UPDATE 1-Dutch c'bank raises caution for insurers, asset mgrs

* Dutch insurance sector coming under pressure

* Asset managers facing problems of scale

(Updates throughout)

AMSTERDAM, July 10 (Reuters) - Dutch insurers and asset managers face challenges as they are currently structured, while pension funds would benefit from expanding if possible, the Dutch central bank said on Friday.

In a report on the nation's financial system, the DNB said life insurers, while key to retirement planning, are being confronted with substantial structural changes in the market.

These "will put considerable pressure on the insurance sector as it currently exists in the Netherlands," the DNB said.

The report was issued a few hours ahead of an expected report from the Finance Ministry on the future of the banking sector in the Netherlands.

Dutch asset managers, the DNB said, risk being "stuck in the middle" -- not as big as their international competitors but too big in a specialised and competitive market.

"For long-term sustainability, they may need to consider choices about scale and focus," the DNB said.

But while consolidation could be problematic for asset managers, the DNB said it could benefit pension funds, arguing that "significant unrealized economies of scale" exist in the market. (Reporting by Ben Berkowitz; Editing by Victoria Main)