Mr Harmer said the company's reported margin of 13.7 per cent was lower than in the first half of fiscal 2018 because of higher claim costs, coming in at $110 million above allowance following the hailstorm.

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He said the insurer's $607 million provision for perils was up on previous years and would likely continue to grow.

Future modelling accounting for climate change included historical experience as well as asset values in potential exposure areas, he said.

Despite the severity of the recent Queensland floods, Mr Harmer does not expect them to "materially impact" future earnings.

AIG wrote $5.88 billion worth of gross premiums during the first half while its underlying margin — the company's preferred measure of performance — rose to 16.2 per cent.

“IAG’s underlying performance has continued to improve over the half and was broadly in line with expectations," Mr Harmer said.

"Our underlying margin increased 70 basis points to 16.2 per cent, reflecting ongoing premium increases across the book that are at least matching inflation on claim costs," he said.

Senior analyst and head of research at Bell Potter, TS Lim says the results show the company is in a good position.

"The underlying result is good, top line growth is strong [and] costs are coming down," he said.

"The underlying margin went up by 300 basis points.

"When you look at the underlying profit of the company it is actually pretty strong."

Mr Harmer said the company expected "slightly more subdued growth" in the second half of fiscal 2019.

The company's interim fully franked dividend is 12 cents a share, down from 14 cents a share in the same period a year earlier.

Investors celebrated the result, pushing the company's shares up more than five per cent to an intraday high of $7.69 — their highest level since last August.