* Nine-month sales up 4 pct on emerging market growth
* Expects FY combined ratio of below 96 pct
* Shares down 0.4 pct
LONDON, Nov 8 RSA, Britain's biggest commercial insurer, reported a 4 percent increase in sales for the first nine months of this year, with strong progress in fast-growing emerging markets offseting stagnation at home.
Revenues in Latin America, where RSA ranks as Chile's No.1 property insurer, rose 13 percent in the nine months to Sept. 30, the company said on Thursday.
That outweighed flat sales in RSA's core British and European markets, where it has been writing less business to preserve profits amid faltering economic growth and falling prices.
RSA is looking for small acquisitions to expand overseas and counterbalance weak demand in Europe, but has said it is not interested in big deals that would require external financing.
Shares in RSA, best known in Britain for its More Than home and motor insurance business, were down 0.4 percent by 1310 GMT.
The stock has risen 6.6 percent since the start of the year, lagging a 16 percent increase in the FTSE non-life insurance index.
The company's sluggish sales could weigh on profits and put its dividend, among the highest in the British insurance sector, under pressure, Investec analyst Kevin Ryan wrote in a note.
RSA shares offer a dividend yield of 8.2 percent compared with 7.9 percent and 3.8 percent respectively for rivals Aviva and Admiral, according to Thomson Reuters Starmine.
In February, RSA raised its 2011 dividend by 4 percent, less than the 5.2 percent expected by analysts.
RSA said it expected to deliver a combined ratio - claims and costs as a proportion of revenues, a key profit indicator - of less than 96 percent for the year as a whole, compared with 94.9 percent in 2011.