* Q2 net down 69 pct to 362 mln zlotys ($115.1 mln)
* Flood-related losses reach 549 mln zlotys
* CEO sees 2010 net profit below 2.8 bln zlotys
(Releads with forecast, adds CEO comments, shares)
By Chris Borowski and Maciej Onoszko
WARSAW, Aug 26 (Reuters) - PZU said it expects its earnings to fall by at least a quarter this year after floods and depleted capital pushed Poland's top insurer to a bigger-than-expected drop in quarterly net profit.
The state-controlled group handed back $4 billion to shareholders in November, mainly Poland and Dutch insurer Eureko , to help settle a decade old ownership dispute and pave the way for a May listing, Europe's largest in two years.
The hefty dividend helped halve PZU's capital, which in turn hurt its investment results.
"Our net profit in 2010 should be at least 1 billion zlotys lower than last year (when it reached 3.8 billion zlotys)," Chief Executive Andrzej Klesyk told reporters on Thursday.
He added the second-half bottom line would exceed the 1.17 billion zlotys reached in the first six months, which would put the company's full-year target in the neighbourhood of 2.4-2.8 billion.
The chief executive's comments helped to drag PZU shares 1.7 percent lower by 1248 GMT compared to a 0.8 percent gain for Warsaw's main index. The stock had gained 21 percent since its May debut.
It was already in negative territory in the Thursday session after the group posted a 69-percent net profit drop to 362 million zlotys in the second quarter. Five banks and brokerages polled by Reuters expected it to reach 489 million.
"The main drivers behind the decline in net profit from the previous quarter were lower gross written premiums due to a continued reduction in exposure to the corporate auto segment and higher net claims relating to the two waves of floods in Poland," said Maciej Baranski, analyst at BZ WBK brokerage.
PZU, which accounts for about 40 percent of Poland's non-life insurance market, paid out or set up reserves totalling 549 million zlotys related to damages caused by floods in May and June that deluged parts of the country.
The group's gross written premium stayed flat at 3.47 billion zlotys. ($1=3.165 Zloty) (Editing by David Cowell)