logo-loader

Direct Line suffers overall decline in third quarter premiums despite own brand uptick

Published: 08:29 06 Nov 2018 GMT

Direct Line logo
The group also suffered a hit to the partnership division of its home insurance policies, as an exit from both Nationwide and Sainsbury’s caused premiums to halve

FTSE 100 insurer Direct Line Insurance Group PLC (LON:DLG) has reported a decline in gross premiums for the third quarter, despite a slight uptick in its own brand division.

The firm reported that its total gross written premiums were down 5.8% year-on-year (YOY) at £854.5mln, however its own brand premiums had risen 0.6% to £610.4mln.

READ: Direct Line Insurance sees first-half profits decline on big weather claims; CEO to step down next year

The group also suffered a hit to the partnership division of its home insurance policies, as an exit from both Nationwide and Sainsbury’s caused gross premiums in the segment to halve to £51.4mln while the part attributable to both partners fell 92.6% to £3.8mln.

However, the firm said claims inflation would remain within its long-term expectation of between 3% and 5% and subsidence claims would not be materially above “normal annual expectations” despite the dry summer weather.

The motor segment was also bleak, falling 1.2% YOY to £456.4mln, which the company blamed primarily on lower average premiums caused by changes to propositions in the price comparison website channel.

Direct Line saw better fortunes in its own brand home division, which grew 0.9% to £115.3mln in the period, while its Direct Line for Business and rescue & other personal grew 7.8% to £35.3mln and 3.1% to £113.4mln respectively.

However, this was not enough to offset an overall decline of 0.2% in the commercial segment to £118mln, while motor premiums dropped 1.2% £456.4mln.

The group saw more mixed fortunes in its in-force policies, which fell 3.8% in total to 15,183 YOY, however its own brand segment grew 3.5% to 7,078.

Across its segments, the firm reported that motor in-force policies had risen 1.9% due to strong retention levels, while own brand policies grew 0.3%.

Paul Geddes, chief executive of Direct Line, said the firm was “on course” to meet its 2018 and medium-term financial targets.

He added that the company was on track to begin its roll out of new personal lines systems in 2019.

In a note to clients, analysts at City broker Shore Capital said that the insurer still retained an advantage over its peers through a “network of repair centres and comprehensive offer to customers”.

The broker also retained its ‘Buy’ rating on the stock with a 370p price target, saying the shares were “too cheap to ignore at these levels” having underperformed in the last year.

In early trading Tuesday, Direct Line shares were down 0.6% at 315.9p.

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

2 hours, 33 minutes ago