HDI Global parent Talanx has reported a 30% drop in net income to €520 million ($848 million) for the nine months to September, as pandemic-related claims and severe losses from natural disasters dented earnings.

Underwriting losses worsened by over 50% to €1.97 billion ($3.2 billion) because of the fallout from COVID-19 and the combined ratio blew out by 2.2 percentage points to 100.7%.

The insurer says COVID losses totalled €1.06 billion ($1.7 billion) during the period, the result of claims for business interruption, event cancellation and credit insurance lines.

Major loss events from the pandemic were about €899 million, compared with €507 million ($827 million) for natural disasters. Overall major losses for the nine-month period doubled to €1.6 billion ($2.6 billion) from €800 million ($1.3 billion) a year earlier.

Large losses from natural catastrophes, defined as above €10 million ($16.3 million), included a number of events in Australia. Last summer’s bushfires in NSW cost Talanx €41.7 million ($68 million), the Victoria hailstorm €29.5 million ($48 million), southeast hailstorm €7.3 million ($11.9 million), east coast flood €14.8 million ($24.1 million) and Rockhampton hailstorm €9.4 million ($15.3 million).

"The corona pandemic is and will remain a challenge," Talanx CEO Torsten Leue said. “Fortunately, we are growing profitably and are robust.

“In view of the pandemic and the heavy hurricane season, the group result is impressive.”

The business, which has previously withdrawn its 2020 earnings guidance because of the pandemic disruption, now predicts it is on track to achieve a net income in excess of €600 million and €800-900 million ($1.3-1.5 billion) next year.

In the first nine months of the year, gross written premium from its property and casualty plus life businesses grew 5% to €31.9 billion ($52 billion).