Yes, It protects, among other things, the hydraulic lines on the rack
from rocks. Thats how I got my car cheap- the previous owner rode around without it and one of the external rack lines got nicked by a rock and leaked,
that was it for him with expensive repair estimate for a rack replacement for
$7-800 I forget exactly. I didn't need a rebuilt rack at all, just replaced
the pair of external lines for about $80.00. Can't fault the Volvo estimate
since it wasn't obvious where the leak was until the rack was out and the
thick coat of greasy stuff was removed.

That belly pan probably improves cooling besides keeping junk from smacking/flooding the engine.