1st Nov 2013 08:07
LONDON (Alliance News) - Direct Line Insurance Group PLC Friday reported higher operating profits for the third quarter and first nine months of the year, even though gross written premiums declined as it faced stiff competition in UK personal line products which was only partially offset by growth in its international and commercial operations.
The insurer said operating profit, excluding one-off and restructuring costs, rose 6.1% in the third quarter to GBP131.2 million, compared with GBP123.7 million a year earlier. The figure for the first nine-months of the year was GBP417.8 million, up from GBP347.9 million. Third-quarter net profit rose to GBP91.3 million, up from GBP59 million.
A rise in its investment returns more than offset a decline in gross written premiums in the third quarter. Premiums declined to GBP977.7 million, from GBP1.03 billion a year earlier, as it faced competition selling products like motor rescue services.
Its combined operating ratio fell to 95.4% in the first nine months of the year, from 99.7% a year earlier as it cut costs, improved its underwriting and fewer claims came in for major weather events. It has a full-year target of 98%.
Annualised return on tangible equity from ongoing operations was 16.8% over the same period, up from 10.6% last year. It has a 15% target for the full year.
Direct Line shares were up 2.6% at 231 pence early Friday, one of the biggest gains on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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