2003’s benign claims environment may have led to one of the best underwriting periods in history, but it seems Promina may have taken the good conditions a little too seriously when estimating its full-year net profit.

While Insurance Australia Group late last year brushed off market pressure to upgrade its insurance margin target range of 9-12%, Promina upgraded its original expectation from the “bottom end” of its long-term return on equity range of 12.5-15% to the “middle range”.

But December’s Melbourne storms landed Promina with a damage bill of $37 million. The group still expects to finish in the 12.5-15% range, but lower than previously indicated.