* Has range of options for financing acquisitions
* Confirms targets over cycle
* Sees "substantial" operating result
* Volatile markets make short-term financial forecast tricky
* Close to solution to break-up of Deutscher Ring
By Jason Rhodes and Paul Arnold
BASEL, Switzerland, July 8 (Reuters) - Swiss insurer Baloise would consider large acquisitions and is well placed to emerge from the financial crisis a winner, Chief Executive Martin Strobel said.
"We have an excellent balance sheet compared to many competitors," Strobel said in an interview with Reuters.
"We believe that we are well positioned to come out of the crisis among the winners."
The Basel-based insurer's solid capital base gives it the room to make acquisitions in the markets where it is already active and it has a range of financing options at its disposal, said Strobel.
"A transaction we make can also be big," he said.
He declined to specify further in terms of location or value but said any acquisition would have to fit in in terms of strategy, culture and creating a strong business case.
"Switzerland is also an important market for us and if opportunities arise here, we'll look at them carefully," Strobel said.
Baloise, well diversified geographically and across its businesses, would consider making more than one acquisition to retain the balance of its portfolio.
"We place a lot of value on a very healthy organic strategy," Strobel said. "The subject of M&A adds to this."
Baloise, Switzerland's third-biggest insurer by market capitalisation, still targeted 15 percent return on equity (ROE) and a combined ratio well below 100 percent over the business cycle but could not give short-term goals, Strobel said.
"We have to recognise that we still have very volatile financial markets. This means it is not easy to say how the financial performance will look," said Strobel.
Strobel said the ROE of 9 percent for 2008 was respectable in the crisis, albeit below the company's long-term target.
Baloise, which publishes its half-year results on Aug. 27, reported in March a disappointing 53-percent drop in full-year net profit after an investment writedown of 925 million francs, despite achieving a record combined ratio of 90.9 percent.
A ratio below 100 percent indicates insurance operations are profitable.
"Where we feel very comfortable is the operating performance. That looks really substantial," Strobel said, though insurance claims would likely increase as the effects of the recession became more apparent.
SOLID SOLVENCY
Strobel pointed to Baloise's solvency ratio -- lower than before the crisis but ahead of most European peers at 180 percent -- as proof of the company's stability and capital strength. The higher the solvency number, the less likely a company is to default on its debt obligations.
Strobel was happy with the progress of Baloise's programme to add 200 million Swiss francs ($184 million) to annual net profit by 2012 through organic growth and cost cuts.
He stood by the company's goal of saving 20 to 25 million euros ($28 to $35 million) annually by cutting 230 jobs in Germany, which sparked protests by some employees, and put associated one-off costs at no more than 30 million euros.
The job cuts result from a decision last year to restructure Baloise's German units -- Basler Versicherungen and the life and non-life units of Deutscher Ring -- under uniform management with the same board.
Strobel said Baloise was close to an agreement to disentangle Deutscher Ring health insurance, which recently merged with Signal Iduna, from the Deutscher Ring businesses Baloise owns.
"I see us close to the finishing line on this issue."
The restructuring was important to Baloise's growth plans for Germany, the company's second-largest market, Strobel said, adding that new business had accelerated there despite the market as whole shrinking.
At 0701 GMT, Baloise shares were trading down 0.5 percent at 77.45 Swiss francs, in line with the DJ Stoxx European insurance sector.
(editing by John Stonestreet)