Direct Line sees premiums fall 5.8% amid challenging market conditions

The insurer saw gross written premiums fall across motor, home and commercial lines with the company faceing tough market conditions.

Direct Line
Source: Bloomberg

Direct Line (LON:DLG) saw its gross written premiums fall from £907.2 million to £854.5 million, representing a 5.8% decline, according to its third quarter (Q3) 2018 results.

The insurer suffered a slight decline in premiums across motor, home and commercial insurance lines. Motor premiums fell by 1.2%, driven primarily by changes to the insurer’s proposition on price comparison websites, the company said.

‘The Group’s performance during the quarter was robust in a competitive market,’ Direct Line Group CEO Paul Geddes said. ‘We continued to grow our direct own brands in-force policies while maintaining discipline on loss ratios.’

Direct Line breaks up with Nationwide and Sainsbury’s

Elsewhere, the company saw its own-brand home insurance premiums grow by 0.9% compared with the previous year, with retention levels improving, while new business volumes declined.

However, home insurance premiums in Direct Line’s partnership channel fell by £51.3 million due to the exit of Nationwide and Sainsbury’s partnerships.

Rescue brands rise

The group’s investment into direct rescue and commercial brands, including Green Flag and Direc Line for Business made good progress, with premiums growing by 13.1% and 7.6%, respectively.

In Commercial, NIG and other premiums fell by 3.2% due, in part, to exiting several larger risks which were not expected to achieve target returns.

‘We are delivering our key strategic priorities, including strong growth in our direct Rescue and Commercial businesses, Green Flag and Direct Line for Business, and we are on track to begin rolling out our new personal lines systems in 2019,’ Geddes said.

‘Overall, we are making good progress on our strategic priorities and are on course to meet our 2018 and medium-term financial targets,’ he added.

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