German insurer Talanx has raised its full-year outlook following a strong first half, despite expecting a significant impact from a “trail of destruction” caused by flooding last month in Western Europe.

The group, the parent of HDI Global, forecasts group net income of €900-950 million ($1.4-1.5 billion) up from an outlook released earlier this year of €800-900 million ($1.3-1.4 billion).

The first-half result improved to €546 million ($870 million), compared to €325 million ($518 million) a year earlier, although the floods will take a toll on the third quarter.

Earnings were also above the level seen in the first six months of 2019, before the COVID-19 outbreak, with all segments recorded growth due to initiatives in areas including SMEs and special risks.

The result shows the group’s strategy is right and it has managed to overcome “the massive challenges” posed last year by the coronavirus pandemic, Board of Management  Chairman Torsten Leue says.

“However, these positive developments do not mean we can expect comparable growth and similar results in the second half,” he said. “The catastrophic floods in Western Europe have left a trail of devastation behind them.”

Talanx expect to make payments of at least €600 million ($956.6 million) before reinsurance to clients for the floods and the event is estimated to impact third quarter group net income by about  €150 million ($239 million).

The first-half benefited from a reduction in coronavirus claims expenses to €278 million ($443 million), down from €824 million ($1.3 billion) in the prior period, with the type of impact changing.

Life/health reinsurance is now the hardest hit area due to the rise in mortality, while last year business shutdowns, event cancellations and credit insurance caused the majority of losses.

Gross written premium in the half rose 9.4% to €24.1 billion ($38.4 billion) while the combined operating ratio improved to 95.9% from 101.3%.