Allianz says its Australian profit dropped by a third in the first three months of 2020 as unprecedented bushfires devastated the nation.

Australian operating profit fell to €33 million ($55.21 million) for the quarter, from €49 million ($81.97 million) a year earlier, while the combined ratio rose 2.1 percentage points to 100.5%. Natural catastrophes contributed 13.5 percentage points.

Revenue in Australia fell 5.3% to €652 million ($1.09 billion) in the first quarter, Allianz says, although renewals were up 2% so far this year.

The first quarter saw the worldwide group operating profit fall 22% to €2.3 billion ($3.85 billion) on a 29% decline in the property & casualty business and a quarter drop in life and health insurance profit.

Allianz set aside €400 million ($669.12 million) in the first quarter to cover payouts, mostly for cancelled events and business interruption caused by social isolation measures, and says the fallout from the coronavirus pandemic is likely to wipe €1.2 billion ($2.01 billion), or 10%, from its annual profit.

“We will definitely see additional headwinds in the future,” CFO Giulio Terzariol said.

Allianz says its group property & casualty combined ratio was burdened by COVID-19 on top of the natural catastrophe claims, rising 4.1 percentage points to 97.8% in the first quarter compared with a year ago.

“COVID-19 has aggravated operating conditions in our property & casualty business segment,” Mr Terzariol said. Excluding the natural catastrophes and COVID-19 impacts, the combined ratio remains at 94%.