Direct Line Insurance Group Plc (Direct Line Group or DLG) chief executive Penny James (pictured) has spoken up about the recent turn of events at the Bromley-based insurer, including the dive in the company’s share price.
The plunge came after DLG issued its trading update last week, during which it was revealed that a final dividend for the 2022 financial year was no longer in the offing. The below chart from the London Stock Exchange shows that the share price prior to DLG’s update was 232.4p. On the day of the announcement, the price closed at 177.8p, before falling further to 175.95p last Friday.
Source: London Stock Exchange
In DLG’s trading update, the company said its total weather claims for 2022 were estimated to be around £140 million – more than double the initial expected sum of £73 million.
“We were surprised by the size of the weather events, so we were confident that the market would also be surprised,” said James in an interview with The Sunday Times following the market’s reaction.
The CEO, who asserted that the drop in share price isn’t a reflection of DLG’s intrinsic value, told the publication: “It’s incredibly frustrating to have had such a challenging end to last year… The frustration is that our shareholders won’t be receiving a dividend this year, but it’s also because we thought we had positive momentum coming into the fourth quarter.”
Last July, the insurer noted having had to increase premiums and deploy new pricing capability to restore margins. Meanwhile, according to DLG, it continues to pursue a range of management actions aimed at rebuilding balance sheet resilience.
