Zurich sticks to financial goals after setbacks

* Q3 net profit $207 mln vs $196 mln Reuters poll average

* General insurance combined ratio 108.9 pct

* Says expects to meet or exceed financial targets in 2016 (Adds analyst comment, detail, shares)

By Joshua Franklin

ZURICH, Nov 5 (Reuters) - Zurich Insurance (LSE: 0QP2.L - news) stuck to its financial targets despite a steep profit decline in a traumatic quarter when it abandoned the planned takeover of Britain's RSA and suffered losses from explosions in the Chinese port of Tianjin.

Modest job cuts are among its responses to boost returns at its general insurance business.

Losses in general insurance, which is Zurich's biggest source of revenue and sells things like property and casualty insurance, was the main cause of a 79 percent year-on-year fall in quarterly net profit.

The $207 million third-quarter net profit was at least slightly above the average estimate for $196 million in a Reuters poll of eight analysts.

The company warned on profit in September because of the impact of the devastating blasts in Tianjin, at the same time as it ditched plans to buy RSA.

Reporting its third quarter results on Thursday, British insurer RSA said it was not looking to be taken over as it reported a 4 percent rise in net asset value.

Zurich said it had now concluded a review of the general insurance business under the unit's new boss Kristof Terryn.

It (Other OTC: ITGL - news) is evaluating options to use reinsurance to reduce earnings volatility and will no longer write new policies in two portfolios in the global corporate market, including part of the U.S (Other OTC: UBGXF - news) . transportation business.

It also plans to cut around 200 jobs by the end of the year, a small part of a workforce of around 55,000.

"We have the right actions under way to address the issues in our GI (general insurance) business, and I am confident we will achieve or exceed each of our three targets in 2016," group Chief Executive Martin Senn said.

Its 2014-2016 targets are for cumulative cash remittances of more than $9 billion over the three-year cycle, a business operating profit after-tax return on equity of 12-14 percent and a Zurich-Economic Capital Model ratio of between 100-120 percent.

Its general insurance combined ratio for the quarter was 108.9 percent. A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.

J. Safra Sarasin analyst Javier Lodeiro said the results and review were broadly positive but that Zurich needed to improve its track record on delivering on earnings expectations.

"Really the long-term issue is the earnings track record," said Lodeiro, who has a "neutral" rating on the stock. "That's something the company needs to work on."

After rising by as much as 2.8 percent Zurich shares pared gains to trade up 0.5 percent at 1140 GMT. The European insurance sector index was flat.

(Reporting by Joshua Franklin; Editing by Anand Basu and Michael Shields)