LONDON, Oct. 6 (Reuters)—European insurers are financiallyrobust and unlikely to require injections of fresh capital, barringan Italian sovereign default or break-up of the single currencyarea, analysts said.

European insurance stocks have on average lost a third of theirvalue since February, partly reflecting fears insurers could beforced to raise cash to offset impairments on their government bondholdings as the eurozone crisis deepens.

This week's state bailout of Franco-Belgian lender Dexia , laidlow in part by heavy exposure to distressed Greek debt, has stirredmemories of the 2008 crisis, when some insurers had to be proppedup by the taxpayer alongside big chunks of the banking sector.

But the insurance industry, having spent the last three yearsbolstering and de-risking its capital base, and immune from thedrying-up of wholesale credit that is weighing on the banks, is atpresent unlikely to run out of cash, analysts say.

"Investment leverage is high and the market is concerned thatthey'll have to raise capital as eurozone issues deteriorate," saidJefferies International analyst James Shuck.

"The downside is potentially significant but the probability issmall – there are no specific worries among any of the quotedplayers at this stage."

Shuck and rival insurance analyst Barrie Cornes of PanmureGordon published research this week downplaying the likelihoodthat, respectively, Axa and Aviva would need to raise additionalcapital.

"There's a whole raft of reasons why it's very unlikely," Cornessaid.

ITALIAN THREAT

Worries over the insurers have moved on from Greek debt, mostlyheld in manageable volumes, and now centre on their substantialinvestment in Italian bonds, seen as increasingly risky afterItaly's stretched finances prompted two recent downgrades to itscredit rating.

According to research by Barclays Capital, twenty-one topEuropean insurers had 151 billion euros ($202.4 billion) of grossexposure to Italian sovereign debt in June, against just 8.5billion euros of Greek government bonds.

"Holdings of Italian bonds have been a big concern" said TonySilverman, equity analyst at S&P Capital IQ.

"Greece can come and go, perhaps with some exceptions in thebanking sector, but I'm not aware of it being a game changer forany of the larger insurers."

However, sector-watchers reckon regulators and credit ratingagencies alike are ready to accommodate insurers who findthemselves hamstrung by their holdings of Italian debt.

Credit agencies have kept unchanged their stance on Italianinsurers, where much Italian sovereign debt is concentrated,despite the downgrades to Italy's own credit rating.

And Italy's ISVAP regulator last week relaxed rules on whatproportion of losses on government bonds insurers must take intoaccount when calculating their solvency ratio, boosting shares inmotor insurer Fondiaria-SAI .

"The noise that the rating agencies and regulators have beenmaking is supportive and positive for the sector," saidJean-Francois Tremblay, insurance analyst at RBC CapitalMarkets.