(Repeats to add cross-reference to Breakingviews comment)
* Targets 5 bln euros op result, cost savings of 600 mln eur
* CEO Greco says won't cut dividend over three-year plan
* To expand P&C business, sees Solvency I above 160 pct
* Won't exit Swiss, Austria, Dutch businesses
* Shares little moved, down 0.6 pct
By Lisa Jucca and Myles Neligan
LONDON, Jan 14 (Reuters) - New Generali boss Mario Greco vowed to boost operating profit by a quarter via an ambitious turnaround strategy that focuses on "value over volume" at Europe's No.3 insurer.
Under the three-year plan, Italy-based Generali aims to expand its non-life segment as a proportion of its total business, hike investments in high-growth markets in eastern Europe and Asia and deliver 600 million euros ($800.7 million) of cost cuts to boost shareholder returns.
Greco, an outsider who took office on Aug. 1 backed by Generali's largest investor Mediobanca, promised operating profit of more than 5 billion euros, up from 4 billion which had been envisaged at the end of 2012, though the timeframe over which this would be delivered was specified only as "over the cycle".
"We shall implement a revolution based on discipline, simplicity and focus," Greco said as he unveiled his road-map to improve profitability at Italy's biggest financial group.
"Today marks a significant milestone in reshaping Generali. The mandate from our shareholders is to improve returns and group profitability," he said on Monday.
Generali's reorganisation follows similar overhauls at European insurers including Aviva, Axa and Old Mutual, as ultra-low interest rates and volatile financial markets in the wake of the 2008 banking crisis take their toll on the sector's finances.
Underperformance at Generali, which suffered more than peers due to its large exposure to crisis-hit Italy, prompted frustrated investors to oust long-standing Chief Executive Giovanni Perissinotto in a boardroom coup last year.
The new strategy envisages bringing the contribution of Generali's non-life segment to around a half of insurance operating profit by 2015, up from 35 percent.
The plan also aims to lift Generali's Solvency I margin - the main measure of capital strength for European insurers - to 160 percent from a company estimate of between 150 and 155 percent at the end of 2012.
That includes Generali's 2.5 billion euro deal last week to take full control of its GPH eastern European joint venture, a takeover that removed uncertainty over the insurer's strategy in the fast-growing region.
"Generali's new financial targets were somewhat ahead of expectations," analysts at brokerage Cheuvreux said in an initial reaction to the plan, adding: "We have some question marks on how these targets could be achieved, especially with respect to the capital target."
Greco promised to achieve the group's targets without cutting dividends and said there would not be any significant staff reductions in any of the regions where Generali operates.
He also said the company was not planning to reduce activities in mature markets such as Austria, Switzerland and the Netherlands, which some analysts consider to have been underperforming.
No specific acquisitions were planned in eastern Europe, which represents around 6 percent of total premiums but is growing faster than Generali's core Italian market, Greco added.
Shares in Generali were little moved and by 0843 GMT were down 0.6 percent against a 0.2 percent rise in the European insurance sector.
Since Greco's arrival, the stock has gained around 45 percent, outperforming a 25 percent rise in the STOXX Europe 600 index of European insurers as well as gains at immediate rivals Allianz and Axa.
The increase partly reflects an improvement in sentiment towards Italy that has boosted the value of Generali's around 50 billion euro Italian government bond portfolio.
Yet the improvement also reflects hopes for Greco's leadership, reflecting his track record at Italian insurer Ras, now part of Allianz, and Switzerland's Zurich Insurance .
Greco, who has already carried out a review of Generali's investment portfolio, is shedding non-core assets such as Swiss private bank BSI and reinsurance activities in the United States, for which the group has yet to receive binding offers.
"We are not forced sellers, so if we see offers that are not interesting, we will step back," Greco said. ($1 = 0.7493 euros) (Additional reporting by Gianluca Semeraro; Editing by David Holmes)