UPDATE 2-Hannover Re upbeat about 2011, barring disasters

* Q2 net profit beats consensus, operating profit misses

* Says on track to reach 500 mln net profit in 2011

* Exposure to euro zone periphery countries 1 pct of AuM

* Says U.S. debt still highly rated even after downgrade

* Share down 4 pct, Europe insurance index down 1.6 pct

(Adds CFO, analyst comment)

FRANKFURT, Aug 8 (Reuters) - Hannover Re (HNRGn.DE) predicted it would comfortably reach its 2011 profit target, barring extraordinary damage claims and with only limited impact seen from the U.S. and euro zone debt crises.

The world's third-biggest reinsurer also unveiled forecast beating second-quarter net profit of 166 million euros ($234 million) on Monday. This was up about 4 percent from a year earlier and compared with analysts' expectations for a 4 percent fall.

While big disaster claims from earthquakes in Japan and New Zealand left their mark earlier this year, forcing Hannover Re to abandon its initial 650 million euro net profit target, the company on Monday said it was confident of reaching the less ambitious goal it set for itself in May.

"Our Group net income ... for the first half-year should enable us -- given a normal experience in the second half of the year -- to comfortably attain our targeted year-end profit of around 500 million euros," Hannover Re Chief Executive Officer Ulrich Wallin said in a statement.

The target assumes that major claims will not exceed 295 million euros in the second half if the year, the company said.

Hannover Re also avoided the writedowns on Greek government debt that tripped up some major insurance players like Munich Re (MUVGn.DE) and Allianz in the second quarter.

Those insurers wrote off about half the value of their holdings of Greek government debt, crimping earnings.

In contrast, Hannover Re had no exposure to Greece and no writedowns in the second quarter.

Chief financial officer Roland Vogel said the company's exposure to debt-saddled euro zone periphery of Portugal, Ireland, Italy and Spain totalled 254 million euros or around 1 percent of Hannover Re's assets under management.

Vogel also played down the potential impact of Friday's downgrade of the United States' AAA credit rating by Standard & Poor's.

Hannover holds about 2.3 billion euros or 10 percent of its investment portfolio in U.S. sovereign debt.

"The concrete effects of this downgrade are very limited for us," Vogel told a conference call with journalists, adding that even after the downgrade, U.S. debt remained highly rated and Hannover may benefit from a subsequent pickup in yields from new debt issued by the United States.

"There is no reason to doubt that the U.S. will service its debt," Vogel said.

Operating profit came in below expected following the company's move to strengthen reserves for disability business in Australia, which undermined performance in Hannover's life and health reinsurance business segment.

"Despite a somewhat disappointing EBIT, net profit was slightly better than expected because of a very low tax ratio," DZ Bank analyst Thorsten Wenzel said in a research note.

Hannover Re's share was trading 4.34 percent lower by 0955 GMT, lagging a 1.56 percent fall in the Stoxx Europe 600 insurance index .

Hannover Re, in which insurer Talanx has a 50.2 percent stake, trades at 6.5 times 12-month forward earnings, a discount to the world's top two reinsurers, Munich Re and Swiss Re , which trade at multiples of 8.6 and 9.3 times, respectively, according to Thomson Reuters StarMine, which weights analysts' forecasts according to their track record. ($1=.7099 Euro) (Reporting by Jonathan Gould; Editing by Hans-Juergen Peters)