Swiss Re sees insurance industry sales rising

* World economic recovery should boost life sales - study

* Life segment premiums fell in 2009, non-life flat

* Significant profit improvements seen as difficult

ZURICH, June 29 (Reuters) - Overall insurance industry sales should rise this year as the improving world economy boosts spending on life insurance after it flagged during the crisis, according to a study from Swiss Re on Tuesday.

The industry's profitability and capital have recovered significantly but have yet to reach pre-crisis levels, the world's second-largest reinsurer said in the study, based on results and estimates from 159 insurance markets.

"Overall premium growth in the industry will turn positive in 2010 and the industry's profitability and capital should continue to improve," said Daniel Staib, one of the study's authors. "If financial markets continue to recover, the hard-hit unit-linked business will also show a strong upward trend."

World insurance premium volume fell 1.1 percent on an inflation-adjusted basis in 2009, with life premiums down 2 percent and non-life sales flat, Swiss Re said, adding non-life insurance growth should resume in industrialised countries.

Premium growth in emerging markets slowed but remained positive, the study found.

"Given the strong competitive pressures in the insurance industry, it will be difficult to improve profitability significantly," Staib said.

"Besides the rise in premium rates, what is needed to bring the primary non-life insurance industry back to adequate profitability levels is the expected rise in interest rates in the medium term." (Reporting by Jason Rhodes; Editing by Sharon Lindores)