Hannover Re’s property and casualty (P&C) business recorded an 11.8% decline in net income to €837.3 million ($1.31 billion) last year as losses from Cyclone Debbie and other major catastrophes exceeded its provisions.

Overall net income fell to €958.6 million ($1.51 billion) from a record €1.17 billion ($1.84 billion) in 2016, but last year’s figure was better than the reinsurer’s guidance of €800 million ($1.26 billion).

P&C underwriting profit fell 96.9% to €15.5 million ($24.33 million) due to the biggest large-loss burden in Hannover’s history.

Gross written premium (GWP) increased 16.4% to €10.71 billion ($16.81 billion).

Debbie, the US hurricanes, California wildfires and other catastrophes pushed net major loss expenditure to €1.13 billion ($1.77 billion), way above the budgeted €825 million ($1.3 billion). Debbie cost about €63 million ($98.9 million).

The combined operating ratio worsened to 99.8% from 93.7%

Australia contributed about 2.7% of Hannover Re’s GWP from P&C reinsurance last year.

Hannover says Debbie brought stability to reinsurance prices in Australia.

“In Australia and New Zealand the market players expect to see clear improvements in conditions in the run-up to the July 1 renewals,” its annual report says.

“With demand for natural catastrophe capacity sharply higher, a global hardening of the reinsurance market will undoubtedly have clear implications for pricing in Australia and New Zealand too.”