WRAPUP 2-European insurers wary on 2010 outlook

+ Allianz ups dividend 17 percent, Trygvesta buys back shares

+ Aegon, RSA, Trygvesta beat 2009 profit forecasts

+ Allianz, Aegon, Trygvesta shares outperform index (Updates to include Trygvesta results)

By Gilbert Kreijger and Myles Neligan

THE HAGUE/LONDON, Feb 25 (Reuters) - Four big European insurers were wary about their prospects this year, despite meeting or beating forecasts for 2009, saying they face continued challenges due to at-best tepid economic growth.

Dutch life assurer Aegon, British commercial insurer RSA and its Danish rival Trygvesta all beat analysts' profit forecasts on Thursday, while European sector leader Allianz broadly met expectations.

But all four were hesitant to forecast a good year ahead amid concerns of weak sales growth and sluggish investment returns as Europe struggles to emerge from recession.

"Although the headline numbers are better than expected (for Allianz and RSA), the outlook is reasonably cautious, and brings it into line with where consensus already is for 2010," said James Shuck, analyst at brokerage Jefferies.

"I don't think you'll see a huge amount of upgrades following the numbers."

Shares in Aegon touched a three-week high of 4.59 euros earlier on Thursday before falling back to stand 1 percent higher at 4.45 euros by 1515 GMT, outperforming a 1.6 percent decline in the European insurance index.

Trgvesta was up 5.6 percent as investors welcomed news it plans to buy back 1 billion crowns ($181 million) of its shares, while Allianz rose 0.3 percent and RSA fell 1.4 percent.

PAYOUT PRESSURE

Allianz and RSA attempted to temper any disappointment over the muted outlook with dividend increases of 17 percent and 7 percent respectively.

However, Aegon said there would be no shareholder payout for 2009, citing a persistently high level of impairments and an "uncertain environment."

"It is still a difficult environment. We have clearly seen an improvement compared to a year ago. But what we see is that unemployment is high in all the countries. Consumer confidence is still not where it could be," Aegon Chief Executive Alex Wynaendts told reporters.

Insurers are struggling against low growth and high unemployment in developed markets, which dampens sales of property-casualty and life and health insurance policies.

Allianz said the tough economic climate would probably choke off any growth in its 2010 operating profit.

"Given the still volatile market environment, it is impossible to give a precise forecast," Allianz Chief Executive Michael Diekmann said.

RSA, Britain's biggest commercial insurer, said it should be able to deliver "excellent" results in the future, but signalled that its 2010 combined operating ratio -- claims and expenses expressed as a proportion of revenue, a key profit driver -- would be little changed from last year.

Denmark- and Sweden-focused Trygvesta echoed the cautious tone, warning that rapidly increasing claims expenses would cap pretax profits at around 1.6 billion crowns this year, unchanged from 2009.

Some companies, including AXA of France, Switzerland's ZFS and Britain's Aviva, earlier this month said they were guardedly optimistic for 2010 with Axa and ZFS underlining their confidence with bigger-than-expected dividend increases. (Additional reporting by Jonathan Gould in Munich; Editing by Rupert Winchester)

REUTERS