UPDATE 2-Delta Lloyd falls after IPO prices at low end

* Offering totals 1.02 bln euros, or 63.5 mln shares

* Aviva (LSE: AV.L - news) will receive net proceeds of about 1 bln euros

* Delta Lloyd market cap 2.65 bln euros

* Shares down 2.5 pct

(Adds analyst comment, detail)

AMSTERDAM, Nov 3 (Reuters) - Dutch insurer Delta Lloyd's initial public offering priced at the lower end of the expected range due to continued investor concerns over the economic recovery and financial stocks.

The shares fell 2.5 percent shortly after the market open on heavy volume. They priced at 16 euros each, at the low end of a forecast range of 15.5 euros to 19 euros per share.

"There is more uncertainty about financials, which is playing a role here. It's not over yet," said Theodoor Gilissen analyst Paul Beijsens.

The DJ European Insurers index has dropped 10 percent since Oct. 19, partly because breakup fears for state-aided banks has hit financial shares and due to general concerns stocks may have rallied ahead of the recovery. [ID:nL2292207] [ID:nLC728784]

"There is also competition from rights issues. RBS (LSE: RBS.L - news) may come with a capital increase, ING will do it. It's a question of offer and demand but on balance it is positive because Delta Lloyd remains attractive," Keijser Capital analyst Nico van Geest said.

British insurer Aviva will receive the net proceeds of the IPO, which are about 995 million euros ($1.47 billion) based on a minimum 2.5 percent of IPO fees, and excluding a potential over-allotment option of 6.35 million shares.

Last month Aviva, which wants to free up capital and potentially make acquisitions, said it wanted to sell up to 42 percent of existing Delta Lloyd shares. [ID:nLJ701798]

The offering, consisting of 63.5 million shares and totalling 1.02 billion euros, is Western Europe's biggest this year and the second-largest for the whole of Europe, after that of Polish utility PGE, which was worth $2.1 billion [ID:nLR677803].

About 10 percent of the shares were allocated to retail investors in the Netherlands, while the remainder was allocated to Dutch and international institutional investors, Delta Lloyd said. ($1=.6769 euros) (Reporting by Gilbert Kreijger, additional reporting by Daisy Ku in London; Editing by Hans Peters and Mike Nesbit)