Direct Line chief exec says pricing c hanges are unlikely to be seen until the new rules are implemented
The FCA’s pricing remedies are not intended to squeeze margins, but change distribution to ensure value for customers, Direct Line Group chief executive Penny James has said.
Speaking to Berenberg, James said branding, customer service, claims management and cost control are all likely to become more important in acquiring new business.
She added that pricing changes were unlikely until the new rules have been implemented.
She told Berenberg that ’in the new world, switching will be less frequent and hence insurers with policyholders on their books beforehand are likely to be in a better position to retain those customers’.
On company profitability and pricing, James said that commercial lines is performing better than expected, with above-inflation rate rises at NIG, as well as strong growth at Direct Line for Business.
”While Covid-19 has caused severity to increase in motor, this has been more than offset by the benefit from lower claims frequency, which likely increased in November following additional government restrictions.
”The trigger for motor pricing to rise will remain insurer estimates on claims frequency over the next 12 months.”