An S&P Global Ratings report has outlined the financial hit from COVID-19 on the industry, saying the pandemic led to an $US8 billion ($10 billion) fall in net income last year for the 16 multiline insurers that it tracks.

Despite the earnings hit, they still achieved a sizeable net income of $US36 billion ($47 billion).

One-off items not directly related to the public health crisis reduced earnings by $US12 billion ($15.5 billion).

“The COVID-19 crisis dented earnings for [global multiline insurers] in 2020,” the report said.

“Thanks to their good base of recurring profitability, we see a recovery in earnings in coming years once vaccinations increase and the pandemic abates.”

The ratings agency says multiline insurers involved in property and casualty commercial lines were the hardest hit. Losses posted by the three most exposed players accounted for more than half of pandemic-related decline in net income from the 16 multiline insurers.

It says for a number of insurers – such as Axa, Allianz or Zurich – earnings last year would have been better than 2019 had COVID not broken out because they have strong underlying profitability.

“This reflects the robustness of the business model of [global multiline insurers], which relies on competitive advantages leading to solid business positions,” the ratings agency said.

“This helps generate recurring profitability even amid financial market volatility.”

The report says in comparison reinsurers have fared worse. This is because reinsurance policies, especially in commercial lines, covered a large share of primary insurers’ exposure.

The top 20 reinsurers rated by S&P racked up about $US20 billion ($25.8 billion) in COVID-related losses last year.