Topdanmark Q2 better than expected, cuts outlook

COPENHAGEN (Reuters) - Denmark's second-largest insurer, Topdanmark (TOP.CO), posted a smaller-than-expected 37 percent drop in second quarter net profits, but cut its full-year outlook due to turbulent capital markets.

The insurer posted net profits of 243 million Danish crowns ($47.92 million) against 385 million crowns in the same quarter last year. The average forecast was for profit of 152 million in a Reuters poll.

"The technical result of non-life insurance was slightly better than assumed," the insurer said in a statement.

"While the life insurance result was in line with the assumptions and the investment return substantially lower than assumed," the company said.

By 1045 GMT shares in Topdanmark had gained 1.0 percent outperforming the Copenhagen blue-chip index which was down 1.0 percent.

The group said its combined ratio -- a measure of claims against insurance underwriting income -- remained at 85 percent in the quarter, unchanged from the same period in 2007. A number under 100 means an insurer is profitable in its underwriting.

The company upgraded its combined ratio outlook to 88 percent from 'just over 88 percent'.

Topdanmark cut its full-year profit outlook of net earnings to 450-550 million crowns from 750-850 million crowns previously.

(Reporting by Rasmus Nord Jorgensen; editing by Elaine Hardcastle)