UPDATE 2-Swiss Life first-quarter premiums slip as wealth division hit
* Q1 premium income down 1 pct from year earlier
* Premiums at high-net worth unit fall 41 pct
* CFO cites "uncertainties" in cross-border private banking
* Income from Swiss market rises by 7 pct (Updates with share price, adds analyst, CFO comment)
ZURICH, May 13 (Reuters) - Swiss Life on Tuesday reported a 1 percent fall in overall premium income in the first quarter and its division that manages wealthy people's money reported a steep drop in sales.
Switzerland's biggest dedicated life insurer said income from its high net worth business fell 41 percent to 404 million Swiss francs ($455 million). Overall premium income totalled 6.9 billion francs in the quarter, down from 7 billion in the same period last year.
The high net worth arm sells products known as insurance wrappers, or Private Placement Life Insurance (PPLI), into which the very wealthy place stocks, private equity holdings and other bankable assets, allowing them to lower their tax rates.
There has been speculation that some Swiss insurers could become caught up in a U.S. Justice Department investigation into whether wealthy Americans avoided taxes using Swiss bank accounts.
"The development in our high net worth individual business was a result of uncertainties around the cross-border private banking environment," Chief Financial Officer Thomas Buess told investors and analysts.
Swiss Life had ceased to write new business for clients based in the United States in 2012 and the company reiterated on Tuesday that it did not expect to be caught up in the investigation.
"We have at this stage no indication that there could be any legal procedures in line with this book," Buess said. "Of course you could never exclude this, but at this stage there's no news."
There are currently 14 Swiss bank under formal investigation for their dealings with U.S. clients and untaxed assets. Swiss Life said it had not been approached by U.S. authorities for information.
Shares in Swiss Life were 2.9 percent lower at 212 francs by 1140 GMT, making it the weakest performer in the European insurance index.
Before the results, shares in Swiss Life had risen by almost 18 percent since the start of the year, outperforming the broadly flat insurance index.
"International, which comprises the PPLI and corporate business, is relatively volatile in nature and we would not read too much into one quarter," Helvea analyst Daniel Bischof wrote in a note.
Premium income in Switzerland, Swiss Life's largest market, provided a bright spot, rising 7 percent to 4.9 billion francs. The company said this was driven by strong demand in its pension fund business from small and medium-sized businesses and growth in individual life business.
Its second-biggest market, France, reported a 4 percent fall to 1.2 billion francs, while Germany dropped 14 percent.
"The first-quarter statement will be taken as a disappointment because of the weak international business," Zuercher Kantonalbank analyst Georg Marti said. He rates the stock at "overweight."
The group's solvency ratio - a measure of an insurer's ability to meet future claims - strengthened by 16 percentage points from its year-end level to 226 percent.
($1 = 0.8878 Swiss Francs) (Reporting by Joshua Franklin; Editing by Kenneth Maxwell and Jane Merriman)