Overall gross written premium rises at Direct Line Group
Direct Line Group grew its motor book by 9% but shrank its home book by 4% in the first quarter of 2017.
Overall, the company grew its gross written premium by 4%.
Direct Line Group Q1 2017 GWP breakdown
|Q1 2017 (£m)||Q1 2016 (£m)||change (%)|
|Rescue and other personal lines||104.2||96.8||7.6|
Motor GWP was £392.7m, up from £360.7m in last year’s first quarter. The insurer said this was mainly caused by boosting prices in response to claims inflation.
Direct Line Group said that its average written premium had increased by 6.6% and that risk adjusted prices had increased “significantly more than that” and “comfortably ahead of the group’s current view of claims inflation”.
The company added that the cut in the Ogden discount rate to -0.75% in March had “little impact” on first quarter trading.
Motor in-force policies increased 5% to 3.9 million (Q1 2017: 3.7 million).
Meanwhile, home GWP fell to £194.8m from £202.8m. Direct Line Group said the main cause for the reduction was a 7.7% drop in GWP in its partnership business, where it sells insurance under high-street brand names. The company lost its partnership deals with Sainsbury’s and Nationwide last year.
The Sainsbury’s deal, covering home and motor, ended in February this year and its home insurance partnership with Nationwide ends later this year.
Direct Line’s commercial GWP grew by just under 1% to £118.6m (Q1 2016: 117.5%) as 2% drop in NIG’s GWP partly offset 10% growth at Direct Line for Business.
NIG’s GWP dropped to £90m from 91.6m, while Direct Line for Business’s GWP grew to £28.6m from £25.9m.
Direct Line Group’s total GWP grew to £810.3m in the first quarter of 2017 from £777.8m in last year’s first quarter.
Chief executive Paul Geddes (pictured) said: “Overall, I am pleased with the positive start we have made to the year, continuing the momentum we built in 2016 and supported by continued strong growth in the Direct Line brand.
“We have delivered particularly strong results in motor and this performance has more than offset the challenging home market. Direct Line for Business and Green Flag have also performed well. We reiterate our target of a COR in the range of 93%-95% for 2017.”