UPDATE 2-Generali sees Q1 net profit up, aims to grow abroad

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By Claudia de Lillo

TRIESTE, Italy, April 28 (Reuters) - Italy's biggest insurer, Generali , expects to post a 20 percent rise in net profit in the first quarter and aims to grow abroad to fend off possible takeover bids, its top executives said on Saturday.

"Based on the data that we have, we should close the three months with the profit rising 20 percent," Giovanni Perissinotto, one of Generali's two chief executives, told the shareholders meeting.

Generali made a 598 million euro ($814.1 million) net profit in the first quarter of 2006.

Perissinotto said the insurer would report a more than 3.5 percent rise in non-life insurance premiums and an improved combined ratio in the first quarter, as well as strengthen its role in the life insurance business.

Generali's chairman, Antoine Berheim, said Europe's third-largest insurer -- whose market capitalisation of about 43 billion euros pales by comparison with the French AXA's 70 billion euros -- should grow to remain independent.

But Generali cannot grow at home for antimonopoly reasons.

"To safeguard the group's independence, the management should proceed with operations aimed at organic and external growth abroad, because we are not allowed to grow in Italy," Bernheim told shareholders.

Generali, which aims to expand in central and eastern Europe, unveiled on Thursday a preliminary deal with Czech group PPF to form a joint venture to control Ceska Pojistovna, the biggest life and non-life insurer in the Czech Republic.

Bernheim said Generali would consider a share issue to pay for an "interesting" acquisition if such opportunity came up, but there were no share issue plans on the table at the moment.

He said the management to have a mandate for an at least 20 percent capital increase in the next 4-5 years.

Shareholders at Generali approved a slightly renewed board on Saturday that included the three existing top executives -- the chairman and two chief executives.