DLG returns to profitability but in-force policies drop

Direct Line Group (DLG) returned to profitability during the first half of 2024 despite in-force policies dropping by 3.1%.

In a trading update today (4 September 2024), the insurer revealed that it secured an operating profit of £63.7m during the six months to June, up from a loss of £93.7m this time last year.

The group also achieved a profit before tax of £61.6m, an increase from the £76.3m loss in H1 2023.

The hikes were, in part, due to 53.5% jump in gross written premium (GWP), with DLG recording a figure of £1.84bn during H1 2024.

These improved results come as chief executive Adam Winslow, who joined DLG in March, continues work to strengthen the business’ bottom line.

As part of this, he is aiming to remove at least £100m of costs by the end of 2025.

Winslow feels this can be achieved through further improvements in digital capability, reduced technology costs and removing complexity across the group.

He said: “In the first half of the year we delivered strong premium growth and returned to profitability.

“We remain committed to the strategy announced in July at the capital markets day and are working to deliver on our targets of at least £100m of gross cost savings, on a run-rate annualised basis, by the end of 2025 and a 13% net insurance margin in 2026.”

Policies

However, DLG’s figures also show that in-force policies dropped from 9.24 million to 8.95 million in the six months to June.

The group said the drop reflected “trading discipline”, while Winslow said that there was more work to do as the firm looks to further improve its position in the market.

As part of its refreshed strategy, DLG launched its flagship brand – Direct Line – on price comparison websites in a bid to grow its motor book.

DLG has also made several senior appointments, including Craig Thornton as managing director for home and growth, Martin Milliner as managing director of claims and Hugh Hessing as chief operating officer.

“The actions we have taken are beginning to make a difference but there is more to do,” Winslow said.

“We will continue to drive business transformation during the second half of 2024 and into 2025, as our new high calibre management team continues to arrive.”