Direct Line Insurance Group PLC (Direct Line Group) has revealed its financial results for the year concluding on December 31, 2023 (FY23).
The group saw its gross written premiums and related fees surge to £3,106.0 million – a 27.1% rise from the prior year. However, despite this increase, it faced a net insurance margin decline at -8.3%, coupled with an operating loss of £189.5 million.
Meanwhile, the insurer’s solvency capital ratio before dividends improved to 201%, with a dividend of 4.0 pence per share being proposed.
Direct Line CEO Adam Winslow highlighted the significant efforts made to fortify the business, particularly focusing on enhancing the motor insurance division’s performance.
“The group has not always managed volatile market conditions successfully in recent years, particularly in motor,” he said. “However, it is clear that the decisive actions that Jon Greenwood and the team have taken over the last year have created a strong platform for recovery, including significant pricing and underwriting actions to improve our motor margins and the sale of our brokered commercial business. This has enabled the board to propose a dividend of four pence per share and for the group to have a strong post-dividend solvency capital ratio of 197% at year-end 2023.”
The year’s financial breakdown showed a stable policy count, bolstered by the integration of over 700,000 new customers from the Motability partnership, which helped balance out declines in other areas.
In the motor insurance segment, rate adjustments led to a marked improvement in the net insurance claims ratio. Despite an expanded operating loss from the previous year, partly due to a challenging net insurance margin, gains from increased investment income and the sale of the commercial business segment helped offset some of the losses.
Direct Line Group is undergoing a strategic overhaul aimed at refining its operational efficiency, with a keen focus on cost reduction, claims management improvement, and pricing optimisation. The company plans to capitalise on its strong brand identities, such as Direct Line and Churchill, to enhance its market presence and customer segmentation strategy.
Through strategic measures and a focus on operational excellence, Direct Line Group claims it is on a path to achieve its 2026 targets and enhance value for its shareholders.
The company has set a goal to reach a 13% net insurance margin by 2026, supported by a strategic initiative to cut costs by a minimum of £100 million by the close of 2025, measured on a yearly run-rate basis.
