Ansvar Australia’s first-half underwriting loss has deepened to £2.05 million ($3.75 million) after the result was affected by hailstorms in January and an East Coast Low that brought damaging weather in February.

The result compares with a year-earlier loss of £354,000 ($647,000), when reinsurance limited the net impact of the Townsville floods. The combined operating ratio deteriorated to 115.8% compared with 103.3%.

Gross written premium (GWP) at the specialist church, heritage and education insurer rose to £38.3 million ($70 million) from £33.7 million ($61.6 million), results released by UK-based parent company Ecclesiastical Insurance Office show.

“Our Australian business continues to be successful in generating new business and strengthening rate, with premium growth of 13.7%,” Ecclesiastical said in its interim earnings report.

Ecclesiastical’s overall GWP rose 9% to £202.5 million ($369 million) supported by rising rates and strong retention, but the group reported a pre-tax loss of £59.7 million ($109.1 million) compared to a £42.8 million ($78.2 million) profit a year earlier.

Underwriting fell to a loss of £1.3 million ($2.4 million), from a profit of £9.5 million ($17.4 million), and the combined operating ratio deteriorated to 101.1% from 91.4%.

Group CEO Mark Hews says the headline result was mainly driven by unrealised losses on the investment portfolio, but the underlying result was resilient amid challenges presented by COVID-19.

“We maintained steady progress in our underlying underwriting performance, despite the impact of adverse weather events in Australia and Canada,” he said.

The underwriting loss included an impact from £14 million ($25.6 million) reserved for COVID-19 related claims “where there is confirmed cover”.

“Ecclesiastical itself has a comprehensive program of reinsurance to mitigate any further claim development that may be incurred over the months ahead,” Mr Hews said.

The company is one of eight insurers participating in a business interruption test case in the UK High Court brought by the Financial Conduct Authority on behalf of enterprises not covered for disruptions during the pandemic.

“We hope this will provide maximum clarity for all concerned in the shortest amount of time,” Mr Hews said.