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H1 Results

Direct Line Insurance Group plc Half Year Report for the first half of 2016

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  • Gross written premium for ongoing operations1 3.9% higher, with strong growth in Motor in-force policies (up 2.5%) and premium rates (up 9.5%)
  • Combined operating ratio1 from ongoing operations continued to be strong at 89.6%, 0.2pts higher, including Flood Re levy impact of 1.6pts. Motor current-year attritional loss ratio1 improved by 1.0pt
  • Operating profit from ongoing operations decreased £12.2m to £323.6m, after £18.5m lower investment gains
  • Return on tangible equity1,2 of 23.1% (1H 2015: 21.2%). Profit before tax decreased £16.5m to £298.5m (1H 2015: £315.0m)
  • Interim dividend per share of 4.9 pence (1H 2015: 4.6 pence) and special interim dividend of 10.0 pence per share
  • Post dividends, the Group’s estimated Solvency II capital3 coverage ratio was 184% (pre-dividends: 199%)


1. See glossary on page 38 for definitions

2. See appendix A – Alternative performance measures on page 39 for reconciliation to financial statement line items

3. Estimates based on the Group’s Solvency II partial internal model output for 30 June 2016 1

CEO comment

Paul Geddes, CEO of Direct Line Group, commented

“I am pleased with our results over the first half of 2016, as we delivered an excellent performance against a very strong comparator from the previous year. We have generated operating profits of over £320m in spite of weaker investment markets and the addition of the new Flood Re levy. Our customers continued to respond well to the refreshed propositions of our brands, which is reflected in another increase in the number of our own brands policies. Together, this demonstrates the benefits of the improvements we have made to strengthen our business.

“Although there remains a range of uncertainties in the macro-economic environment, we gain confidence from the strength of this performance, the transformation of the business and the approval of our partial internal model. These factors enabled us to increase the interim dividend to 4.9p and to declare an additional special interim dividend of 10.0p, representing a total payout to shareholders of £204.9m.”

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