UPDATE 1-Insurance Australia Group seeks bigger presence in China; profit slumps

* FY15 net profit A$728 mln vs A$1.23 bln a year ago

* Cuts final dividend by 10 cents to 16 cents a share

* Lowers GWP guidance to flat from rise of up to 3 pct

* Shares down 5 pct (Recasts with CEO comment, adds shares)

By Swati Pandey

SYDNEY, Aug 21 (Reuters) - Insurance Australia Group IAG.AX on Friday said it was exploring opportunities for a bigger presence in China and would scale back its investment in regional Chinese insurer.

The remarks come after the company posted a 41 percent drop in full-year net profit and slashed its dividend due to record claim costs from storms last year, sending its shares down 5 percent.

IAG (LONDON:ICAG) said it will cut its ownership in Tianjin-headquartered Bohai Insurance, which currently provides it with a regional presence in China, to under 14 percent from 20 percent now.

"We continue to see opportunities in China as being very attractive to us," CEO Mike Wilkins told reporters on a post-earnings call. "We believe the better way is to explore a national presence rather than a regional presence that we have."

Net profit for IAG, in which Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc BRKa.N owns a 3.7 percent stake, fell to A$728 million compared with A$1.23 billion a year ago. It had claim costs of A$1.05 billion ($770 million).

Insurance profit fell 30 percent and it cut its final dividend by 10 cents to 16 cents a share. It had a reported insurance margin of 10.7 percent for the year, at the lower end of its target range of 10.5 percent to 12.5 percent.

IAG reaffirmed guidance for a reported insurance margin of 14-16 percent in the current business year but cut its outlook for gross written premium growth to flat from earlier expectations of an up to 3 percent increase, citing challenging market conditions and subdued inflationary pressures.

Earlier this week, Australia's biggest insurer by premium income QBE Insurance Group QBE.AX posted a 24 percent rise in first-half net profit, helped by gains from the sale of non-core assets. ID:nL3N10S5G6

($1 = 1.3639 Australian dollars)