Direct Line Insurance Group PLC (LSE:DLG) resumed paying an interim dividend but reported first-half results below analyst expectations as new chief executive Adam Winslow makes some big changes for the insurer.
Gross written premiums from ongoing operations rose 53% to £1.8 billion for the motor and home insurer, which reported a swing to a £61.6 million pre-tax profit from a loss of £76.3 million last time.
Premiums were boosted largely by the Motability partnership that began a year ago, which if excluded would have seen growth of 11.4%.
Motor insurance margins improved and written net insurance margin was estimated to have remained above 10% during the first half, while the Non-Motor division delivered premium growth at 13.7% and margins at 11.6%.
A combined ratio of 98.2%, down from 108.8% a year ago, is 1.4 percentage points worse than the City consensus forecast, with the pre-tax profit also below consensus estimates.
A dividend of 2p per share was declared.
Winslow hailed the strong premium growth and return to profitability, saying the actions the group has taken, including joining price comparison websites for the first time and stopping investing in affinity motor partnerships and other personal line businesses, "are beginning to make a difference but there is more to do".
He said Direct Line will "continue to drive business transformation during the second half of 2024 and into 2025, as our new high calibre management team continues to arrive", with working contining to deliver the targets of at least £100 million of gross cost savings by the end of 2025 and a 13% net insurance margin in 2026.
The solvency capital ratio improved to a strong 200% pre-dividend, which alongside positive capital generation, Winslow said, gave the board confidence to announce the dividend payment.
The dividend was below market expectations, however.