Tuesday 10 November 2020 7:34 am

Direct Line premiums stabilise as insurance market climbs back

Direct Line today posted flat trading for the third quarter as shopping habits began to recover after a decline sparked by the coronavirus outbreak.

The insurance group said its total written premiums slipped a marginal 0.8 per cent to £851.5m in the three months to the end of September.

Read more: Supreme Court to hear FCA business interruption insurance appeal this month

The performance was primarily driven by growth in its Green Flag and commercial divisions, which were up 9.6 per cent and 12.4 per cent respectively.

Direct Line’s motor own-brand policies remained flat over the quarter as shopping began to return to pre-pandemic levels.

But average premiums were lower due to a fall in new car sales and fewer young drivers entering the market, as well as modest market premium deflation.

This led to a reduction in own-brand gross written premium of 1.4 per cent compared to the same period last year.

The insurer said there was no change to its previous estimate of Covid-19 impact, which it has forecast as £10m and £25m for business interruption and travel claims respectively.

Direct Line also warned of uncertainty following a report published by the Financial Conduct Authority in September, which outlined major changes to pricing practices in the insurance market.

Read more: RSA, Hiscox and others drop appeal against Covid-19 business interruption insurance payout rulings

“We are encouraged by our trading performance in the third quarter where we saw a return to strong growth in Green Flag and commercial and some improvement in motor and home own brands, particularly in the price comparison website channel as customer shopping activity started to recover,” said chief executive Penny James.

“This progress is testament to the flexibility and commitment of our people who have been successfully navigating through the Covid-19 pandemic, delivering good operational progress, providing extra support for our customers and helping local communities.”

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