The property and casualty (P&C) arm of Allianz suffered an 11.9% decline in operating profit to €5 billion ($8.2 billion) last year, despite producing increased revenues of €59.2 billion ($97 billion), up 6.8% from 2018.

Allianz says earnings were affected by a “strengthening of reserves” at Allianz Global Corporate & Specialty (AGCS).

“Our P&C business segment performed below expectations in 2019, following a disappointing reserve strengthening at AGCS that overcompensated for a solid accident year, underwriting and productivity gains,” CFO Giulio Terzario said.

The P&C combined ratio deteriorated 1.5 percentage points to 95.5% last year.

For the fourth quarter, P&C revenues increased 7.5% to €13.1 billion ($21.5 billion) but operating profit fell 42.3% to €861 million ($1.41 billion) due to the same reason that affected full-year earnings. The combined ratio worsened 5.5 percentage points to 99.6%.

Allianz made an overall net income of €8.3 billion ($13.59 billion) last year, up 7.8%, with the fourth quarter reporting an 11.2% rise to nearly €2 billion ($3.3 billion).