* UK's Prudential posts 6 percent drop in Q3 sales, beats fcast
* Norway's Storebrand Q3 group profit jumps, beats fcast
* Shares down, Storebrand less than market (Wraps separate stories, adds details, comments)
By Aasa Christine Stoltz and Clara Ferreira-Marques
OSLO/LONDON, Oct 28 (Reuters) - British insurer Prudential reported a lower-than-expected drop in third-quarter sales, while Norwegian peer Storebrand posted a bigger-than-expected jump in group profits, lifted by the recovery in financial markets.
But both groups' shares fell in weak markets.
Prudential, Britain largest insurer, whose sales fell 9 percent to 700 million pounds ($1.15 billion) in the quarter, said its key Asian region and the United States offset weakness at home. The consensus forecast was for 653 million pounds.
Storebrand, a provider of pension, life and health insurance, banking and asset management in the Nordic region swung to a group profit in the quarter of 908 million Norwegian crowns ($161.1 million) against a 1.2 billion loss a year ago.
The result beat an average estimate of 632 million crowns, and was lifted by recovering equity markets, a build-up of buffer capital and improved investment return.
Shares in Prudential fell 5.08 percent to 579.5 pence, while shares in Storebrand, which initially rose more than 4.5 percent, dropped 1.7 percent to 40 crowns by 1111 GMT, but less than the 2.17 decline in the European insurance sector.
Prudential's Asian sales -- excluding the impact of the Taiwan business sold earlier in the year -- rose 4 percent to 293 million pounds, and the group said it was seeing signs of improvement in the region after a year of turbulence.
Asia has been a key driver of Prudential's growth and is seen as a critical indicator of its future performance.
Prudential's U.S. arm saw the group's strongest growth rates, with sales up 66 percent in the quarter as rivals in the variable annuity market were left hobbled by the credit crunch, allowing the group to jump from No. 12 player to No. 4.
"The numbers in the U.S. and Asia were substantially better than the consensus. They have outperformed in the areas with the highest margin and that should be considered positively," analyst Trevor Moss at MF Global said.
But Prudential's strong sales numbers were not enough to offset a weaker market, as analysts have long priced-in growth in Asia, and little detail was given on profitability.
Britain, now the smallest slice of Prudential's business, saw sales drop 22 percent, hit by the absence of a large bulk annuity transaction which lifted numbers a year ago.
For the nine-month period, total group insurance sales fell 9 percent to 2.02 billion pounds.
Prudential said there were indications of improvement in the global economy, but that it would be several quarters before a positive trend could be established. "We believe that the economic environment will remain uncertain for a while," Chief Executive Tidjane Thiam told a conference call.
IMPROVED FINANCIALS IN STOREBRAND
Storebrand said that it had improved its financial position and that it expected a positive development going forward.
"Storebrand was in a good financial position at the close of Q3," it said, adding that its solvency margin -- a measure of financial robustness -- in its life insurance unit stood at 161 percent.
"It should be a good foundation for continued improved development going forward," Chief Executive Idar Kreutzer told Reuters on the sidelines of a news conference.
"Financial markets are weak today, and Storebrand is performing better," ABG Sundal Collier analyst, Jan Erik Gjerland, said on the share price drop despite the strong results.
First Securities analyst Nils Christian Oyen said an increased equity proportion largely explained the good results, adding that a one-off gain of 51 million crowns from acquiring shares in advisory firm Formuesforvaltning helped lift it.
"They have an underlying improvement ... compared to previous quarters as financial markets are normalising," he said.
The company said an increased exposure to equities and a reduced hedging programme lifted the quarterly results.
"We have had a hedging programme to protect our equity against falling share prices. This was at 50 percent, has been reduced to one-third and will gradually be decreased," Kreutzer said.
The company said its cost programme from the 2007 acquisition of Swedish life insurer SPP was running according to plan. Annual reductions are targeted at 100 million Swedish crowns ($14.49 million). "The measures that have been put in place are providing the planned effects," Kreutzer said. ($1=5.637 Norwegian Crown) ($1=6.899 Swedish Crown) (Additional reporting by Camilla Bergsli in Oslo; editing by Simon Jessop and Rupert Winchester)