got a great deal of clarity about
where management views its capital surplus,” said James Shuck,
an analyst at brokerage Jefferies.

“Capital requirements are coming down because the top line
is shrinking, so you’re in a position where you might as well
pay back all of your earnings.”

Munich Re and London-listed property and casualty insurer
Lancashire (LRE.L: ) are both mid-way through share buyback
programmes, making them the only European insurers currently
returning capital to shareholders.

Uncertainty over the impact of the European Union’s new
Solvency II capital requirements for insurers and persistently
low interest rates, which weigh on investment returns, have
deterred others from following suit, analysts say.

Dutch bancassurer ING (ING.AS: ) underscored growing
confidence in the sector by saying it would offload its European
and U.S. insurance operations via two separate initial public
offerings. [ID:nLDE6A904L]

The group, ordered to sell its insurance arm to win EU
approval for state aid it received during the financial crisis,
said the unit posted a 30 percent rise in profit during the
third quarter.

Elsewhere, Britain’s largest insurer Prudential (PRU.L: )
reported a better than expected 17 percent rise in third-quarter
sales, helped by strong growth in its flagship Asian markets.
[ID:nTOE6A806W]

Swiss Life (SLHN.VX: ) reported premium income rose 20 percent
in the first nine months of the year and earnings at German
subsidiary AWD also grew, increasing confidence that the unit is
on the path to recovery.

Belgium’s Ageas (AGES.BR: ), formerly Fortis, said it was
still expecting a full-year increase in premiums after they rose
17 percent in the third quarter. [ID:nLDE6A908A]

Hannover Re shares were up 4 percent, making it the European
share index’s biggest climber, followed by ING and Ageas which
rose 3.6 percent and 2.1 percent respectively. Allianz was down
1.6 percent.
(Editing by David Holmes)
($1=.7187 Euro)

WRAPUP 2-Insurers eye brighter 2010 with good Q3 under belt