Feb 12 (Reuters) - Insurance Australia Group ( IAUGF ) on Thursday reported a smaller-than-expected drop of 21% in its first-half cash earnings, as higher gross premiums blunted the ​impact of increased claims costs and ‌lower investment income.

Insurance Australia Group ( IAUGF ) also announced a fresh share buyback of ⁠up to A$200 million ($142.44 million), citing a strong capital ⁠position.

Australia's top general insurer's cash earnings ‌slipped to A$507 ‌million for the six months ended December 31, down from last ​year's A$640 million. However, it ‌beat the Visible Alpha consensus estimate of A$464.7 million.

Net claims expense for the first half ​rose 15% to A$3.51 ​billion, although ‌it was slightly lower than the consensus of A$3.53 billion.

Investment income from shareholder funds slipped 14% to ⁠A$186 million.

"Various major hailstorms and severe weather events ⁠in October and November across south-east Queensland and northern NSW resulted in significant claims for insurers," CEO Nick Hawkins said.

IAG forecast full-year gross written premiums growth ⁠in ‌high-single digits, compared with the prior view of ‌10% rise, and in line with the consensus ⁠estimate of 9.6% growth.

For the six months ended December 31, IAG reported gross written premiums of A$8.93 billion, 6% higher than last year. Net earned premium, which excludes reinsurance expenses, also rose 8.5% to A$5.35 billion.

The Sydney-based insurer also announced ​an interim dividend of 12 Australian cents per share, the same as what it paid last year.

($1 = 1.4041 ​Australian dollars)