Australia's IAG reaffirms outlook; closes in on China JV

Insurance Australia Group was on track to meet its 2011 margin guidance before Monday's earthquakes in New Zealand but its was too early to assess if the tremors would have any impact on results, the company said on Tuesday.

IAG, Australia's top car and home insurer, added it wants its Asian business to double grow written premium contribution to a tenth by 2016 and it had made "substantial progress" in talks with a potential joint venture partner in China.

"Our focus is to accelerate growth in Australia and New Zealand and to boost our Asian footprint so that it represents 10% of the Group's gross written premium by 2016," Chief Executive Mike Wilkins said in a statement.

In addition to China, the company is also focusing on India and targets reaching AUD 1 billion in gross written premium in its JV by 2016.

Wilkins, who began as CEO in 2008, set out restructuring the insurer and raising its Australia and Asia focus. But unprecedented series of natural calamites and writedowns at its UK business hamstrung the insurer.

IAG, which owns 26% of the joint venture with India's top lender State Bank of India launched in Asia's third-largest economy in March last year and now seeks to garner a 5% market share in the next five years.

Asian operations contribute AUD 430 million to IAG's AUD 8 billion gross written premium now and the company said it hoped to raise partnership and acquire a portfolio of profitable business in select Asian markets.

IAG, which cut its 2011 net insurance margin outlook twice in February, said it was on track to meet to achieve underlying gross written premium growth of 3-5% and was also on track for an insurance margin guidance of 8-10% before Monday's New Zealand quake.

IAG shares traded 0.3% lower in early trade, in line with the broader market.