After posting a smaller-than-expected 2% rise in first-half profit as premium growth slowed, IAG has pledged to return $200 million in capital to shareholders.

Australia’s biggest home and car insurer announced a half-year net profit of $461 million for the six months ended December 31. Net earned premium was stable at $3.1 billion.

The insurer, which owns NRMA Insurance, SGIO, SGIC, CGU, NZI and Swann Insurance, will also continue on its drive to expand internationally.

“Last year we said we would either make further international acquisitions or return capital to shareholders. We’re pleased to be in the financial position to do both,” CEO Michael Hawker said.

He says IAG is building an Asian platform for future growth, “having recognised four years ago the opportunity to diversify our portfolio geographically”.

“Earlier this month we signed a memorandum of understanding to invest in China’s second largest general insurer, China Pacific Property Insurance Company, and we’re in the process of increasing our investment in Thailand’s Safety Insurance,” he said.

He says the company “still has several other international investment opportunities in the pipeline”.

Mr Hawker says IAG expects to deliver a full-year insurance margin of 14%-16%.

Meanwhile, IAG New Zealand has reported a record profit of $NZ93.31 million ($86 million) for the half-year to December.