DIRECT LINE INSURANCE GROUP
PLC
TRADING UPDATE FOR
Q1 20241
A POSITIVE START TO 2024
TRADING
8 May 2024
Adam Winslow, CEO of Direct Line Group,
commented
"We have seen a positive start to
2024 trading, with double digit gross written premium growth in our
Motor, Home and Commercial businesses and overall growth for
ongoing operations of 15.0%. Claims trends and Motor margins
continue to develop in line with our expectations.
"We have announced a number of
significant hires over the last few weeks. I am confident that with
the new leadership team in place, we can deliver run-rate
annualised cost savings of at least £100 million by the end of 2025
and a net insurance margin, normalised for weather, of 13% in
2026.
"I look forward to sharing our
refreshed strategy to deliver higher returns and the progress we
have made against the immediate priorities to improve performance
at our Capital Markets Day on 10th July 2024."
Trading summary
|
3 months
|
3
months
|
Change to
3 months 2023
|
|
2024
|
2023
|
|
£m
|
£m
|
Gross written premium and associated fees
|
|
|
|
Motor direct own
brands2
|
400.1
|
352.9
|
13.4%
|
Motor
partnerships3
|
24.2
|
5.8
|
N/A3
|
Motor
|
424.3
|
358.7
|
18.3%
|
Home direct own
brands2
|
110.5
|
94.4
|
17.1%
|
Home partnerships
|
36.8
|
34.6
|
6.4%
|
Home
|
147.3
|
129.0
|
14.2%
|
Green Flag Rescue
|
20.3
|
19.4
|
4.6%
|
Other Rescue and other personal
lines
|
43.2
|
45.3
|
(4.6%)
|
Rescue and other personal lines
|
63.5
|
64.7
|
(1.9%)
|
Commercial direct own brands2
|
71.7
|
62.4
|
14.9%
|
Ongoing operations4
|
706.8
|
614.8
|
15.0%
|
Brokered commercial
insurance4
|
155.1
|
156.9
|
(1.1%)
|
Run-off
partnerships4
|
30.3
|
34.0
|
(10.9%)
|
Total Group
|
892.2
|
805.7
|
10.7%
|
|
31 Mar 2024
|
31 Dec
2023
|
Change to
31 Dec 2023
|
In-force policies - ongoing operations4
(thousands)
|
9,268
|
9,442
|
(1.8%)
|
Trading update
- Gross written premium
and associated fees for ongoing operations up 15.0% on Q1 2023 with
strong growth in Motor, Home and Commercial direct.
- In-force policies were
1.8% lower. As expected, Motor volumes were lower due to the
continued repricing of the Motor book, whilst Home own brands
in-force policies saw modest growth.
- Motor claims trends in
line with expectations, with estimated written margins maintained
above 10%.
- Q1 saw several periods
of adverse weather which led to around £33 million of weather
claims in Home, of which £24 million was event related, compared
with our annual event assumption in Home of £54 million.
