Direct Line Insurance Group PLC reported a strong performance in the first half of 2024, highlighted by a 53.5% growth in gross written premiums and associated fees, largely driven by its Motability partnership, which commenced in September 2023.
Excluding the Motability business, growth stood at 11.4%, supported by pricing actions across key segments, including motor, home, commercial direct, and rescue.
In-force policies declined by 3.1% overall, with motor policies falling by 4.8% and non-motor policies decreasing by 1.6%. The company's own-brand motor policies were down 7.5%, while non-motor policies saw a slight increase of 0.2%.
The insurer's net insurance margin for the period stood at 1.8%, buoyed by an 11.6% margin in non-motor lines. This was partially offset by a negative 3.0% margin in the motor segment, which was impacted by the continued recognition of policies written in the first half of 2023. However, motor margins during the first half of 2024 were estimated to have remained above 10%.
Overall, Direct Line reported an operating profit of £64 million for the first half of 2024, marking a £157 million improvement compared to the prior year. Group profit before tax rose to £62 million, £138 million ahead of the previous year. The group's solvency capital ratio, post-dividend, stood at 198%, and a dividend of 2.0 pence per share was declared.
Direct Line’s strategy, refreshed during a July Capital Markets Day, outlined several key objectives aimed at driving profitable growth and positioning the company as a top choice for customers.
Among the targets were the launch of Direct Line on price comparison websites, a focus on achieving 7-10% annual growth in gross written premiums for non-motor lines between 2023 and 2026, and delivering at least £100 million in gross cost savings by the end of 2025. The company also aims to achieve a 13% net insurance margin by 2026.
The revised dividend policy, also announced in July, targets a payout ratio of approximately 60% of post-tax operating profit for regular dividends, with additional capital returns to be reviewed annually, depending on solvency capital growth.
Direct Line CEO Adam Winslow (pictured above) noted the positive impact of the company's initiatives, emphasising strong premium growth and a return to profitability during the first half of the year.
While acknowledging the progress made, Winslow stated that further transformation is needed, particularly as the company's management team continues to evolve.
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