Tuesday 8 November 2016 4:26 pm

Direct Line motors ahead of expectations despite whiplash concerns


Oliver Gill is a City A.M. reporter, you can contact him on oliver.gill@cityam.com

Oliver Gill is a City A.M. reporter, you can contact him on oliver.gill@cityam.com

Direct Line's share price edged up slightly today after revealing a strong nine month performance from its motor brands.

Shares were up around 0.5 per cent after the company said that the amount of motor insurance the group had written increased by 10 per cent. Overall gross written premiums were up by 4.2 per cent compared with the previous year at £2.5bn.

[stockChart code="DLG" date="2016-11-08 16:22"]


Chief executive Paul Geddes said that the group, which owns brands such as Churchill and Green Flag, "had traded well this quarter with good policy and premium growth". 

He added: "We have achieved this while maintaining our underwriting discipline."

Read more: Direct Line zooms to top of FTSE 100 after generous special dividend

Although the overall premium number was slightly ahead of company supplied consensus analyst opinion of £2.48bn, it was the motor division that surprised analysts.

"Encouragingly underlying motor margins continue to expand and will be earned into 2017. DLG interestingly continues to grow motor policy count ahead of our expectations," said Andreas van Embden of Peel Hunt.

Read more: Here's one more way the cost of motoring is sky-rocketing


However Eamonn Flanagan of Shore Capital raised the thorny topic of raised motor claims.

"We again remind readers of the AA Insurance’s warning of a continuing 'whiplash epidemic' in the UK… the claims environment remaining a major concern for us."

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