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Insurance Australia Group Limited (ASX:IAG) has posted a lower first half profit and forecast its full year margin will come in at the lower end of guidance.



The insurer’s net profit slipped 10.6 per cent to $144 million in the last six months of 2011.



This result represents an insurance margin of 7.1 per cent, down from 12.7 per cent the year before.



IAG says the reporting period was defined by high net natural peril claim costs, including floods in Thailand and the severe Christmas Day storm in Melbourne, significantly increased reinsurance costs and volatile investment markets.



IAG expects its full year insurance margin will rest at the lower end of a 10 to 12 per cent range.



A fully-franked interim dividend of 5 cents per share has been declared.