IAG’s strong net profit of $446 million for the six months to December 31 was bolstered by robust trading conditions and record levels of investment income – and it says there’s more where that came from, with the group focused on expanding into Asia.

CEO Michael Hawker says while IAG is committed to delivering benefits to shareholders, its strategy for 2005 to “build a foothold in Asia remains unchanged”.

And if IAG can’t find investments that meet its criteria, it may return surplus capital to shareholders.

Mr Hawker says the group’s personal lines businesses performed well with customer retention and satisfaction levels over 90% and sales increasing.

IAG’s commercial lines business also performed strongly, recording more than 6% revenue growth on the corresponding period in 2003. IAG NZ benefitted from favourable underwriting conditions, an appreciation of the New Zealand dollar “and the absence of major catastrophes”.

The group’s revenue increased 6.8% from $2.912 billion in the corresponding period to $3.1 billion.

Underwriting profit dropped from $277 million in the corresponding period in 2003 to $255 million. But Mr Hawker says despite the apparent decline, it is “actually an underlying improvement when the impact of discount rate changes on outstanding claims is taken into consideration”.