* Sales down 2 percent at 68.094 bln euros
* APE sales down 12.7 percent, P&C sales up 2.5 percent
* Says has more favourable business environment
(Adds further details, background)
By Sudip Kar-Gupta
PARIS, Oct 29 (Reuters) - AXA, which ranks alongside Allianz as Europe's two biggest insurers, said its business environment was getting better despite reporting a dip in nine-month sales on Thursday.
Sales fell to 68.09 billion euros ($101 billion). Analysts in a Reuters poll had on average forecast 68.36 billion euros.
Life and savings new business sales on an annual premium equivalent (APE) basis -- an industry measure used to iron out market volatility -- fell 12.7 percent to 4.51 billion euros while property and casualty insurance sales rose 2.5 percent.
Although the global economic outlook remained uncertain, AXA said market conditions for its sector were more positive than earlier in the year.
"The outlook in global financial markets has improved over the last six months, which provides a more favourable environment for our business," Chief Executive Henri de Castries said in a statement.
Yet while insurers have benefited from a rebound in global financial markets they have also had to contend with lower sales as cash-strapped consumers delay purchases of new products or opt to let existing insurance policies lapse.
Britain's biggest insurer Prudential Plc reported lower sales on Wednesday.
AXA's share price was down 3.9 percent at 17.18 euros on Wednesday, giving AXA a market capitalisation of around 36 billion euros -- roughly the same stock market value as Allianz.
AXA's stock has risen around 8 percent since the start of 2009, in line with a 9 percent gain in the DJ Stoxx European insurance sector. ($1=.6740 euros) (Editing by Greg Mahlich)