|
Direct Line Insurance Group PLC on Monday reported a swing to loss last year, as it suffered the highest weather catastrophe costs since its listing. The Bromley, England-based motor and home insurer reported a pretax loss in 2022 of £45.1 million, swinging from a pretax profit of £446.0 million in 2021. Gross earned premiums fell by 1.1% to £3.13 billion from £3.17 billion a year ago. The company said its combined operating ratio was 106%, up from 90% in 2021. The company said combined operating ratio normalised for weather was 103%. A combined operating ratio above 100% means a loss on underwriting. Direct Line noted that 2022 saw the highest weather event costs since the company’s listing, with £149 million in claims, well above the company’s budget assumption of £73 million. The company said prolonged periods of sub-zero temperatures in Scotland and North West England accounted for £95 million of these claims. No final dividend was declared by the company, resulting in a total dividend of 7.6 pence per share in 2022, down 67% from 22.7p per share a year ago. Acting Chief Executive Officer Jon Greenwood said: ‘2022 was a tough year for Direct Line Group. Motor and Home market conditions were challenging, with high claims inflation and regulatory reforms creating substantial headwinds for the business, and we did not navigate these challenges as effectively as we would have wished. Exceptional weather and difficult investment markets also significantly impacted our results. ‘Motor, in particular, was affected by high claims inflation, which remained ahead of our expectations throughout the year, as well as the impact of regulatory changes. We have taken pricing actions that will support restoration of margins in Motor and mitigate the impact of further claims inflation.’ In 2022, the company saw 14% claims inflation in its Motor insurance business. Looking ahead, Greenwood said: ‘Whilst our 2022 performance was disappointing, the fundamentals of our business remain strong and we are now fully focused on rebuilding our margins, further improving our capital strength and generating attractive sustainable returns for shareholders.’ Direct Line shares fell 6.2% to 157.25 pence each in London on Monday morning. Copyright 2023 Alliance News Ltd. All Rights Reserved.
|
