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* Q1 pretax profit up underlying 20 pct to 81.4 mln eur
* Combined ratio improves to 97.8 pct
* Reiterates forecast for significant profit gain (Adds quotes and background, market reaction)
VIENNA, May 23 (Reuters) - Austrian insurer Uniqa stuck to its forecast for a significant gain in 2014 profit, noting its business in Ukraine and Russia was growing despite the political crisis between the two countries.
"We have felt no adverse effects on business to date from the current political crisis in Ukraine," Chief Executive Andreas Brandstetter said.
First-quarter group earnings before tax fell 30.3 percent to 81.4 million euros ($111.2 million), but rose by a fifth excluding a gain of 49.1 million euros a year ago from selling hotel assets, the company said on Friday.
Premiums written rose 2.3 percent to 1.70 billion euros.
Profits from Ukraine grew to 3.3 million euros in the first quarter from 2.3 million a year earlier. Russian profits grew to 4.1 million from 2.9 million last year.
Brandstetter said that Uniqa's position in Ukraine remained stable despite the turmoil because most of its business is located in the west, away from conflict hot spots in the east.
"More than 70 percent of our business is in western Ukraine," he said. "We are number two in Ukraine, which is one of our immense growth markets."
Its insurance contracts also exclude damages caused by war, which further shields it from the conflict, he said.
Uniqa's positive outlook for 2014 is contingent on natural disasters remaining in a normal range. It said it could not yet estimate the hit it faced from widespread Balkans flooding, but saw damages in Austria of around 5 million euros.
Brandstetter said there had been relatively few claims so far from Bosnia and Serbia, where the flooding has been particularly acute. Uniqa is the second-largest insurer in Bosnia and fifth-biggest in Serbia.
"There will certainly be a negative impact in these two countries, but I can not yet quantify how much it will be," he said.
Uniqa's combined ratio, a measure of profitability in the property and accident segments, improved to 97.8 percent from 98.3 percent a year earlier.
Uniqa shares gained 1.7 percent to 9.224 euros by 0837 GMT.
Berenberg analyst Sami Taipalus noted that weather had been relatively benign during what is seasonally a difficult quarter, while large losses were stable.
"We continue to like the shares," he said in a note to clients, forecasting 20 percent compounded annual growth in pretax profit from 2013 to 2016, driven by extensive restructuring.
$1 = 0.7323 Euros Reporting by Angelika Gruber, writing by Derek Brooks, Editing by Michael Shields