Allianz first-half earnings fell 28.8% to €2.9 billion ($4.8 billion) as the COVID-19 pandemic hit its property and casualty businesses.

CEO Oliver Bate says the pandemic continues to be a challenge for all industries but the company has achieved robust results and shown “a remarkable resilience” in the first six months.

“It makes us confident that we will see a solid financial performance also in the second half,” he said.

Property and casualty operating profit deteriorated 23.4% to €2.2 billion ($3.6 billion), reflecting higher claims from natural catastrophes and a severe impact from COVID-19 amounting to €800 million ($1.3 billion).

The negative factors were partly offset by an improvement in the expense ratio, but the overall, combined operating ratio for the first half deteriorated by 2.7 percentage points to 96.7%.

“Adjusting for the impacts of COVID-19, the underlying performance remains strong with a normalised combined ratio of less than 94% as our focus on technical excellence and productivity gains pays off,” CFO Giulio Terzariol said.

The life and health operating earnings declined to €1.8 billion ($3 billion) from €2.3 billion ($3.8 billion), mainly due to a favourable one-off profit in the US during 2018/19.

Financial markets rallied in the second quarter, but Allianz says the economic recovery remains fragile and it would not be giving an updated operating profit outlook due to continuing uncertainties.