Calliden Group has said its unaudited loss for the 2011 calendar year will be between $11.5 and $12.5 million.

The company has not provided performance guidance for the full year, Calliden CEO Nick Kirk told insuranceNEWS.com.au.

“We didn’t have a forecast for the year, but events have forced us to revise our end of year results,” he said. “It has been one of those years.”

The Christmas Day hailstorm in Melbourne has cost Calliden $3 million net. Losses for the company during the fourth quarter were $5 million.

Claims reserves had to be increased by $2 million due to a 3.4% reduction in the discount rate applied to reserves, caused by a fall in Australian government bond yields.

The losses would have been greater had Calliden not sold its 50% share in Claims Services Australia, booking an $8.3 million profit.

Mr Kirk says the insurer is in the process of transitioning its business model to a low volatility underwriting agency structure.

More than 30% of the group’s premiums this year will be written on behalf of Munich Re-owned Great Lakes, Lloyd’s and the NSW Government’s home warranty scheme.

“In 2011 we started to transition to a less capital-intensive and less volatile business model and this result will add impetus to that process,” Mr Kirk said.

“We are looking for a return to a modest profit in 2012 but it will be a transition year for Calliden between risk-carrying and agency.

“From 2012 we aim to be producing a non-volatile profit which will enable us to make maximum use of our franking credits.”

Calliden has also increased its capital adequacy by $4.5 million to lift its capital adequacy multiple to between 1.6 and 1.65 this month.