SYDNEY, Aug 19 (Reuters) - Insurance Australia Group IAG.AX on Friday said it will conduct a A$300 million ($230.22 million) share buyback despite a 14 percent drop in annual net profit in fiscal 2016 amid softer market conditions in Australia and New Zealand.
Australia's biggest general insurer also reported a 6.8 percent rise in insurance profit over fiscal 2015 to $1.18 billion.
"This is a sound result in light of relatively flat gross written premium, which reflects challenging operating conditions in the Australian and New Zealand commercial markets," the company said.
Fiscal 2016 net profit dropped to A$625 million from A$728 million the prior year, the company said.
A quota share arrangement struck with Warren Buffet's Berkshire Hathaway (NYSE:BRKa) Inc BRKa.N last year lowered IAG's regulatory capital requirement by around A$400 million with an estimated further A$300 million reduction over the next two to three years, according to the company.
IAG (LON:ICAG) said it expects to complete the off-market share buyback by mid-October this year.
($1 = 1.3031 Australian dollars)