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Insurer Direct Line profits rise despite slip in home insurance premiums

Tuesday, 5th March 2019
Insurer Direct Line on Tuesday reported a rise in pre-tax profits despite weaker premiums from its home insurance division.

For the 12 months ended 31 December, pre-tax profits rose 8.1% to £582.6m and gross written premiums fell by 5.3% to £3.21bn.

Gross written premiums for its home insurance division divisions fell by 24.1%, as partnerships volumes was reduced by 40.7% predominantly due to the exit from the Nationwide and Sainsbury's partnerships.

Direct own brands gross written premium rose 1.8% to £2,223.0m for the year amid 'good' motor performance despite competitive markets, the company said.

Its combined operating ratio for underwriting operations was 91.7%. The ratio measures the proportion of claims to premiums with anything below 100% implying a profit.

The uptick in profits prompted the company to raise its final dividend by 2.9% to 14.0p, and a declare a special dividend of 8.3p, but this was 44% below the special dividend of 15p a share declared last year.

'We enter a pivotal year of operational delivery in 2019. This includes starting the roll-out of the latest generation IT systems for personal lines, following the successful launch of our new systems for small businesses in 2018, which we believe will deliver benefits for customers, colleagues and shareholders over the coming years,' said said Paul Geddes, CEO Of Direct Line Group.

'This gives us the confidence to continue to target a combined operating ratio of 93% to 95% in 2019 and over the medium term.'

'It gives me great pleasure to be handing over to Penny James as our next Chief Executive Officer with effect from the AGM in May. '

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