* Q2 net insurance profit 195.2 mln euros vs poll 159 mln
* Plans 250 mln euro share buy-back
* Sells UK life business, ups Italian non-life stake
* Shares rise 4.4 pct, top gainers in Europe (Adds shares, analyst comment, overall profit)
By Philip Blenkinsop
BRUSSELS, Aug 6 (Reuters) - Belgian insurance company Ageas beat second-quarter profit expectations due to a sharp rise in income from its life business and announced a new 250 million euro ($334.1 million) share buy-back.
Ageas, the successor to bailed out and broken up Belgian-Dutch group Fortis, said on Wednesday that higher capital gains and increased investment inflows, especially in China and Luxembourg, had boosted earnings of its life insurance business.
This more than offset its non-life insurance activities, which took a 24 million euro hit due to a June hailstorm in Belgium.
Ageas shares rose as much as 4.4 percent to 27.00 euros and were by far the strongest performers in the FTSEurofirst 300 index of leading European stocks, although this follows a near 13 percent drop last week after a Dutch court ruled it should compensate former Fortis shareholders.
“They had higher financial results, meaning they invested well,” Bank Degroof analyst Dirk Peeters said. “The share buy-back is a clear sign of confidence.”
Net profit from insurance operations rose 14 percent to 195.2 million euros, well above the 159 million euro average forecast in a Reuters poll, even when excluding a 23 million euro Belgian tax credit.
Ageas said its board had decided to start a new 250 million share buy-back programme running until July 21, 2015. The company completed a 200 million euro share buy-back programme in the past year.
It said the new programme was possible even though it had set aside 130 million euros that it may need to pay compensation after a Dutch court ruled last week that Fortis had misled its shareholders after its initial bailout in September 2008.
The move came despite a call on Tuesday by the lawyer representing former Fortis shareholders urging Ageas not to suspend dividend payments or take similar action, such as buying its own shares.
Including that provision, Ageas’s overall net profit was 0.7 million euros, down from 178.6 million euros a year earlier, but the figure compared favourably with an expected loss of 34 million.
Ageas also said it had agreed to sell its life insurance activities in Britain, called Ageas Protect, to AIG for 181 million pounds ($305.2 million), allowing the company to focus on its non-life British business, such as home and motor cover for supermarket group Tesco.
It also announced on Wednesday an agreement with BNP Paribas Cardif to take full control of Italian non-life player UBI Assicurazioni from UBI Banca. ($1 = 0.7482 Euros) ($1 = 0.5930 British Pounds) (editing by Jane Baird)