* To resume cash dividend of 40-50 percent of insurance profit
* Push for partnerships in Europe, Asia
By Philip Blenkinsop
BRUSSELS, Sept 25 (Reuters) - Fortis will resume paying a dividend, push for partnerships in Europe and Asia and close or divest fringe activities, the Belgian insurer has determined a year after its carve-up.
Fortis, which needs to find a new name by May 2011, said on Friday it would pay a regular cash dividend of between 40 and 50 percent of the net profit of its insurance activities. That was 228 million euros ($335.8 million) in the first half.
The financial services group, pared down to a pure insurer after a state-led break-up, said all businesses had to show they could reach a critical size, contribute to earnings and generate returns exceeding cost of equity -- currently 11 percent.
Chief Executive Bart De Smet told a conference call that Fortis would focus predominantly on Europe and Asia, which represent 70 percent of the world's life insurance market and 53 percent of the non-life.
"We will use our recognised expertise and partnership skills to grow further in a number of markets in these two key areas," he said. "Fortis does not exclude selective acquisitions."
Fortis shares were up 1.3 percent at 3.06 euros at 0835 GMT in a flat Belgian market and against a 0.4 percent increase of the DJ Stoxx European insurance index.
Analysts, for whom Fortis was holding an investor day on Friday, appeared underwhelmed by the news, calling the dividend payout a minimum required and the 11 percent cost of equity optimistic.
"A number of important things still need to be decided," said Bank Degroof analyst Ivan Lathouders, who has a 'reduce' rating on the stock. "Some people may be disappointed by the planned dividend payout."
"We'll have to see how long it lasts," said a trader of the Fortis share's strength.
Fortis' Belgian unit, called AG Insurance, is the market leader in Belgium and among the top 20 biggest in Europe, with a scattering of activities elsewhere, notably in Britain, Luxembourg, Portugal and east Asia.
Fortis is to underwrite motor and household insurance for Britain's biggest retailer, Tesco.
It has also teamed up with French bank BNP Paribas, which owns 75 percent of Fortis' former Belgian banking business, to take a majority state in the non-life insurance unit of Italy's UBI Banca.
Fortis said its current capitalisation was appropriate, with a solvency level of 229 percent, and it intended for that to remain at least 200 percent. The solvency ratio is a measure of the capital available relative to the required minimum.
It also said half of the capital on its general account, some 1.3 billion euros, was discretionary, but it would be retained for the time being. Fortis would not buy back its hybrid instruments, although it has offered to buy 1 billion euros of outstanding debt of its vehicle Fortis Finance.
"We are prudent to avoid one day a problem of liquidity," De Smet said.
Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October 2008 after an 11.2 billion euro cash injection failed to stem the slide of Fortis shares.
BNP Paribas has now taken control of Fortis's Belgian banking arm Fortis Bank and acquired the Fortis brand name. Fortis Bank has a 25 percent stake in Fortis division AG Insurance. ($1=.6790 Euro) (Reporting by Philip Blenkinsop; Editing by Jon Loades-Carter)