Direct Line sticks with guidance despite falling premiums in Q1

2nd May 2014 08:18

Insurer Direct Line reiterated guidance for its combined operating ratio but admitted that premiums fell in the first quarter.Gross written premiums totalled £949.3m in the first three months of the year, down 5.1% at constant currency from the first quarter of 2013, as growth in the Commercial business and an improvement in Germany was offset by "competitive market conditions" in UK personal lines.Motor gross written premiums in particular were 10.2% down at £326.9m, while Home and Rescue premiums also fell.The number of 'in-force' policies fell by 2.1% during the three months to 18.1m from 18.5m at December 31st, and were 6.7% lower than the 19.4m reported the year before."The UK motor and home markets are highly competitive. The group will continue to prioritise targeting appropriate margins, even if this is at the expense of policy volumes," Direct Line said in a statement.The company said it still aims to achieve a combined operating ratio - a key measure of profitability in the insurance industry - of 95-97% for the full year.The stock was 1.9% higher at 252.4p by 09:33 on Friday.BC