It seems insurers can't take a trick right now.

During an otherwise varied results week for the big three, there was one constant theme - spooked shareholders running for the hills.

IAG CEO Michael Hawker and his counterpart at Suncorp John Mulcahy are used to the slings and arrows.

Battle-hardened by experience, Mr Mulcahy couldn't have been too surprised by Suncorp shareholders wiping off 8% in the wake of the company's 27.5% half-year profit slump.

And Mr Hawker's been there, done that. The modest 1% fall in IAG's share price after its announcement of a 68% dive in half-year profit would hardly have shocked a man who has seen IAG's share price almost halve in the space of just over 12 months.

But QBE chief Frank O'Halloran could have been forgiven a double take. Reporting a 30% rise in full-year profit, he still fell 6% shy of market expectations.

Investors reacted furiously, QBE's share price haemorrhaging more than 10% to $25.75 by the end of the day. By the end of the week skittish shareholders had wiped off another 12% to finish at $22.57.

QBE committed the cardinal sin of surprising the market - not necessarily by the fact that net earned premium fell to $10.2 billion, but by the size of the slide.

And the unthinkable has happened - the previously untouchable Mr O'Halloran was forced to clarify his position at QBE's results briefing last Tuesday, when he would not commit to running the company beyond the end of the year.

During QBE's unprecedented global expansion and in the wake of the World Trade Centre disaster, shareholders learned to believe in the mantra, "Trust Frank".

Nothing in the company's latest results should have prompted a rethink, but the sharemarket is starting to act irrationally.

While KPMG analyst Andries Terblanche says the QBE reaction "raised an eyebrow", he is mindful investors invariably over-react to bad news. He also blames the growing trend towards short selling in Australia's liquid stockmarket. And such macro-economic trends are not helping insurers one jot.

The strong dollar has hammered QBE with its extensive international operations. The terrible weather on Australia's east coast has battered Suncorp, with its relatively large regional exposure. And the soft commercial market has slashed IAG's bottom line.

Add low premiums, widening credit spreads and increased competition, and you've got a lethal cocktail.

While Dr Terblanche reckons insurers are better informed than ever before about their capital position, technical pricing and expected losses, the vagaries of the weather are impossible to forecast accurately.

"It's very hard to model that. Weather patterns are not homogenous at all. It's very hard to get an element of predictability to it. Low-frequency high-severity [events] are the hardest to model."

The twin holy grails of increasing market share and raising premiums may now be out of reach, with insurers likely to sacrifice market share for the greater good, Dr Terblanche believes.

"What we may see going forward is insurers putting up premiums, even if they lose some market share in the process."

Perhaps insurers are quite simply on the nose in a suddenly uncertain economic climate as jittery investors look for a safe haven for their buck in more easily interpreted stocks.

Despite insurers' admirable attempts to explain the arcane sciences of reserving, combined ratios and insurance margins to investors, many shareholders have clearly marked the sector down as complex and risky.

Dr Terblanche reckons shareholders should take comfort insurers "are very well capitalised, very well reserved and have access to quality data to deal with the tough circumstances".

But investors have clearly lost their nerve and are ignoring underlying fundamentals. And one thing anyone involved with insurance investment needs is steady nerves.