UPDATE 2-Swiss Re considers 2019 ReAssure IPO as profit fall hits shares

* Swiss Re says would remain ReAssure investor

* IPO would aim to raise capital for UK closed book business

* Profit down on accounting changes, short of forecasts

* Shares fall by 2.6 percent following results (Adds details from CFO, background on closed book business)

FRANKFURT, Aug 3 (Reuters) - Swiss Re is exploring a 2019 listing in Britain of its UK closed book business ReAssure, it said on Friday as a 17 percent fall in first half net profit hit its shares.

The reinsurer said that it was important for ReAssure to have access to new capital to acquire additional closed books.

Such deals have been heating up as insurers struggle to pay guaranteed returns for life insurance policies due to record-low interest rates and more stringent European capital rules.

ReAssure has about 45 billion pounds in assets under management and 3.3 million policies, and analysts say it could achieve a market capitalisation of about $3 billion, or roughly half its book value, which was $6.2 billion in 2017.

"Assuming a mid-single digit return on equity you would expect the company to trade at about 0.5 times book value plus a premium for potentially extraordinary cash generation," Bernstein analyst Thomas Seidl said.

Swiss Re said that it expected to remain a significant investor in the UK unit even after a possible IPO but that it would likely no longer hold a majority stake.

The moves comes as some life insurers are considering selling their life insurance portfolios as closed books to companies like ReAssure.

Germany's Generali Leben sale to run-off platform Viridium was the biggest disposal of a so-called closed book in Europe. Ergo, owned by Munich Re, had considered a sale of an even bigger portfolio, but opted to wind down the unit itself after it deemed offers too low.

In Britain, Prudential earlier this year announced the sale of a 12 billion-pound UK annuities book to Rothesay Life.

Analysts with Baader said that an IPO would help free up Swiss Re capital for more profitable uses.

Shares in Swiss Re were trading down 2.6 percent at 0751 GMT after it said net profit was $1.0 billion during the first six months, down from $1.2 billion a year earlier and below market forecasts.

However, Swiss Re said that profit would have been flat if it weren't for the changes in U.S. GAAP that affect the measurement of equity investments.

Eight analysts polled by Reuters had expected on average net profit of $1.13 billion.

Swiss Re and the insurance industry are bouncing back from a series of major hurricanes, fires and earthquakes in North America in 2017, the costliest year ever for the industry.

"It is positive to see that the market environment is gradually recovering," Swiss Re chief executive Christian Mumenthaler said.

Swiss Re and its competitors have been under pressure in recent years from falling prices amid intense competition.

Earlier this year, Swiss Re was in talks with SoftBank about the Japanese group potentially taking a stake in the reinsurer, but these fizzled out. (Reporting by Tom Sims, Paul Arnold and Arno Schuetze; Editing by Michael Shields and Alexander Smith)