Zurich Insurance’s new capital target disappointed market expectations on Thursday, even as claims related to the COVID-19 pandemic and higher losses from natural catastrophes bit less than expected into full-year earnings.

Insurers have faced hefty claims from event cancellations and business interruption amid government lockdowns to curb the spread of COVID-19, while a damaging hurricane season in the United States put further pressure on earnings in the second half.

Zurich has been looking to raise premiums to help cushion the impact.

Full-year net profit of $3.83 billion – an 8% drop from 2019 – easily beat average expectations of $2.93 billion in the company’s own poll of 21 analysts, thanks to a strong pickup in pricing in the property and casualty business and late-year investment portfolio gains.

Business operating profit fell 20% to $4.24 billion, Europe’s fifth-largest insurer said.

The group’s life insurance business outperformed expectations, as key markets in Asia Pacific, particularly Australia, saw strong improvements.

“We would expect the trends that have driven (our operating beat) to continue into this year, so we would expect to see further improvements to the businesses’ performance,” Chief Financial Officer George Quinn told journalists on a call.

But a newly set capital adequacy target, and a downward revision to current solvency as the group switched from one measurement system to another, disappointed analysts.

Shares fell 1.1% in early trading, as the Swiss insurer said it would now target a Swiss Solvency Test (SST) ratio of 160% or more, following a 182% ratio for the year.

“The new goal of at least 160% seems low compared to competitors,” Vontobel analyst Simon Foessmeier said in a note.

COVID-19 related P&C claims, net of reinsurance and related reductions in claim frequency, came in at $450 million for the full year, as flagged during the first half.

Executives said they did not expect to see significant impact from COVID-19 related claims to the P&C business in 2021, but could expect pandemic-related life insurance claims – which had a $173 million impact in 2020 – to continue.

Catastrophe losses, meanwhile, were $588 million higher than in 2019.

Zurich proposed an unchanged dividend of 20 Swiss francs per share. (Reporting by Brenna Hughes Neghaiwi; editing by John Revill and Kevin Liffey)