Competitive motor sector sees insurer's premiums fall.
INSURANCE premiums fell at Direct Line in the first three months of the year amid "tough" competition.
The insurer saw overall premiums decline by 2.1% to PS753.9m in the first quarter, as growth in its motor insurance business failed to keep up with higher claims from customers.
The "highly competitive" trading environment kept premiums low despite increasing compensation payouts.
The motor insurance division saw premiums slide 4.2% to PS386.9m, down from PS404m in the same quarter last year.
Direct Line's home insurance business, which includes the Churchill and Privilege brands, remained stable, reporting a 0.6% rise in premiums to PS96.6m.
However, home partnerships dropped by 5.7% to PS44.6m as it blamed a "continued run-off on certain contracts".
It saw strong growth for its Green Flag and Direct Line for Business arms, which reported increases in premiums of 15.8% and 8.1% respectively.
Green Flag's growth boosted the rescue division, which saw premiums increase by 1.7% to PS105.4m. Direct Line's commercial division also delivered growth, as premiums rose by 1.2% to PS120.4m for the period.
Current chief financial officer Penny James will start her tenure as chief executive this week, taking over from outgoing boss of 10 years Paul Geddes.
Ms James said: "The first quarter was characterised by significant operational progress in a tough trading environment.
"The motor market remained highly competitive, with market premiums failing to keep pace with claims inflation. The home market has been slightly less challenging than motor but remained competitive."
The insurance group remains on target to keep operating expenses for the year below PS700m as it looks to pare back costs, it added.
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|Publication:||The Journal (Newcastle, England)|
|Date:||May 9, 2019|
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