UPDATE 2-HSBC's Bannister steps down as head of insurance

To step down on March 31

Will be replaced by HSBC veteran David Fried

Fried is currently head of insurance for Asia Pacific (Adds quotes, background)

LONDON, Feb 23 (Reuters) - HSBC's head of insurance, Clive Bannister, plans to step down at the end of March and will be replaced by Asia boss David Fried, in fresh evidence the bank's focus is increasingly shifting to the east.

Bannister, who took the helm of the insurance business in November 2006, was previously chief executive of HSBC's private banking business and before that, head of investment banking at HSBC Securities, overseeing the debt and equity securities business in the Americas.

Bannister, 51, told Reuters his successor would be a HSBC veteran of more than two decades, Fried, currently head of HSBC Insurance for Asia Pacific.

He described the move as "early retirement" and denied he had failed to deliver on HSBC's ambitious goals for its insurance arm.

"Our ambitions were, in 1,000 days, to do a turnaround for the business and to build three things -- we wanted to do bancassurance, to make it world class, and we wanted to make sure one in five of the group clients were touched by insurance," Bannister said in telephone interview, referring to the plan at the time he took over four years ago.

"We believe we have one of the world's largest bancassurers, we have certainly touched one in five of our clients with insurance products and being world class is a journey that never ends. I have done my job."

Since 2006, HSBC has been pushing to bulk up its insurance business and said at the time it aimed to double the contribution made by insurance to group profits in roughly five years. In 2008, insurance contributed $2.6 billion, almost 30 percent of a total group pre-tax profits, but group profits were down over 60 percent because of heavy writedowns.

HSBC's insurance business includes direct, reinsurance, life and general insurance.

Bannister -- son of British athlete Roger Bannister, famous for being the first man to run a mile in under four minutes -- was also a special advisor to former chairman John Bond over a decade ago, when he developed a plan to boost HSBC's position, lifting shareholder return in terms of profits and share price.

HSBC were not immediately available for comment. (Reporting by Clara Ferreira-Marques and Steve Slater; Editing by Jon Loades-Carter)

REUTERS