Despite claims forecasts of between $40 million and $50 million due to Cyclone Larry, Promina still expects to meet its financial performance targets.

CEO Mike Wilkins told the annual meeting of Australia’s third-largest insurer the company is still dealing with Cyclone Larry but doesn’t expect the event to eat into full-year profit.

“This will have an impact on our general insurance margin for the first half,” he said. “However, we do not expect the impact on our full-year result to be detrimental to achieving our full-year targets.”

He says the company is tracking ahead of forecasts after the first quarter of 2006.

The parent company of AAMI and Vero says it still expects average annual growth in gross written premium of at least 5% over the next three years.

Promina also expects an average insurance margin greater than 10% over that time, with an average return on equity in excess of 15%.

Mr Wilkins says market conditions in all the group’s main sectors have been as expected. “In our direct… general insurance operations, we are seeing a continuing competitive environment, but one that remains essentially rational and disciplined,” he said.

But this isn’t the case in some areas of the company’s intermediated general insurance operations. “During the first quarter of 2006 we have continued to see intense – and in some instances irrational – competitive behaviour.”

Mr Wilkins says price is being used as a differentiator, with seemingly little regard for the capital required.