Assicurazioni Generali SpA (G.MI) said Wednesday that first-quarter net profit fell sharply from a year earlier, mainly because of the lower value of equity investments, while premiums were steady despite the financial crisis.

The Trieste-based insurer said net profit in the quarter ended March 31 dropped over 88% to EUR104 million from EUR910.3 million a year earlier. Gross equity impairments were EUR1.5 billion in the first quarter, the insurer said.

Generali said it was unable to provide reliable guidance for the rest of the year, citing the ongoing economic crisis.

In order to boost its profit in recent years Generali has been carefully expanding its operations in markets with higher growth potential such as Central and Eastern Europe, India, China and United Arab Emirates.

In the quarter, gross premiums were unchanged at EUR18.5 billion. Life premiums fell 1% to EUR11.9 billion and non-life rose 3.5% to EUR6.6 billion, the company said, confirming figures announced by the chairman at the company's annual general meeting in April.

Generali said that its combined ratio, a key industry figure that compares costs and claims to premium income, rose to 96.3% from 93.1%.

Generali shares have underperformed the Italian S&P Mib index. Since the beginning of the year, Generali stock has lost about 14%. At 1500 GMT, the shares were down 4.8% at EUR16.17 in line an overall negative market.

Generali ranks third among European insurers in market capitalization after Germany's Allianz SE (AZ) and France's Axa SA (AXA).

Company Web site: http://www.generali.com

-By Sabrina Cohen, Dow Jones Newswires, +39 02 5821 9906; sabrina.cohen@dowjones.com