Generali H1 down 18 percent, writedowns weigh

MILAN (Reuters) - Europe's fourth-biggest insurer Assicurazioni Generali (GASI.MI) turned in an 18 percent fall in first-half net profit to 1.46 billion euros ($2.28 billion) on Thursday, in line with the average forecast in a Reuters poll.

The Italian insurer, hit by writedowns on its investment portfolio of 905 million euros, said in a statement operating profit fell 12.9 percent to 2.5 billion euros ($3.91 billion).

It is the first fall in net profits for Generali since 2002 when it made a loss of 754 million euros, hit then as now by slumping markets.

Chairman Antoine Bernheim said in the statement poor markets in the first half and "the ever more uncertain outlook for the balance of the year make it difficult to give a reliable prediction for the end of 2008."

Generali said APE, an indicator of the health of its life business, was up 21.5 percent in the first half at 2.66 billion euros while its total new business value was up 15.5 percent at 617 million euros.

Analysts had forecast on average operating profit of 2.36 billion euros and net profit of 1.46 billion euros.

The turmoil in world markets has caught up with insurers and reinsurers who are faced with taking investment losses on their profit-and-loss accounts, to meet international accounting standards.

Last week, German reinsurer Munich Re (MUVGn.DE) warned its 2008 profits would be hit by steep falls in share and bond prices.

Generali said in slides for an analysts' presentation at 1300 GMT that its total exposure to structured finance was 1.83 billion euros.

Shares in Generali were down 0.66 percent at 22.46 euros after the results were published. The stock has fallen 25 percent this year, in line with others in the sector.

(Reporting by Jo Winterbottom; editing by Sue Thomas)