Munich Re has posted a steep 42% plunge in second-quarter net income to €579 million ($939 million) from a year earlier, as virus-related claims took a toll on the business.

COVID-19 losses cost the business about €700 million ($1.1 billion) in the June quarter, taking the reinsurer’s first-half bill from the pandemic to €1.5 billion ($2.4 billion).

Its property and casualty (P&C) reinsurance arm bore the brunt of the COVID losses, with about €600 million ($973 million) for the quarter and €1.4 billion ($2.3 billion) for the June half. Most of the claims were related to cancellation or postponement of major events.

P&C reinsurance net income in the second quarter fell by 50% to €348 million ($564 million) while the combined ratio worsened to 99.9% from 86.9%. Gross written premium rose to €5.5 billion ($8.9 billion) from €4.8 billion ($7.8 billion) a year earlier.

Major losses, defined as above €10 million ($16.2 million) each, increased nearly four times to €799 million ($1.3 billion) including €632 million ($1.02 billion) from man-made events. Natural catastrophes accounted for the remaining €167 million ($271 million) losses.

Despite the weak quarter, Munich Re remains upbeat its business will benefit from the hardening market. At the July renewals, prices rose by 2.8% across its portfolio.

“The world is far from defeating the coronavirus,” Board Chairman Joachim Wenning said. “We are growing profitably, while taking steps to benefit from the significantly improved market conditions for reinsurers.

“Prices have risen in nine consecutive renewal rounds, and premium income has grown correspondingly.”

Munich Re is projecting about €54 billion ($88 billion) in overall premium volume for the current financial year, which would be a record if achieved.

But the business says it will not be providing a profit guidance, citing the high level of economic uncertainty caused by the pandemic disruption.