Direct Line Group reported gross written premium (GWP) from continuing operations of £777.8m in the first quarter of 2016, up 4.2% on the £746.5m it reported in the same quarter last year.
This was despite a 1.8% drop in in-force policy numbers to 15.9 million from 16.2 million.
- Insurer paid £5m in storm claims in quarter
- Motor GWP up 10.5%, but home down 3.4%
- Company says partnerships remain “strategically important”
The insurer said it had incurred £5m of storm claims in the first quarter of 2016 after incurring no claims in the same period last year.
The company also said it is expecting to pay £25m towards the annual levy for Flood Re, which will be incurred in the second quarter.
Direct Line also revealed that it had increased motor prices by 9.4% compared with their levels in last year’s first quarter, and cut home prices by 2.3%.
The insurer reaffirmed its target to achieve a full-year 2016 combined operating ratio (COR) of between 93% and 95% – tougher than its 2015 target of between 94% and 96%.
The COR target assumes a normal level of claims from large weather events.
Direct Line Group chief executive Paul Geddes said: “This was another quarter of top line growth for Direct Line Group, as customers responded favourably to the many improvements we have made to the business over the last few years. For the rest of 2016, we will aim to build on these foundations, while keeping a firm control of our costs, and we reiterate our combined operating ratio target of 93% to 95% for ongoing operations.”
Direct Line Group’s motor GWP grew by 10.5% to £360.7m, while home business GWP dropped by 3.4% to £202.8m. Commercial lines GWP increased 2% to £117.5m (see table below for full breakdown).
Direct Line said the drop in home GWP was mainly down to a 5% drop in GWP from its partnerships. The company also attributed the bulk of the 1.8% drop in policy numbers to partnerships.
The company has lost some key partnerships in recent months including Nationwide and Sainsbury’s.
But it said that partnerships remain “strategically important” and said it will work on improving its manufacturing capability to develop propositions for current partners.
Direct Line Group Q1 2016 GWP breakdown
|Q1 2016 (£m)||Q1 2015 £m)||Change (%)|
|Rescue and other personal lines||96.8||95||1.9|