The new product will be launched in Q4 

Direct Line will be launching a tailored basic car insurance product for customers hit by the ongoing cost-of-living crisis as a result of plummeting motor insurance premiums.

Published yesterday (8 November 2022), the insurer’s third quarter trading update for the three months ending September 2022 revealed that total motor premiums fell 8.9% compared to the same quarter in 2021.

Earlier this year, in its H1 trading statement, Direct Line increased motor premiums by 15% for new policyholders to counter balance soaring claims costs that were impacted by ongoing supply chain pressures for both used and spare parts.

Penny James, Direct line Group’s chief executive, said: “In quarter four, we will launch a new product for customers challenged by the cost-of-living crisis and start rolling out more advanced digital claims capability.”

The new policy will be launched under the Churchill brand and will offer cover for third party damage and the policyholders’ car.

Economic volatility

Adjusted gross written premiums for Q3 2022 also fell to £383.8m, down from £440.9m in the equivalent quarter last year.

Meanwhile, in-force policies for motor reached 3,854 for Q3 2022, down from 3,944 in Q2 this year.

The insurer’s trading update stated: “We are in a period of economic volatility, which makes an assessment of inflation more uncertain than usual.”