* To incorporate as a European company, eyes Solvency II
* Coy on profit outlook, cites possible Talanx IPO
* 2011 net profit 606 mln eur, dividend 2.10 eur/shr
* Share closes up 1.8 pct, lags Europe insurance index (Recasts; adds detail, background)
By Christian Kraemer
HANOVER, Germany, March 14 (Reuters) - Hannover Re might relocate its legal office within Europe if this would give it an advantage under new risk-capital rules, as other insurance players like the UK's Prudential mull more radical moves.
The world's third-biggest reinsurer said moving its registered office within the EU could become "significant" in light of the new rules, known as Solvency II, which will put insurers under tighter, more complex supervision by national regulators.
Chief Executive Ulrich Wallin said moving to a different regulatory jurisdiction could help speed the approval of internal capital models that insurers must present to financial watchdogs, but added there would need to be a "substantial advantage" to outweigh the costs of moving.
Prudential warned last month that it could move its headquarters out of London to escape Solvency II if Europe does not give the U.S. capital regime "equivalent" status.
Netherlands-based Aegon has previously warned that Solvency II might force it to quit the EU, while London-based Old Mutual has said the disposal of its U.S. life insurance business last year was partly triggered by the new rules.
Hannover Re said it currently has no plans to move out from under the supervision of German watchdog Bafin, whose new president, Elke Koenig, had served as Hannover Re's Chief Financial Officer from 2002-2009.
Wallin declined to name countries that might be considered.
The world's biggest reinsurer, Munich Re on Wednesday said it was not mulling a change of its legal seat.
"This decision is not an issue for us at present," a Munich Re spokeswoman said.
German watchdog Bafin declined comment.
As part of its preparations for Solvency II, Hannover Re said it would change its legal structure to qualify as a "European company" under EU law, following the path of companies like Allianz, MAN or BASF.
European company status makes it easier for firms to restructure or carry out mergers cross-border.
"We have no big takeovers in the pipeline," Wallin told a news conference on the company's 2011 results.
The legal change needs to be approved by shareholders but is expected to be completed by the beginning of 2013, when Solvency II is due to come into force, the company said.
Hannover Re refrained from giving a profit outlook for 2012, citing the possible initial public offering of its majority shareholder and Germany's third-biggest insurance group, Talanx.
"We were asked to be reticent," Wallin said, adding that a Talanx flotation would have no impact on Hannover Re.
Wallin was asked by journalists about analyst forecasts that Hannover could post net profit of 675 million euros this year, to which he replied that it was only appropriate to talk about an amount over 600 million.
"The analysts appear to know their trade," he added.
Talanx, which owns a 50.2 percent stake in Hannover, is moving closer to an IPO, after a decade of discussion.
Financial sources familiar with the situation at Talanx have told Reuters that a flotation could raise more than 1 billion euros but was unlikely before June or July.
The Financial Times Deutschland newspaper on Wednesday cited banking sources as saying Talanx was eying an IPO in the autumn and planned to float a stake of 30 percent at most, which would raise 1.5 billion euros.
Talanx declined to comment.
Hannover Re on Wednesday said net profit for 2011 was 606 million euros, in line with a preliminary figure released on Feb. 13 and down nearly one fifth from record net profit of 750 million euros in 2010.
The company's share closed up 1.8 percent, lagging a 2.3 percent gain in the STOXX Europe 600 insurance index.
Reinsurers paid out billions of euros in damage claims for earthquakes in Japan and New Zealand, flooding in Thailand and a hurricane in the United States last year, making 2011 one of the most expensive on record for the industry.
"The fact that we were still able to generate a pleasing profit shows that we are moving forward towards our goal of reducing the volatility of results", Wallin said. ($1 = 0.7628 euros) (Additional reporting by Jonathan Gould; Editing by Jon Loades-Carter)