4th May 2016 06:42
LONDON (Alliance News) - Direct Line Insurance Group PLC on Wednesday said its first-quarter gross written premium for ongoing operations were up 4.2% on a year earlier, to GBP777.8 million, with continued growth in motor partially offset by a reduction from home-insurance partnerships.
The insurer said its motor and home own-brands in-force policies grew for a second successive quarter, with growth seen in Green Flag direct and Commercial direct. There were strong customer retention rates in motor and home, Direct Line said.
Investment income yield was maintained, the insurer said, with a significant improvement in the available-for-sale reserve. Net investment losses of GBP7.7 million were due to selling some assets in its high-yield portfolio, where credit quality was of concern. Direct Line generated investment income of GBP41.1 million, and achieved an unchanged annualised income yield for continuing operations of 2.4%.
Direct Line reiterated that it expects to achieve a 2016 combined operating ratio in the range of 93% to 95% for ongoing operations, assuming a "normal" annual level of claims from major weather events. The ratio is a measure of underwriting profitability. Insurers like to see their combined ratios remain below 100%, which indicates profitable underwriting.
"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," Chief Executive Officer Paul Geddes said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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