Direct Line Insurance Group Plc (Direct Line Group or DLG) has detailed its adjusted gross written premium figures in a trading update for the first quarter of the year.
According to DLG, adjusted gross written premium includes the impact of a contractual change to Green Flag Rescue premium such that a portion of income that was previously included in GWP is now included in service fees. Supporting comparability with prior period GWP, the measure has been in effect since January 2022.
Here are the adjusted GWP numbers for the insurance group in the first quarter:
|
Source |
Adjusted GWP – Q1 2023 |
Adjusted GWP – Q1 2022 |
|---|---|---|
|
Motor |
£358.7 million |
£347.3 million |
|
Home |
£129 million |
£126.4 million |
|
Rescue and other personal lines – ongoing operations |
£64.7 million |
£66.1 million |
|
Commercial |
£219.3 million |
£171.9 million |
|
Run-off partnerships |
£34 million |
£22.6 million |
|
Total group |
£805.7 million |
£734.3 million |
“Trading has been positive over the first quarter with premium growth across motor, home, and commercial, and this trend has continued into April,” said acting chief executive Jon Greenwood. “Our focus continues to be on restoring the capital strength of the group and improving motor margins, where we have made good progress.
“While 2023 earnings outlook continues to be challenging, the group has many strengths, and we continue to take the actions required to drive business performance. Our ambition over time to generate a net insurance margin of above 10% remains.”
DLG highlighted that it continued to take pricing action in motor in the first quarter, resulting in a 19% jump in average renewal premiums. Meanwhile, it was noted that significant price increases were observed across the home market. For DLG’s commercial business, GWP growth was driven by both direct own brands as well as NIG and other.
In terms of claims and reserving, the insurer had this to say: “We have experienced further adverse claims development in respect of late 2022 and early 2023 in motor (including commercial motor) particularly in relation to damage. This is expected to put pressure on earnings in 2023 including from prior-year reserve releases.”
Weather event claims, meanwhile, were described as modest and “well within” DLG’s 2023 full-year assumption of £80 million.
“Our forward view of claims inflation remains unchanged at high single digits across motor and home, albeit there continues to be a range of potential outcomes depending on future economic conditions,” added DLG.
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