Swiss reinsurance giant Swiss Re plunged into the red in 2020 under the weight of pandemic-related compensation, posting a heavier-than-expected net loss of $878 million (€724m) on Friday.

Excluding COVID-19 compensation claims and pre-tax reserves, group net income rose to $2.2 billion.

The Zurich-based firm had posted a net profit of $727 million in 2019.

The fees and sums set aside to cover the costs resulting from the coronavirus pandemic amounted to $3.9 billion, said the group, which acts as an insurer for insurers.

The fees and sums set aside to cover the costs resulting from the coronavirus pandemic amounted to $3.9bn, said the group, which acts as an insurer for insurers

“The COVID-19 pandemic continues to affect communities and businesses across the globe. The start of vaccination efforts brings hope that the situation will improve soon,” said Swiss Re’s group chief executive Christian Mumenthaler.

“Our group has gone through this crisis with confidence and strength, and in our role as a shock absorber we are doing our part to help mitigate the challenges of the pandemic and improve resilience to future systemic risks.

“From the start of the pandemic, we took a disciplined and prudent approach to building reserves as actual claims have been slow to come in.”

Swiss Re expects additional COVID-19-related claims and reserves in its property and casualty businesses of less than $500 million in 2021.

It said the uncertainty surrounding several aspects of the pandemic remained high and could impact either positively or negatively on claims developments.

Based on the group’s strong capital position and positive market outlook, the board of directors will propose a dividend of 5.90 Swiss francs ($6.60) per share at the annual general meeting on April 16, the company said.

Natural catastrophe losses amounted to $1.7 billion for 2020 – largely driven by the Atlantic hurricane season.

Large man-made losses were dominated by the Beirut port explosion.