Direct Line Group has suffered a massive hit in its gross written premium (GWP) thanks to its exit from home insurance partnerships.
Overall GWP in the third quarter fell 5.8% to £854.5 million, largely because of the 92.6% plunge for home policies with Nationwide and Sainsbury’s. For Direct Line Group’s own home brands, GWP went up 0.9% to £115.3 million while partnerships declined 50%.
“Premiums in the partnerships channel decreased by £51.3 million, primarily due to the exit from the Nationwide and Sainsbury’s partnerships,” reported the Bromley-based firm.
“The group expects claims inflation to remain within the group’s long-term expectation of 3% to 5% and that subsidence claims, including those associated with the dry summer weather in the UK, will not materially be above normal annual expectations.”
The motor insurance unit also reported lower GWP at £456.4 million. Direct Line Group said the 1.2% decrease was a result of lower average premiums primarily due to changes to propositions in the price comparison channel and only partially offset by positive rate movements.
Meanwhile rescue and other personal lines GWP in the third quarter rose 3.1% to £113.4 million as commercial slid 0.2% to £118 million. As for the nine-month period to September 30, the insurance group saw a 5.3% drop to £2.5 billion in total GWP.
Chief executive Paul Geddes, however, is unfazed.
“The group’s performance during the quarter was robust in a competitive market,” he commented. “We continued to grow our direct own brands in-force policies while maintaining discipline on loss ratios.
“We are delivering our key strategic priorities, including strong growth in our direct rescue and commercial businesses, Green Flag and Direct Line for Business, and we are on track to begin rolling out our new personal lines systems in 2019.”
Geddes added: “Overall, we are making good progress on our strategic priorities and are on course to meet our 2018 and medium-term financial targets.”