For
further information, please contact
|
|
|
PAUL SMITH
DIRECTOR OF BUSINESS PERFORMANCE AND
INVESTOR RELATIONS
|
|
ALAN OLIVER
GROUP COMMUNICATIONS
|
Email:
paul.r.smith@directlinegroup.co.uk
|
|
Email:
alan.oliver@directlinegroup.co.uk
|
Mobile: +44 (0)7795
811263
|
|
Mobile: +44 (0)7385
481295
|
APPENDIX 1: Gross written premium and associated
fees
|
Q1 2024
|
Q4
2023
|
Q3
2023
|
Q2
2023
|
Q1 2023
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross written premium and associated fees
|
|
|
|
|
|
Motor direct own
brands2,5
|
400.1
|
422.0
|
435.1
|
391.3
|
352.9
|
Motor
partnerships3,5
|
24.2
|
40.3
|
391.7
|
8.7
|
5.8
|
Motor
|
424.3
|
462.3
|
826.8
|
400.0
|
358.7
|
Home direct own
brands2
|
110.5
|
118.1
|
107.2
|
89.1
|
94.4
|
Home partnerships
|
36.8
|
36.3
|
37.2
|
34.6
|
34.6
|
Home
|
147.3
|
154.4
|
144.4
|
123.7
|
129.0
|
Green Flag Rescue
|
20.3
|
16.5
|
27.7
|
21.5
|
19.4
|
Other Rescue and other personal
lines
|
43.2
|
42.0
|
48.5
|
44.9
|
45.3
|
Rescue and other personal lines
|
63.5
|
58.5
|
76.2
|
66.4
|
64.7
|
Commercial direct own brands2
|
71.7
|
58.8
|
63.0
|
56.8
|
62.4
|
Ongoing operations4
|
706.8
|
734.0
|
1,110.4
|
646.9
|
614.8
|
Brokered commercial
insurance4
|
155.1
|
174.7
|
137.5
|
196.7
|
156.9
|
Run-off
partnerships4
|
30.3
|
43.3
|
34.5
|
38.3
|
34.0
|
Total Group
|
892.2
|
952.0
|
1,282.4
|
881.9
|
805.7
|
APPENDIX 2: In-force policies by segment4
(thousands)
|
31 Mar
2024
|
31
Dec
2023
|
30
Sep
2023
|
30
Jun
2023
|
31
Mar
2023
|
Motor direct own
brands2
|
3,235
|
3,373
|
3,441
|
3,607
|
3,669
|
Motor
partnerships3
|
837
|
808
|
795
|
66
|
72
|
Motor
|
4,072
|
4,181
|
4,236
|
3,673
|
3,741
|
Home direct own
brands2
|
1,721
|
1,706
|
1,686
|
1,705
|
1,731
|
Home partnerships
|
729
|
738
|
748
|
759
|
765
|
Home
|
2,450
|
2,444
|
2,434
|
2,464
|
2,496
|
Green Flag Rescue
|
1,036
|
1,048
|
1,062
|
1,093
|
1,073
|
Other Rescue and other personal
lines
|
1,069
|
1,124
|
1,134
|
1,196
|
1,275
|
Rescue and other personal lines
|
2,105
|
2,172
|
2,196
|
2,289
|
2,348
|
Commercial direct own brands2
|
641
|
645
|
652
|
645
|
643
|
Ongoing operations4
|
9,268
|
9,442
|
9,518
|
9,071
|
9,228
|
Brokered commercial
insurance4
|
281
|
286
|
291
|
293
|
287
|
Run-off
partnerships4
|
2,543
|
2,224
|
2,221
|
2,199
|
2,187
|
Total Group
|
12,092
|
11,952
|
12,030
|
11,563
|
11,702
|
APPENDIX 3: Motor and Home average premium
(£)
£
|
Q1 2024
|
Q4
2023
|
Q3
2023
|
Q2
2023
|
Q1 2023
|
New business
|
599
|
594
|
588
|
532
|
478
|
Renewal
|
515
|
513
|
480
|
412
|
373
|
Motor direct own
brands6
|
541
|
537
|
507
|
445
|
401
|
New business
|
238
|
212
|
214
|
204
|
188
|
Renewal
|
261
|
259
|
257
|
249
|
230
|
Home direct own brands
|
257
|
249
|
250
|
243
|
224
|
Notes:
1. The Trading
Update relates to the three months ended
31 March 2024 and contains information to the date of
publication.
2. Direct own
brands include in-force policies for Motor under the Direct Line,
Churchill, Darwin, Privilege and By Miles brands, Home under the
Direct Line, Churchill and Privilege brands and Commercial direct
policies under the Direct Line and Churchill brands.
3. Motor
partnerships includes the Motability partnership, which started on
1 September 2023, and resulted in significant growth in the third
quarter of 2023. From 2024, the majority of Motability gross
written premium is recognised twice a year on 1 April and 1
October. As the Motability contract is a fleet contract, customer
numbers are used to allow a more representative presentation of the
Group's in-force policies.
4. Ongoing
operations - the Group's ongoing operations result excludes the
results of the brokered commercial business, that it sold to RSA
Insurance Limited in 2023, and the Rescue and other personal lines
partnerships that the Group first excluded from its 2022 results.
Relevant prior-year data has been restated accordingly.
