First-half results from Direct Line Insurance Group PLC (LSE:DLG) saw it resume paying an interim dividend but profits were below analyst expectations as new chief executive Adam Winslow makes some big changes for the insurer.
While the insurer reported a swing to a £61.6 million pre-tax profit from a loss of £76.3 million last time, it was not as big as the City was expecting.
Also, the combined ratio of 98.2% was down from 108.8% a year ago and worse than the City consensus forecast, with the dividend also not as big as predicted.
Premium price rises also had an adverse impact with own-brand policies sold down 7.5% though average premiums for new customers rose 16% year on year to £592/
Average renewal premiums jumped 31% to £514. with the number of direct own-brand motor policies falling by 488,000 year on year to 3.1 million.
Motor posted a first-half operating profit of £3.1 million against losses of £180.4 million a year ago.
Direct Line said: “Against this backdrop, we continued to focus on disciplined underwriting and this led to a 7.5% reduction in own brand policy count during the first half.
“In the second quarter, as motor began to go through the anniversary of the previous year’s significant rate increases, retention improved and the rate of policy count loss slowed.”
Shares eased 0.8% to 191.6p even with a dividend of 2p.