Zurich Insurance sees big hit from winter storms

(Adds new comments, updates shares; refiled to drop 'UK' from headline, modify crosshead)

* Second profit warning in four months

* Estimates $100 mln Q4 loss in general insurance

* Claims from storms, floods in Britain, Ireland (Other OTC: IRLD - news)

* Shares (Berlin: DI6.BE - news) fall more than 9 percent

By Joshua Franklin

ZURICH, Jan 20 (Reuters) - Zurich Insurance (LSE: 0QP2.L - news) issued a profit warning for its general insurance (GI) business on Wednesday, its second in four months, threatening its dividend and underscoring the challenges awaiting the Swiss company's next CEO.

Shares plunged more than 9 percent to their lowest since November 2012 after Zurich warned of an estimated $100 million fourth-quarter business operating loss for GI, largely due to claims from storms and floods in Britain and Ireland.

Last September losses stemming from explosions in China prompted Zurich to abandon a proposed 5.6 billion pound ($7.92 billion) bid for UK insurer RSA.

Bernstein analysts suggested the latest large loss could prompt Zurich to cut its dividend, which was 17 Swiss francs per share for 2014 and is seen as one of the stock's main attractions.

"We see a 60-70 percent chance that the 2015 dividend will be cut," they wrote in a note.

A Zurich spokeswoman said the insurer was committed to paying shareholders a "sustainable and attractive dividend" without elaborating.

Boosting performance in GI, which is Zurich's biggest source of revenue and sells products such as property and casualty insurance, will be central to the insurer's turnaround efforts under a new CEO.

Zurich has been without a chief executive since Martin Senn quit last month after coming under pressure from the botched RSA takeover and a stuttering GI performance.

There has been media speculation that Generali (Swiss: ASG.SW - news) chief Mario Greco is the preferred candidate.

"The profit warning shows that the company has deeper rooted problems," one Zurich-based trader said. "It (Other OTC: ITGL - news) is time that the shaky ship finally gets a new captain."

STORMS

Zurich shares as of 1253 GMT were down 9.1 percent versus a European insurance sector index down 4.1 percent.

Zurich had announced a turnaround plan for GI as part of a wider cost-cutting drive.

It said it now hoped to exceed its $300 million savings target for 2016. This should result in charges of around $475 million in the fourth quarter, primarily from GI, the company said.

"While the 2015 results for general insurance are disappointing, operating performance for both farmers and global life should be in line with expectations, and the group's capital position remains very strong across all key metrics," Zurich said in a statement.

The $100 million quarterly loss in the GI business comes mainly from an estimated $275 million aggregate hit from storms in Britain and Ireland dubbed Desmond, Eva and Frank late last year.

The final costs remain uncertain, Zurich said, but the provisional estimate is more than Direct Line Insurance Group budgeted for last week. Direct Line (Other OTC: DIISD - news) expects up to 140 million pounds in claims from the storm.

"The $275 million UK floods loss is higher than we expected," Bernstein analysts wrote. "As with Tianjin, the loss is much higher than Zurich's market share would imply, which raises questions about Zurich's aggregate liability management."

($1 = 0.7069 pounds) (Additional reporting by Ruppert Pretterklieber; editing by Greg Mahlich and Jason Neely)