We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Direct Line Group - Premiums up but policies fall

Nicholas Hyett | 4 May 2016 | A A A
Direct Line Group - Premiums up but policies fall

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Direct Line Insurance Group plc Ordinary

Sell: 216.70 | Buy: 217.10 | Change 0.50 (0.23%)
Chart View factsheet

Market closed | Prices delayed by at least 15 minutes | Switch to live prices

Direct Line Group have reported a 4.2% increase in gross written premiums for ongoing operations versus Q115, although total in-force policies fell 1.8% following a significant fall in the Rescue and Other Personal lines.

Operating expenses rose £5m, offset by lower claims handling expenses.

Flood Re (the industry levy which helps to provide affordable flood insurance to high risk areas) launched on 1 April 2016. The group's contribution, based on market share, is expected to be £25m in 2016.

Direct Line shares were flat in early trading.

Motor - 46% of gross written premiums:

In-force Motor policies rose almost 2% versus Q115 with gross written premiums for the quarter improving markedly to £360.7m (Q115: £326.4m). Growth was driven by improvements in both own brand and partnership with the division benefitting from a significant 9.4% increase in risk adjusted pricing.

Home - 26% of gross written premiums:

In-force Home policies were broadly flat, with a small decline in partnership policies offset by a small increase in own brand. Gross written premiums declined 3.5% in the quarter, driven largely by a 5% decline in partnership premiums. Risk adjusted prices declined 2.3%.

Rescue/Other - 12% of gross written premiums:

Rescue and Other Personal Lines saw in-force policies fall 3.7% as a result of lower partnership Rescue volumes. Gross premiums rose 1.9% with Rescue up 4% following a strong performance from the group's Green Flag own brand.

Commercial - 15% gross written premiums:

Commercial in-force policies rose 5.8% based on stronger Direct Line for Business sales. Gross written premiums rose 2.1%.

Paul Geddes, CEO, commented:

"For the rest of 2016, we will aim to build on these foundations, while keeping a firm control of our costs, and we reiterate our combined operating ratio target of 93% to 95% for ongoing operations."

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.