Oh yes! Direct Line launched to the top of the FTSE 100 leaderboard

 
Oliver Gill
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Direct Line saw a large chunk of 2016 profits wiped away by a government decision to slash the discount rate (Source: Direct Line)

Direct Line jumped to the top of the FTSE 100 leaderboard this lunchtime after revealing annual results will beat expectations.

Shares jumped almost four per cent minutes after the announcement was made at 12pm, before losing ground but remaining two per cent up on yesterday's closing price.

Profit before tax will be £540m, up from £353m last year. Meanwhile, the insurer said it was mulling a return of capital. Further details on this would be provided on 27 February.

Chief executive Paul Geddes said he was "proud" of Direct Line's performance, adding:

The combination of our operating performance and favourable claims result has delivered financial results ahead of market expectations. Therefore we are publishing our headline results early.

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Direct Line's combined ratio – a key insurance metric that compares costs and losses to revenues – fell from 97.7 per cent to 92 per cent.

Gross written premiums were £3.4bn, up from £3.27bn and with 350,000 more direct own brand in-force policies.

Direct Line suffered a tricky 2017 after first taking a £217m hit to its 2016 figures after the government slashed the discount rate – a reference percentage against which personal injury claims are calculated.

It next had to suffer summer reports boss Geddes was preparing to depart for the top job at ITV before flagging a big systems impairment in November.

"Our customers continued to respond positively to the multiple initiatives we have made to improve the business, helping to grow our direct own brand premiums and in-force policies," said Geddes.

Read more: Insurers facing £2bn boost after discount rate U-turn

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