* Munich Re affirms FY profit aim of 2-2.4 bln euros
* Troubled Ergo unit contributes 91 billion euros in profit
* Munich Re CFO says pressure on reinsurance prices eased
* Shares down 2 pct, at bottom of German blue-chips (Adds share price, analyst comment, further details)
FRANKFURT, May 9 (Reuters) - German reinsurance giant Munich Re posted a 20 percent fall in first-quarter profit at its mainstay property and casualty business due to several big claims, sending its shares to the bottom of Germany's blue-chip index.
Group net profit was up 28 percent at 557 million euros ($608 million) in the three months through March, the group said on Tuesday, compared with consensus for 584 million in a Reuters poll.
Munich Re said its results kept it on track to meet its target of 2-2.4 billion euros full-year profit, which would be a fifth consecutive year of declines.
Shares in Munich Re were down 2 percent at 1000 GMT on Tuesday, underperforming a 0.5 percent rise in the DAX index .
The property and casualty reinsurance business, which accounted for around a third of Munich Re's first-quarter gross premiums, was hit by a number of big claims from its customers, including a 100 million euro loss incurred by cyclone Debbie in Australia.
The unit's profit fell to 340 million, also partly due to an unusual accumulation of significant but localised natural catastrophe events in the U.S., Munich Re said.
The combined ratio of the property and casualty reinsurance unit, a closely-watched measure of expenses to premium income, deteriorated to 97.1 percent from 88.4 percent a year earlier.
"The development of the normalized combined ratio shows that the five-year softening phase continues to affect margins," Baader Bank analyst Daniel Bischof said.
Ergo, Munich Re's troubled primary insurance division, contributed 91 million euros in profit, up from a slight loss a year ago.
Chief Financial Officer Joerg Schneider said the unit was sticking to a 2017 profit target of 150-200 million euros.
Munich Re said the primary insurance division's result was in line with expectations, and the unit's recuperation could help ease the concerns of disgruntled shareholders who worry that Ergo is a drag on the core reinsurance business.
Low interest rates and sliding reinsurance prices have eroded profits in recent years. Munich Re suggested this could improve.
"We welcome the turnaround in interest rates in the USA, and hope that the ECB will also return to sustainable monetary policy," Schneider said in a statement. "Pressure on prices in reinsurance has eased off considerably."
Munich Re hopes that its digital initiatives, such as insurance against cyber risks, will help its bottom line in the coming years. Investors have complained innovation is not yet paying off.
$1 = 0.9156 euros Reporting by Tom Sims; Editing by Maria Sheahan and Susan Thomas