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Q3 results

Interim Management Statement for Direct Line Group for the third quarter and first nine months of 2014

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Highlights
  • Gross written premium for ongoing operations1 5.0% lower for the first nine months of 2014 compared with the same period of 2013, reflecting lower gross written premium in Motor and Home, partially offset by growth in Commercial
  • Motor in-force policies 0.7% lower than the previous quarter with prices stable in the third quarter of 2014
  • Improvement in personal lines capability through new websites, delivery of a number of pricing projects and a new advertising campaign and propositions for the Direct Line brand. Launched self-install telematics proposition in Motor
  • Total cost base2 for the nine months ended 30 September 2014 6.0% lower than for the first nine months of 2013. On track to achieve targeted total cost base2 of approximately £1,000 million in 2014. Investment income yield increased by 20 basis points on the first nine months of 2013 to 2.3%, reflecting actions to diversify the portfolio
  • Announced a binding agreement with Mapfre, S.A. for the sale of the Group's International division for cash sale proceeds of €550.0 million (£430.1 million3). It is expected that substantially all of the net proceeds will be returned to shareholders
  • Group expects the combined operating ratio for ongoing operations1 to be within the range of 95% to 97% including the benefit of significant reserve releases. Motor current-year loss ratio in the second half of the year is expected to be similar to the first half of 2014
CEO comment

Paul Geddes, CEO of Direct Line Group, commented

"Progress in the third quarter means we remain on track to deliver our 2014 financial targets, despite a backdrop of markets that remain highly competitive.

"We are working hard to enhance our propositions and I am particularly pleased with how we are harnessing technology to improve our product features and make it easier for our customers to interact with us.

"Looking forward, we remain focused on improving our efficiency and the competitiveness of our offering in this ever-changing marketplace."

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Upcoming results

Third quarter interim management statement will be published on 31 October 2014, for details of the Q&A conference call please click here.

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