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Q1 Trading Update

Direct Line Insurance Group Trading Update for the first quarter of 2016

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Highlights
  • Gross written premium for ongoing operations1 4.2% higher than the first quarter of 2015, with continued growth in Motor
  • Motor and Home own brands in-force policies grew for a second successive quarter. Continued growth in Green Flag direct and Commercial direct
  • Trading benefited from investment in Direct Line brand differentiation and proposition initiatives. Continued strong customer retention rates in Motor and Home
  • Investment income yield maintained, with a significant improvement in the available-for-sale reserve. Net investment losses of £7.7 million mainly reflect decisions to sell certain assets in the high-yield portfolio
  • Continued expectation to achieve a 2016 combined operating ratio2 in the range of 93% to 95% for ongoing operations, assuming a normal annual level of claims from major weather events

Notes:

  1. Ongoing operations include Direct Line Group’s ongoing divisions: Motor, Home, Rescue and other personal lines and Commercial. It excludes discontinued operations, the Run-off segment and restructuring and other one-off costs.
  2. Combined operating ratio is the sum of the loss, commission and expense ratios. The ratio measures the amount of claims costs, commission and expenses compared to net earned premium generated.
CEO comment

Paul Geddes, CEO of Direct Line Group, commented

“This was another quarter of top line growth for Direct Line Group, as customers responded favourably to the many improvements we have made to the business over the last few years. For the rest of 2016, we will aim to build on these foundations, while keeping a firm control of our costs, and we reiterate our combined operating ratio target of 93% to 95% for ongoing operations.”

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