UPDATE 1-Baloise H1 net beats poll on stronger sales

* H1 net profit 213.5 mln Sfr vs 194 mln poll average

* Combined ratio 90.2 pct vs 95.8 pct in poll

* Solvency ratio 234 pct vs 230 pct end-2009

* Confirms target of 15 pct ROE over insurance cycle

(Adds details)

ZURICH, Aug 26 (Reuters) - Baloise's (BALN.VX) first-half net profit beat forecasts on strong investment income growth and a 24.5 percent rise in business volumes, Switzerland's fifth-biggest insurer said on Thursday.

Net profit came in at 213.5 million Swiss francs ($207.3 million), 9 percent lower than a year ago when a one-off tax effect boosted the bottom line, the Basel-based insurer said, beating an average forecast of 194 million in a Reuters poll.

"Costs in the whole group are sinking noticeably. We are on track to reach our goal of becoming one of the most profitable and fastest-growing insurers in Europe by 2012," said Baloise CEO Martin Strobel.

The combined ratio, a measure of profitability in non-life insurance operations, improved to a very strong 90.2 percent from 90.6 percent a year earlier. The lower the combined ratio number the better, with a reading below 100 percent indicating profitable operations.

Baloise also confirmed its target of achieving a 15 percent return on equity over the insurance cycle and sustainably increasing earnings by 200 million francs by 2012.

Baloise's solvency ratio, a measure of assets over liabilities, strengthened to a healthy 234 percent from 230 percent at the end of 2009. The higher an insurer's solvency ratio, the less likely it is to default on its debt obligations.

(Reporting by Jason Rhodes; Editing by Michael Shields)