LONDON (Reuters)—European insurers are expected to report mostly lower quarterly profit over the next two weeks, weighed by falling stock markets, Italian earthquakes and British floods.

Renewed worries about a potential eurozone breakup fueled a 4.5% drop in the FTSE Eurofirst share index between April and June, forcing some insurers to write down their equity holdings.

With the sector already struggling due to a combination of low interest rates, rising claims, and depleted consumer finances, that move will help push underlying profit down across much of the industry, analysts say.

European life insurers are under particular pressure as rock-bottom rates eat into their investment income, eroding the margin they make on popular savings policies that offer guaranteed minimum rates of return.

Their sales are also faltering as weak economic growth deters consumers from making investment decisions, and as capital-starved banks compete aggressively with them in the personal savings market.

"I would expect profits to be moving down, and that's mainly from pressure in investment markets," said Berenberg Bank analyst Peter Eliot.

"The most immediate impact would be falling equity markets, which means lower funds under management and hence lower fees and margin pressure."

Home and car insurers, which had been benefiting from gradually rising prices across much of Europe, have in the last three months absorbed a hit from earthquakes in Italy's Emilia-Romagna region and flooding in Britain after torrential summer rain.

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Britain's RSA Insurance Group P.L.C., due to report results on Thursday, last month flagged an £85 million ($133.8 million) loss from those two events, which analysts expect will contribute to a 36% drop in its first-half operating profit, according to a company poll.

The Emilia-Romagna earthquake, expected to cost insurers up to €700 million ($862.4 million), will also take its toll on Italy's Assicurazioni Generali S.p.A.

The Trieste-based insurer, Europe's third-biggest, will on Thursday say its quarterly net income more than halved from a year ago as it unveils its first set of results under new Chief Executive Mario Greco, according to analysts at Credit Suisse Group.

Analysts say the impact of sovereign bond impairments will be more moderate than a year ago, as most insurers have written down their holdings of distressed Greek debt to zero.

However, the eurozone crisis continues to cloud the sector's prospects, particularly for insurers such as Generali and Allianz S.E., which hold large volumes of sovereign bonds issued by critically indebted Italy.

The Stoxx 600 European insurance share index fell 7.1% in the second quarter, underperforming the wider market's 4.5% drop, reflecting investor concerns over the sector's exposure to the crisis via its major holdings of eurozone stocks, bonds and property.