UPDATE 3-Baloise H1 net beats forecast, solvency strong

* H1 net profit 235 mln Sfr vs 223 mln in poll

* Combined ratio 90.6 pct vs 92.1 pct expected

* Solvency ratio 209 pct vs end-Q1 180 pct

* Confirms mid-term outlook

* Shares trade up 4 pct, outperforms sector

(Adds shares)

By Jason Rhodes

ZURICH, Aug 27 (Reuters) - Baloise (BALN.VX) posted a forecast-beating first-half net profit as a strengthened solvency position and improved profitability in non-life showed the Swiss insurer had come through the financial crisis in good shape.

Basel-based Baloise Holding AG also confirmed on Thursday its target of achieving a 15 percent return on equity over the insurance cycle and said investment in asset management performed strongly with a net yield of 1.4 percent.

"We are fully on track to meet our goal of becoming one of Europe's most profitable and fastest growing insurers by 2012," Baloise Chief Executive Martin Strobel said in a statement a day after local rival Swiss Life said it was cutting 6 percent of its workforce. [ID:nLP385983]

Analysts Marco Schwender and Martin Koch at private bank Wegelin described the results as "solid" and recommended investors buy the stock.

Baloise shares traded 3.9 percent higher at 0737 GMT at 99.05 Swiss francs, outperforming a 0.4 percent rise in the DJ Stoxx European insurance index.

"The combined ratio and solvency ratio, as well as the investment income are convincing and should please investors," Schwender and Koch said.

The combined ratio, a measure of profitability, in non-life insurance was robust at 90.6 percent, against 92.3 percent a year earlier. The lower the combined ratio number the better, with a reading below 100 percent indicating profitable operations.

Baloise's solvency ratio, a measure of assets over liabilities, strengthened to 209 percent from 180 percent at the end of the first quarter. The higher an insurer's solvency ratio, the less likely it is to default on its debt obligations.

Swiss peers Zurich Financial Services (ZURN.VX) and Swiss Life (SLHN.VX) had solvency ratios of 180 percent and 155 percent, respectively, after six months in 2009.

Net profit came in at 234.6 million Swiss francs ($221.1 million), against an average forecast of 223 million francs in a Reuters poll. (Editing by David Holmes) ($1=1.061 Swiss Franc)