Fewer car sales and new drivers hits brakes on Direct Line growth
Insurer Direct Line today said that low levels of new car sales and fewer new drivers led to deflationary market conditions during the first quarter.
The firm’s total group premiums fell 4.7 per cent year-on-year to £752.3m, with motor premiums plummeting 10.6 per cent to £367.3m.
Elsewhere, Direct Line continued to deliver growth in its home and commercial divisions, which grew 1.8 per cent and 16.1 per cent respectively.
The company also acquired a new auto services repair centre, which it says will become increasingly important when more people start driving again.
Penny James, CEO of Direct Line, said that the first quarter saw similar market trends to those at the end of 2020.
“Against this backdrop, we maintained our disciplined underwriting and our five per cent reduction in average premium versus Q1 2020 was less than the market reduction.
“This focus on maintaining the quality of our business leaves us well placed as lockdown restrictions are eased. Looking forward, encouraging early indications suggest that motor market premiums stabilised during April.”