Direct Line Insurance Group PLC (LSE:DLG)’s recovery will be the focus as the insurer updates on its third-quarter trading next Monday, November 11.
Having reported a swing to pre-tax profit at the half-year stage, Direct Line’s update will come against a backdrop of “renewed optimism” it can get back on track, Hargreaves Lansdown’s Matt Britzman commented.
“With the group back in the land of profit, third-quarter trading next week needs to show a continued recovery in net insurance margins, especially from the motor division,” he said.
Net insurance margins sat at 1.8% over the first half, against -8.8% a year earlier, with the figure in Direct Line’s home, commercial direct and rescue wing reaching 11.6%.
Motor insurance margins remained negative at -3.3% in the meantime though, as the wing continued to feel the impact of business written in the first half of 2023.
That said, new motor contracts were being written at margins above 10%, Direct Line reported in September, leaving expectations for profitable growth over the second half.
“Customer numbers will also be in focus,” Britzman said, after Direct Line shed 488,000 own-brand customers in the first half as “prices saw mammoth hikes”.