Generali says 2009 targets no longer valid

* 2009 targets "overtaken by events"

* Shares down 2.65 percent

* Technical performance should see further improvements

* Consensus estimates already below company targets

(Adds analyst comments, updates share price)

MILAN (Reuters) - Italy's biggest insurer, Assicurazioni Generali (GASI.MI), said its 2009 targets were no longer valid because of deteriorating markets and volatility, and that it would wait for more market stability to set new ones.

In a statement on Thursday, the company said its 2009 targets had been formulated in a completely different environment and had been overtaken by events.

"Given the uncertainty over the evolution of the crisis, it has decided to wait for greater economic and market stability before setting new targets," the statement said.

By 1459 GMT, its shares were down 2.7 percent at 19.09 euros, having given up light gains before the announcement.

The DJ Stoxx index of European insurers .SXIP was down 1.49 percent.

Generali set its 2009 targets in September 2007. They included a profit of 3.8 billion euros and an operating profit of 6.5 billion, along with a combined ratio -- a measure of profitability -- below 95 percent.

At that time, it also said it aimed to double its total dividend payout in 2009 from the 2006 level, which was 955 million euros along with a one-for-10 scrip issue of shares.

"It was no enormous surprise since most of the market has already cut its 2009 estimates to well short of 3.8 billion euros," said Charles Graham, an analyst at ING.

"The worrying thing perhaps is that they have given no guidance at all at this stage," Graham said.

Reuters consensus estimates are for net profit, under GAAP accounting standards, of 2.66 billion euros in 2009.

Dividend per share is expected to be 0.98 euros in 2009 and for 0.88 euros on this year's results, the consensus estimates showed.

Insurers have suffered from market turmoil because it has hit the value of their investments and triggered writedowns, which have hurt profits.

Generali took an extra 2 billion euros of writedowns in the first nine months of 2008 and its profits in the period slid 29.4 percent, it said when it announced the results in October.

The insurer said it would wait for greater economic and market stability before setting new targets. It confirmed a Solvency II ratio of 185 percent for year-end 2008.

Generali said that technical performance should see further improvements in 2009 and premium growth should outperform reference markets.

(Reporting by Jo Winterbottom; Editing by David Holmes and Andrew Macdonald)