* Hit by money set aside for long-term liabilities in Germany
* CFO confident no similar issues elsewhere in general insurance
* Q3 net profit $477 mln vs $756 mln in poll
* Shares down 4 pct, underperform sector index (Releads, adds analyst comment on dividend, shares)
By Catherine Bosley
ZURICH, Nov 15 Zurich Insurance Group recorded a bigger-than-expected fall in third-quarter net profit after a blow to its German general insurance business, sending its shares to a three-month low on Thursday.
A reassessment of the German operation's loss reserves drove down net profits by $400 million, while a weak investment result and crop losses caused by drought in the United States also took their toll.
Insurance claims, such as cases involving long-term illness or medical negligence, are sometimes not made for years after a policy has expired. Zurich's German arm had to set aside more money to cover these so-called "long tail" liabilities.
Zurich's third-quarter net profit fell 62 percent to $477 million, below an average estimate of $756 million in a Reuters poll of analysts.
The company's shares fell to their lowest level since early August and were trading down 4 percent at 222.5 Swiss francs ($240) a share at 0838 GMT, underperforming a 0.8 percent drop in the sector index.
Zurich is beloved by investors for its juicy dividend. Last year it amounted to 17 francs per share, one of the highest among Switzerland's blue-chip companies.
Despite the disappointing quarter, analysts still clung to the hope of a good payout for this year.
"The dividend remains the primary reason for owning Zurich here, and we think that looks OK for now," said Andy Broadfield, a member of the European equity research team at Barclays.
Analysts were also cheered by comments from Chief Financial Officer Pierre Wauthier, who said that the trouble in Germany was an isolated case.
"Zurich is confident that there are no similar issues of significance elsewhere in general insurance," he said.
General insurance is Zurich's biggest area of business. In that segment its combined ratio - a measure of underwriting profitability - worsened to 102.8 percent in the third quarter.
That means Zurich's general insurance underwriting business was not profitable during the period. ($1 = 0.9461 Swiss francs)
(Editing by Hans-Juergen Peters and David Goodman)