3rd Mar 2020 09:27
(Alliance News) - Direct Line Insurance Group PLC on Tuesday reported a double-digit profit fall in 2019 amid "difficult" market conditions, but said it experienced an improvement in the second half and expects this trend to continue going forward.
In addition, the insurance company said Mike Biggs - who has been chair since April 2012 - intends to step down later in 2020 following the appointment of a successor.
"As I am now approaching the ninth anniversary of my appointment, and as our new senior management team is now firmly established, I believe that the time is right for the company to be searching for my successor," said Biggs.
Turning back to results, Direct Line said pretax profit declined by 12% in 2019 to GBP509.7 million from GBP580.5 million in 2018, as net earned premium slipped by 3.4% to GBP2.95 billion from GBP3.09 billion.
"We have delivered a good set of results, and continued to improve the quality, while navigating a difficult motor market and delivering significant change in the business," said Chief Executive Penny James.
Looking ahead, Direct Line said the UKK motor insurance market began to show signs of improvement in the second half of 2019, helping the company to return to growth, while its other major markets were "competitive".
James added: "We remain on track to achieve the operational and financial targets we outlined at our Capital Markets Day and are excited about our delivery plan for 2020."
At its Capital Markets Day at the end of November 2019, Direct Line said it was aiming to improve its operating expense ratio to 20% by the end of 2023 so it is more sustainably competitive.
In 2019, Direct Line said it has reduced operating expenses before restructuring and one-off costs by 3.4% to GBP693.7 million. Lower operating expenses helped the company to maintain the expense ratio at 23.2%, it said.
Direct Line declared a 14.4 pence a share dividend for 2019, up 2.9% year-on-year. The company also launched a share buyback of up to GBP150 million, which it said it expects to complete by the end of July.
Direct Line shares were trading 5.8% higher in London on Tuesday morning at 330.40p each.
By Evelina Grecenko; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Direct Line