The CEO of AXA on Thursday expressed confidence in the French insurer’s company-focused XL Group after the business reported a loss in the first half following a spike in COVID-19-related claims.

AXA bought Bermuda-based XL in 2018 in a $15 billion deal to broaden its range of businesses, but in February this year lowered its 2020 profit guidance for the division, which focuses on offering property damage insurance to companies and other specialized insurance.

In the first half, XL reported a 0.8 billion euro loss versus 0.5 billion euros earnings a year ago, AXA’s results presentation showed on Thursday, as business interruption and event cancellations claims poured in.

“It’s true we didn’t have a good surprise … but we should not forget that COVID-19 is a commercial crisis and XL’s only business is commercial risks,” CEO Thomas Buberl told reporters.

“Excluding COVID, revenue is growing faster than claims inflation, which is … an ultimate test for a healthy insurance activity,” he said. “I am very confident in XL.”

AXA, Europe’s second-largest after Allianz, also withdrew its 2020 earnings target following a hike in COVID-19 related claims.

The company also said its planned 1 billion euro ($1.18 billion) sale of its AXA Life Europe business to private equity group Cinven had been canceled. AXA had entered exclusive talks in 2018 and said at the time the deal would include a 925 million-euro cash payment from Cinven.

The insurer also scrapped plans to propose an additional fourth-quarter payout of up to 0.70 euro per share if financial market conditions improved.

AXA shares were down 4.5% at 1244 GMT.

“We expect the cancellation of the second tranche of the dividend and the termination of the disposal of AXA Life Europe to weigh on the shares,” analysts at Barclays said in a note.

AXA’s first-half net profit fell to 1.43 billion euros from 2.33 billion a year before. Overall revenues fell by 10% to 52.4 billion euros.

($1 = 0.8443 euros) (Reporting by Maya Nikolaeva and Matthieu Protard; Editing by Leslie Adler/Kim Coghill/Jan Harvey/Jane Merriman)