Low rates worry Generali more than Brexit

(Recasts lead, adds CFO comments)

MILAN, May 12 (Reuters) - Generali (Swiss: ASG.SW - news) , Europe's third largest insurer, shrugged off concerns about a possible British exit from the European Union, with persistently low interest rates more of a headache.

Brexit has become a cause of concern for banks and insurers because of the disruption it could trigger in Europe's financial industry should Britain vote to leave the EU in a referendum next month.

But low interest rates and pressure on prices are making it more difficult for insurers across Europe to keep up earnings growth.

Generali said its operating profit fell 12 percent to 1.163 billion euros ($1.33 billion) in the first three months of the year, depressed by weak interest rates and fewer capital gains.

The results was below a Reuters poll of five analysts of 1.205 billion euros.

Chief Financial Officer Alberto Minali said the insurer's sterling exposure accounted for less than 2 billion euros of managed assets out of a total of 440 billion euros, adding the company had no major operations inside Britain.

"We are analysing this event .. but there are no concrete plans," CFO Alberto Minali said in a call with reporters, referring to a possible vote for Brexit.

At 0819 GMT Generali shares were down 5 percent at 12.46 euros while the European insurance sector was down 1.2 percent.

"The decrease in the operating result and net profit is mainly driven by the decision to realise a lower level of gains on our investments considering the current adverse market conditions," Minali said.

Generali, which is Italy's largest insurer and has nearly 80,000 staff, will focus on driving down costs to boost profitability in the future, he added.

"The industry will continue to struggle given lower returns, in particular for Life companies and more efficiencies may be needed to support their financial targets," a Milan broker said.

Minali said it was too early to say how the second quarter might develop but operating profits in April were good, adding there were no signs of deterioration.

The adverse market conditions impacted Generali's economic solvency ratio, which fell to 188 percent from 202 percent end 2015.

Minali said the group would stick to its business plan targets introduced before Philippe Donnet took over as CEO earlier this year following the departure of Mario Greco to Zurich Insurance Group AG.

Zurich said on Thursday it had returned to profit in the first three months of 2016, helped by better-than-expected earnings from its general insurance business. ($1 = 0.8759 euros) (Reporting by Stephen Jewkes; Editing by Keith Weir)