Nov. 7 (Bloomberg) -- CNP Assurances SA, France's largest life insurer, said third-quarter revenue fell 17 percent as slumping stock markets cut demand for savings products linked to equities.

Sales dropped to 6.01 billion euros ($7.65 billion) from about 7.2 billion euros a year earlier, the Paris-based insurer said in a statement today. That compares with the 5.98 billion- euro median estimate of six analysts surveyed by Bloomberg.

``This is a good solid set of numbers, considering the challenging market environment,'' said Ralph Hebgen, a London- based analyst at Keefe, Bruyette & Woods Ltd.

Insurance companies worldwide are writing down equity investments after global stock markets slumped 42 percent this year. Munich Re, the world's biggest reinsurer, cut its annual profit target for the second time this year, while Manulife Financial Corp., North America's largest insurer, joined Prudential Financial Inc. and MetLife Inc. in raising capital.

``For the savings business in France and in Italy the situation remains difficult,'' Chief Financial Officer Antoine Lissowski told journalists on a conference call.

CNP rose 1.75 euros, or 3 percent, to 59.75 euros in Paris trading, valuing the company at 8.9 billion euros. The shares fell 33 percent this year, less than the 43 percent decline in the 31-member Bloomberg Europe 500 Insurance Index.

Acquisition Talks

Lissowski said the company has considered the purchase of an insurer, which he didn't identify.

``You've maybe heard that a certain insurance company is for sale and that we've been contacted to be interested,'' Lissowski said on a call with analysts. ``We've spoken about this with our shareholders,'' who gave their ``support'' to provide the necessary capital for an acquisition should the company pursue it, Lissowski said.

Natixis SA, the French investment bank that raised 3.7 billion euros in a September rights offer, put its insurance business up for sale, Les Echos reported Nov. 4. The bank hopes to get between 800 million and 1 billion euros for the unit, though bids received so far have been lower than that, the newspaper said.

France's state-owned Caisse des Depots et Consignations, CNP's largest investor, had opposed a CNP purchase of Natixis's insurance unit because the deal would have reduced CDC's stake in CNP, according to Les Echos.

CDC doesn't plan to cut its stake in CNP, Lissowski said. ``This has been very clear'' in talks between the insurer and its top investor, he said.

Revised Profit Target

CNP revised its profit goal today. The insurer, which had set a target for recurring profit to rise at least 10 percent this year, said the increase will only occur if value adjustments to equity holdings are excluded. The insurer now expects full- year operating profit to rise 10 percent, it said.

CNP, created in 1959 by merging two insurance funds of CDC, is controlled at 75 percent by a shareholders pact between CDC, the French postal service's banking unit La Banque Postale and mutual bank Groupe Caisse d'Epargne.

La Banque Postale and Caisse d'Epargne distribute CNP's life-insurance policies, which are facing increased competition from savings accounts such as the Livret A, a tax-free plan whose rate was raised to 4 percent in August. As of Jan. 1, all French banks will be able to offer tax-free accounts. Currently, providers are limited to Caisse d'Epargne, La Banque Postale and Groupe Credit Mutuel.

CNP's life-insurance policies will probably face reduced competition from free-tax savings accounts next year. ``Today our idea is that a decline of Livret A's rate will be sure and even very strong in February,'' Lissowski said.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net.

Last Updated: November 7, 2008 11:49 EST