** Citi says Insurance Australia Group's IAG.AX 1H25 reported insurance margin to benefit from lack of severe weather events in New Zealand and incidence of smaller events in Australia

** Brokerage lifts price target to A$9.65 and retains "buy" rating

** Aussie general insurance firm to report HY results on Feb. 13

** Citi says that although the pace of IAG's rate increases is likely slowing, co's profitability still looks strong

** Brokerage lifts EPS by 8% in fiscal 2025 and 1% in fiscal 2026 and 2027

** IAG up 2.4% so far this year as of last close, outperforming a 1.3% rise on the ASX Financials index .AXFJ

(Reporting by Nikita Maria Jino in Bengaluru; editing by Diane Craft)

((Nikita.Jino@thomsonreuters.com;))