FRANKFURT (Reuters) - Reinsurer Hannover Re (HNRGn.DE: Quote, Profile, Research) slashed its profit forecast on Thursday and warned that the costliest hurricane season ever meant it would probably only break even this year, driving its shares down more than 7 percent.

The world's fourth-biggest reinsurer said it made a net loss of 184 million euros in the third quarter as hurricanes tore into profits, far heavier than the 48 million euro loss expected by 13 analysts surveyed by Reuters.

By scrapping its net profit goal of more than 300 million euros, Hannover Re joins a growing list of insurers hurt by the hurricanes. They have already forced the world's second-largest reinsurer, Swiss Re (RUKN.VX: Quote, Profile, Research), to scrap its 2005 profit goal and have pushed Britain's Goshawk Insurance (GOS.L: Quote, Profile, Research) into financial crisis.

Hannover Re's result dismayed investors and sent its shares down sharply, making it the biggest loser on the German mid-cap MDAX index. The shares were down 7.02 percent at 28.35 euros at 1035 GMT, hurt additionally by Hannover Re's warning that its dividend was set to fall.

Janssen also highlighted the group's reliance on investment income, made by investing premiums on the stock market and elsewhere, which was up by more than half to 314 million euros in the quarter.

"If your operating results are disastrous and the only way you can polish it up is by selling off some of your assets, investors are not very impressed," he said. "What happens to management credibility, and how will they re-establish it? It is a dangerous game."

Hannover Re's finance chief, Elke Koenig, sought to reassure markets and said the hurricanes had been exceptional, adding that the net profit target for 2006 of up to 470 million euros was still intact.

In an interview with Reuters, she said the storms would also drive up prices for the reinsurance that Hannover Re sells to insurers to cover themselves against the risk of such a disaster.

This is cache, read story here