Legal & General, which offers insurance and annuities products and is a major investor in both companies and markets, said its life insurance business, particularly in the U.S., was "adversely impacted" by the pandemic, suffering from increased claims, Chief Financial Officer Jeff Davies told reporters.
L&G's shares fell 3% to 213.6 pence at 0709 GMT, the worst performer in the FTSE 100 as investors digested the numbers, which also included a 14% fall in the insurer's net release from operations - or net cash generation - to 730 million pounds.
L&G Capital, which invests directly in companies and includes housebuilder CALA Homes, also saw a 29% drop in operating profit as business was interrupted by a national lockdown to contain the spread of the virus.
But analysts at Barclays said the results beat its expectations, describing L&G as "still a good story" and maintaining its "overweight" rating on the stock.
"We're very happy with the positioning for the second half," Davies said. "We are seeing a recovery in markets."
Legal & General Investment Management, one of the biggest investors in the UK stock market, saw assets under management rise 4% to 1.24 trillion pounds.
Legal & General, unlike some other insurers, paid a final dividend for 2019.
It said it would pay an interim dividend for 2020 of 4.93 pence per share, the same as a year ago.
JP Morgan said the flat dividend came in below analysts' expectations, and reiterated its "neutral" rating.
(Additional reporting by Muvija M. in Bengaluru, editing by Sinead Cruise)
By Carolyn Cohn