No 1 insurer IAG intends to keep looking for new takeover targets in Asia and other international markets in a bid to boost its long-term earnings growth and double its size by 2012.

CEO Michael Hawker told shareholders at the group’s AGM in Sydney last week that now it has generated profitable local operations it must look to international markets to “maintain growth at the level necessary to remain competitive in the longer term”.

He says that based on past performance, the group will need to grow by at least 16% a year to maintain its positioning on a global scale. Delivering those goals would see the group double its size.

“Allowing for the Australian businesses to grow at 1.5-2 times GDP, this would translate into offshore earnings contributing about 40% of earnings by 2012,” Mr Hawker said.

While IAG acquired a business in Thailand earlier this year and is in discussions with a Malaysian motor insurer, it isn’t afraid to say no to acquisitions that aren’t right, with Mr Hawker “walking away from several potential transactions that did not meet our criteria”.

“Longer term we will not limit our search to Asia,” he said. “We will also pursue opportunities in other markets if they meet our strict criteria. For example, markets such as North America and Europe present opportunities to grow our international revenue streams and position the group for long-term earnings growth.”

Looking ahead, Mr Hawker said the predictions for 2006 remain unchanged, and it still expects to deliver dividend growth of around 10%.