5. Gross written
premiums for the By Miles brand which were previously reported
within Motor partnerships have been reallocated to Direct Own
Brands. There is no impact on in-force policies.
6. Excluding the By
Miles brand.
Forward-looking statements disclaimer
Certain information contained in
this document, including any information as to the Group's
strategy, plans or future financial or operating performance,
constitutes "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "aims", "ambition", "anticipates",
"aspire", "believes", "continue", "could", "estimates", "expects",
"guidance", "intends", "may", "mission", "outlook", "over the
medium term", "plans", "predicts", "projects", "propositions",
"seeks", "should", "strategy", "targets", "vision", "will" or
"would" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not
historical facts. They may appear in several places throughout this
document and include statements regarding intentions, beliefs or
current expectations, including of the Directors, concerning, among
other things: the Group's results of operations, statement of
financial position, financial condition, prospects, growth, net
insurance margin, insurance service result, strategies, the
industry in which the Group operates and the Group's approach to
climate-related matters. Examples of forward-looking statements
include financial targets which are contained in this document with
respect to return on tangible equity, solvency capital ratio, net
insurance margin, combined operating ratio, percentage targets for
current-year contribution to operating profit, prior-year reserve
releases, cost reductions, reduction in net expense ratio,
investment income yield, net realised and unrealised gains, capital
expenditure and risk appetite range; and targets, goals and plans
relating to climate and the Group's approach and strategy in
connection with climate-related risks and opportunities. By their
nature, all forward-looking statements involve risk and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and/or are
beyond the Group's control and/or they rely on assumptions that may
or may not transpire to be correct. Forward-looking statements are
not guaranteeing future performance.
The Group's actual results of
operations, financial condition and the development of the business
sector in which the Group operates may differ materially from those
suggested by the forward-looking statements contained in this
document, for example directly or indirectly as a result of, but
not limited to:
- United Kingdom
("UK") domestic and global
economic business conditions;
- the Trade and Cooperation Agreement between the UK and the
European Union ("EU") regarding the terms of the trading relationships between
the UK and the EU and its implementation, and any subsequent
trading and other relationship arrangements between the UK and the
EU and their implementation;
- the terms of trading
and other relationships between the UK and other countries
following Brexit;
- the impact of the
FCA's PPR regulations and Consumer Duty regulations and of
responses by insurers, customers and other third parties and of
interpretations of such rules by any relevant regulatory
authority;
- market-related risks
such as fluctuations in interest rates, exchange rates and credit
spreads, including those created or exacerbated by the war in
Ukraine following the Russian invasion and/or the conflict in the
Middle East involving Israel and Gaza;
- the policies and
actions and/or new principles, rules and/or regulations, of
regulatory authorities and bodies, and of changes to, or changes to
interpretations of, principles, rules and/or regulations (including
changes made directly or indirectly as a result of Brexit or
related to capital and solvency requirements or related to the
Ogden discount rates) and of changes to law and/or understandings
of law and/or legal interpretation following the decisions and
judgements of courts;
- the impact of
competition, currency changes, inflation and deflation;
- the timing, impact and
other uncertainties of future acquisitions, disposals, partnership
arrangements, joint ventures or combinations within relevant
industries; and
- the impact of tax and
other legislation and other regulation and of regulator
expectations, requirements, interventions, enforcements, fines and
requirements and of court, arbitration, regulatory or ombudsman
decisions, judgements and awards in the jurisdictions in which the
Group and its affiliates operate.
In addition, even if the Group's
actual results of operations, financial condition and the
development of the business sector in which the Group operates are
consistent with the forward-looking statements contained in this
document, those results or developments may not be indicative of
results or developments in subsequent periods.
The forward-looking statements
contained in this document reflect knowledge and information
available as of the date of preparation of this document. The Group
and the Directors expressly disclaim any obligation or undertaking
to update or revise publicly any forward-looking statements,
whether because of new information, future events or otherwise,
unless required to do so by applicable law or regulation. Nothing
in this document constitutes or should be construed as a profit
forecast.
Neither the content of Direct Line
Group's website nor the content of any other website accessible
from hyperlinks on the Group's website is incorporated into, or
forms part of, this document.
LEI: 213800FF2R23ALJQOP04