Insurance Australia Group (IAG) will buy back and cancel £157 million ($A286.8m) of subordinated notes.
The Australian Prudential Regulation Authority has approved the repurchase, which is set to occur on June 13.
After the repurchase, and after IAG's acquisition of Wesfarmers' insurance underwriting business, IAG expects its gearing to be around the middle of its targeted debt to total tangible capitalisation range of 30 per cent to 40 per cent.
IAG agreed in December to buy Wesfarmers' Australian and New Zealand underwriting operations for $1.845 billion.
