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Direct Line Insurance Group plc Trading Update for the first nine months of 2016

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Highlights
  • Motor and Home own brands in-force policies up 4.3%, with strong customer retention. Continued growth in Green Flag direct and Direct Line for Business
  • Gross written premium for ongoing operations1 4.2% higher, with continued growth in Motor own brands, up 9.7%
  • Investment income yield of 2.5% in line with full year guidance and no material gains or losses in the quarter
  • Total costs2 of £669.5m up £16.1m from the first nine months of 2015, after absorbing £24m of Flood Re costs in Q2 2016. Q3 total costs 3.3% lower than Q3 2015. In line with previous guidance, full year business as usual costs expected to be no higher than in 2015. However, reported costs may be somewhat higher than in 2015, due to higher non-cash intangible asset impairments than in recent years
  • Combined operating ratio3 for ongoing operations still expected to be towards the lower end of the 93%-95% target range, assuming normal weather
CEO comment

Paul Geddes, CEO of Direct Line Group, commented

“I’m pleased that we have traded well this quarter with good policy and premium growth, particularly for Direct Line, showing that customers like the value, service and brand propositions we offer them. We have achieved this while maintaining our underwriting discipline and reiterate that we expect to be towards the lower end of our 93%-95% combined operating ratio target range”

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