Direct Line reported higher interim earnings on Tuesday on the back of lower motor claims as the Covid pandemic kept drivers off roads during lockdowns.
The owner of the Churchill, Green Flag and Darwin brands reported a £370m operating profit for the six months to June 30, up from £265m a year ago.
Continuing premiums growth in commercial, home and Green Flag rescue was offset by declines in motor and travel, the company said. Motor gross written premium fell 6.2%.
“In motor we saw claims frequency remain below normal levels, fewer new car sales and a reduction in new drivers entering the market. These factors were strongest in Q1 and have started to reverse in Q2 at the same time as motor market premium stabilised,” said chief executive Penny James.
The company declared an interim dividend of 7.6p a share, up 2.7%, and said it would be launch the second £50 million tranche of the £100 million share buyback programme announced with its last year end results.
“For 2021, following lower motor claims frequency and strong prior-year reserve releases in the first half, we now expect our combined operating ratio to be in the range of 90% to 92%, normalised for weather,” the company said.
