Swiss Life warns on profit as Q3 premiums fall

* Swiss Life Q3 premiums down 11 pct

* Warns on FY net profit

* Halts share buyback programme

* No longer assumes dividend of 600 mln Sfr

(Adds details)

By Jason Rhodes

ZURICH (Reuters) - Insurer Swiss Life (SLHN.VX) said third-quarter premium volumes fell 11 percent to 3.075 billion Swiss francs ($2.61 billion) and warned it would not meet its full-year net profit guidance.

Swiss Life, Switzerland's third-largest insurer behind Zurich Financial Services (ZURN.VX) and Swiss Re (RUKN.VX), said on Wednesday it halted its share buyback programme.

Swiss Life and other insurers have struggled as the financial crisis has bitten into investment income and premiums, leading the company to say it no longer assumes its dividend will be 600 million francs.

The insurer now expects to report a clear full-year loss on continuing operations but said it would post extraordinary gains of 1.5 billion francs from disposals.

"The pronounced intensification of the financial crisis since the end of September, however, means that we cannot confirm our earnings guidance for 2008," Chief Executive Bruno Pfister said in a statement.

It will also miss the guidance it gave in August of 1.8 to 1.9 billion francs in full-year net profit due to the sharp fall in financial markets since the end of September.

However, Swiss Life said it still has a good capital base even taking recent events into account, adding that it reduced its equity exposure to below 1 percent in October and significantly reduced its hedge fund risk.

Its solvency ratio was 150 percent at Sept 30, at the level the company considers comfortable for maintaining operations.

Swiss Life currently trades at about five times forecast 2009 earnings, just behind the average of the European insurance sector .SXIP.

(Editing by Mike Nesbit)