Shares in Direct Line Group (LON:DLG) have fallen into the red in London in today’s session as the blue-chip insurer revealed that it would take a £50-million hit related to the recent cold weather snap in the UK. The company further posted a fall in gross written premiums for the first quarter of the year.
As of 10:29 BST, Direct Line’s share price had given up 3.08 percent to 364.70p, underperforming the broader UK market with the benchmark FTSE 100 index currently standing 0.66 percent higher at 7,570.15 points. The group’s shares have added more than six percent to their value over the past year, as compared with about a 4.4-percent gain in the Footsie.
Direct Line posts results
Direct Line said in a statement this morning that its gross written premiums had fallen five percent to £769.9 million in the first quarter of the year. The company further disclosed that the claims related to the ‘major freeze’ seen during the reported period were expected to be in the region of £50 million post tax.
“The freezing weather earlier this year hit many drivers, households and businesses hard,” the company’s chief executive Paul Geddes commented in the statement, adding that the company estimated that the claims associated with the ‘Beast from the East’ would utilise the group’s full annual weather budget.
Analysts on blue-chip group
Both Peel Hunt and Numis Securities reaffirmed Direct Line as an ‘add’ today, without specifying a price target on the shares. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 408.43p.
Today’s update follows Direct Line’s full-year results in March when the blue-chip insurer posted a rise in profits and gross written premiums.