Enjoying the fruits of what it calls an “unusually benign claims environment”, Promina has upgraded its long-term return on equity target range from the bottom end of 12.5-15% to the “middle range”. The move boosts the group’s net profit expectations from about $266 million to $290 million.

Announcing the initial forecast with the group’s half-year results during August, CEO Mike Wilkins says early predictions were modest because the group expected a return to “a more normal claims environment” after a low claims period.

“In the four months to October 31 2003, Promina’s strategy of specialisation has been able to capitalise on the stable general insurance conditions,” Mr Wilkins said. “In addition there has been a general continuation of the unusually benign claims environment which existed during the first half of 2003.”

The claims environment has benefitted other big players as well. IAG CEO Michael Hawker says his group is “well on its way” to achieving its profit targets. But unlike Promina, he has chosen to play it safe, refusing to discount the likelihood of natural disasters and upgrade his profit prediction.