Direct Line’s prices exceed expectations
Direct Line Insurance, Britain’s largest motor insurer, reported a bigger than expected rise in motor insurance prices for the third quarter, helping to boost its sales.
The insurance firm, whose brands include Churchill, Green Flag and Privilege, announced an 8.4 per cent rise in risk-adjusted motor prices. The company also stated it had cut costs by 7 per cent in the first nine months of the year.
Shares in Direct Line rose 1.3 per cent to 396.4 pence, making the stock one of the top gainers on the blue chip FTSE-100 index.
Direct Line said gross written premiums rose 3.1 per cent to 844.5 million pounds ($1.3 billion) in the third quarter, with a 6.8 percent rise in gross written motor premiums.
‘This is a good headline increase, and management indicate this is where they need to be to pricing to meet their target loss ratio,’ Morgan Stanley said in a note to clients.
Direct Line, which competes with Admiral Group, RSA Insurance and Aviva Plc, also said it had benefited from the absence of claims due to major weather events and was on track to achieve its 2015 targets.