Australia's IAG says to scale back UK operations

SYDNEY, July 9 (Reuters) - Insurance Australia Group Ltd (IAG.AX) (IAG), Australia's biggest home and car insurer, said on Wednesday it would scale back its UK operations and take a non-cash impairment charge of A$350 million ($333 million) in fiscal year ended in June 30.

IAG expects to deliver an insurance margin of over 10 percent in fiscal 2009, compared with 6-8 percent in the last year.

IAG, which rebuffed a takeover approach from bigger rival QBE Insurance Group Ltd (QBE.AX) earlier this year, made the comments in a trading update and business review, the first review under new Chief Executive Officer Michael Wilkins.

IAG shares are down about 11 percent in 2008, just half the decline in the benchmark S&P/ASX 200 index .AXJO in the same period. ($1=A$1.05) (Reporting by Denny Thomas;)