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* FTSEurofirst 300 flat
* Insurer RSA drops 13.4 pct, cuts dividend
* Lufthansa sheds 5.4 pct, suspends dividend
By Tricia Wright
LONDON, Feb 20 (Reuters) - European shares traded flat on Wednesday, consolidating after the previous session's sharp gains, held back by weak earnings newsflow and as traders cited caution ahead of the minutes to the U.S. Federal Reserve's January policy meeting.
The FTSEurofirst 300 traded at 1,171.84 by 0916 GMT, having jumped 1.1 percent on Tuesday fuelled by robust German sentiment data.
"I see no reason why we can't consolidate the gains and possibly move higher. I certainly think that central bank policy is going to remain accommodative," Michael Hewson, analyst at CMC Markets, said.
"I think the only potential fly in the ointment could be a slightly more hawkish tone from certain Fed members with respect to the duration of quantitative easing."
The U.S. Federal Reserve releases the minutes of its Federal Open Market Committee meeting after market close.
Britain's biggest business insurer RSA was the standout faller on the FTSEurofirst 300, off 13.4 percent, after it slashed its 2012 dividend by a fifth and flagged up a further cut this year.
The news prompted broker Panmure Gordon to downgrade its rating on the firm, whose dividend has traditionally been among the highest in the European insurance sector, to "sell" from "hold", saying it has "removed a key prop to the share price".
Negative dividend newsflow also took its toll on Deutsche Lufthansa, with the German airline making the decision to suspend its dividend as it reported full-year results, sending its shares 5.4 percent lower.
In the current earnings season, 54 percent of STOXX Europe 600 firms have reported quarterly results so far, of which only 51 percent have beaten or met forecasts, a stark contrast with Wall Street where 79 percent of S&P 500 companies have reported results, of which 77 percent have beaten or met consensus, according to Thomson Reuters Starmine data.
Year to date, the STOXX Europe 600 has risen 3.8 percent, lagging a 7.3 percent advance on the S&P 500.
"European markets have recently underperformed the U.S. but at the end of the day it won't take much for people to take the view that it is time to buy the underperformer - and that should underpin the market," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million assets.