Direct Line share price: shares in the insurer up in morning trading on interim management statement
iNVEZZ, Friday, May 2: (RTT News) Direct Line Insurance Group PLC said that its Gross written premium for the first-quarter was 949.3 million pounds, down 5.6% from the prior year’s 1.006 billion pounds, with currency movements accounting for 0.5 percentage points of the decrease. This reflected the impact of a competitive market, particularly in UK motor and home, together with the Group’s continued focus on maintaining its underwriting discipline, partially offset by growth in Commercial and in Germany.
Rescue and other personal lines gross written premium decreased by 5.6% compared with the same quarter in the prior year. Adjusting for the Life business, which was disposed of in November 2013, underlying gross written premium for Rescue and other personal lines was up 3.2% primarily relating to Rescue.
International gross written premium of 196.0 million pounds was 2.6% lower than the previous period mainly due to the effect of foreign currency movements. Gross written premium for Germany in local currency increased by 9.1%, reflecting the expansion of the Group’s share of business renewing on 1 January 2014.
Overall the Group reduced motor prices on average by 4% during the first quarter of 2014 compared with the first quarter of 2013. This reduction was supported by positive claims trends and technical pricing initiatives. Claims trends benefited from the Group’s claims transformation programme, but also recognised the positive effect of recent legal reforms. Risk mix reduced during the first quarter of 2014, albeit at a slower pace than previous quarters.
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As previously indicated, the Board recommended a final dividend of 8.4 pence per share for shareholder approval at the Annual General Meeting on 15 May 2014. The Board has also previously announced a second special interim dividend of 4.0 pence per share, partly attributable to the sale of Tracker. The shares have traded ex dividend since 11 March 2014. The payment date for both dividends is 20 May 2014.
For 2014, the Group aims to achieve a combined operating ratio in the range of 95% to 97% for ongoing operations, assuming a normal level of claims from weather events, and a combined operating ratio of less than 100% for its Commercial division, assuming a normal level of claims from weather-related events and large losses.
**As of 09:00 BST buy Direct Line shares at 254.00p**
**As of 09:00 BST sell Direct Line shares at 253.70p**