UPDATE 1-Insurers lead European shares higher as Hurricane Irma weakens

* Pan-European STOXX 600 index up 0.8 pct

* Reinsurers Munich Re, Swiss Re rally 4 pct

* AstraZeneca up on reassuring cancer drug news (Adds details, updates prices)

MILAN, Sept 11 (Reuters) - European shares rose on Monday, led by insurers as the downgrade of Hurricane Irma in the United States raised the prospect that costs for the industry may be lower than initially feared.

Europe's insurance index was the biggest sectoral gainer, up 2 percent and set for its best day in more than four months after the estimated insured loss in the U.S. resulting from Irma was cut to $20-40 billion.

"Insured losses (overall) are now expected to be less than many feared," Credit Suisse analysts said.

Their gains added fuel to a broad-based rally, helping the pan-European STOXX 600 rise 0.6 percent.

Irma, which hit Florida early on Sunday, came swiftly after Hurricane Harvey, whose costs for the industry have been estimated at $20-$30 billion.

Among top gainers were top world reinsurers Munich Re , Swiss Re and Hannover Re, all up over 4 percent, while Britain's Beazley added 6 percent.

Analysts at Baader Helvea upgraded Hannover Re to hold from sell, saying that following the stock's recent heavy losses the market had already priced in an extremely severe scenario.

Europe's insurance index has underperformed the broader market so far in 2017 and is still down 4.5 percent from its year high, hit in early August.

Elsewhere, pharma heavyweight AstraZeneca rose 2.3 percent after two of its drugs tackling lung cancer delivered impressive clinical results on Saturday.

That helped the British group offset a big clinical trial setback in the disease in July that sent its shares down more than 15 percent, its biggest daily loss ever.

In the same sector, however, Denmark's Lundbeck slumped 11 percent, the leading faller in Europe, after the resignation of CEO Kåre Schultz.

(Reporting by Danilo Masoni, Editing by Kit Rees and Mark Trevelyan)