Monday 8 March 2021 7:44 am

Direct Line profit slumps as major costs hit home insurance division

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.

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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.

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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.”