Direct Line Insurance (LSE:DLG) Group PLC said it expects motor insurance pricing to be volatile in the first few months of 2022 as the market resets.
The company’s gross written premiums in the third quarter of 2021 edged up 0.7% to £857.1mln from £851.5mln, despite the core motor insurance business seeing a 1.4% decline in premiums written.
The number of policies in force fell to 14,410from 14,471 the previous year.
Penny James, the chief executive officer of Direct Line, said management was pleased with the trading performance.
“During the quarter, our direct own brand policy count grew overall while stabilising in Motor.
"We have made strong progress in executing our strategy and have begun to see improved pricing competitiveness in Motor as a result of the capability delivered by our new platform. We have also successfully launched an electric vehicle proposition for our Direct Line brand, which helps make the switch to electric easier for our customers and builds on our expertise in this growing market,” James said.
The insurer reiterated its medium-term target range of 93% to 95% (normalised for weather) for the combined operating ratio – a measure of how wisely the company insured. For 2021, following lower than normal vehicle insurance claims and strong prior-year reserve releases, the FTSE 250 company continue to expect a combined operating ratio in the range of 90% to 92%, normalised for weather.
"Our transformation progress, delivery of new propositions and improved competitiveness, combined with our focus on disciplined underwriting, mean we are well placed as we look ahead and we reiterate our combined operating ratio target of 93% to 95% over the medium term,” James concluded.
Shares in Direct Line were down 1.3% in early deals.