Direct Line Insurance Group has reported better than expected results in its first half dividend.
Britain’s largest motor insurer achieved a 39% rise in its interim dividend, a result that has seen shares in the company jump to a record high.
The company, with brands including
Churchill, Green Flag and Privilege, announced it had written £1.69 billion of premiums in the first half, as well as recording an operating profit of £354 million. It also noted a 10% rise in gross written motor premiums at a time of intense competition and change in British motor insurance.
“The Group delivered another strong first half performance, as we continued to focus on giving customers what they want,” said Direct Line chief executive, Paul Geddes, as reported by Reuters and The Financial Times. “In particular, we are pleased with the continued momentum in our Direct Line brand, which shows that customers value the great service and unique insurance propositions we are offering in both personal lines and commercial lines.”
Shares in the company rocketed by 7.6% to 403 pence, making Direct Line the top gainer in the FTSE 350 index of non-life insurance companies. The previous record high was 399.1 pence on December 17, 2015. Direct Line also announced its solvency capital ratio rose to 173% from 165%.
While announcing the results, the company said future changes in the dividend will reflect growth of the business, which it expects to be around 2-3% per year.
Geddes commented: “Today the board is rebasing the Group’s regular dividend upwards to reflect its confidence in the Group’s earnings and the progress the business has made since the IPO nearly five years ago when the Group’s dividend policy was previously set.”
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