Direct Line saw profit drop in 2020 as weather-related costs in its home insurance line offset a strong performance in its motor business.
The firm said operating profit fell 4.5 per cent to £522m, while pre-tax profit plummeted 11.4 per cent to £451m.
Weather costs increased to £43m from £6m in 2019, while gross written premiums edged 0.7 per cent lower to £3.18bn.
Direct Line said it would buyback up to £100m of shares and declared a final dividend of 14.7p.
Penny James, CEO of Direct Line, remained positive in the wake of the results.
“We are a business that is proud to deliver strong returns to shareholders and to challenge itself to be a force for good,” James said.
“Turning to the year ahead, we feel confident that we can build on the momentum we’ve created and become a tech and data driven insurance company of the future with our customers at its heart.”