Financial performance

Definition

The return generated on the capital that shareholders have in the business. This is calculated by dividing adjusted earnings by average tangible equity.

Aim

We aim to achieve at least a 15% RoTE per annum over the long term.

Definition

The amount of cash paid to shareholders from the Group’s retained profits.

Aim

We aim to grow the regular dividend in line with business growth. Additionally, we look to return any capital to shareholders which is expected to be surplus to our requirements for a prolonged period.

Definition

This is calculated by dividing the earnings attributable to shareholders by the weighted average number of Ordinary Shares in issue.

Aim

We have not set a target. However, growing earnings per share is considered an indicator of a healthy business.

Definition

A measure of financial year underwriting profitability. A Combined operating ratio (“COR”) of less than 100% indicates profitable underwriting. In addition to net claims, expense and commission ratios measure the cost of doing business and the COR is the sum of these costs divided by net earned premium, excluding instalment and other operating income and investment return.

Aim

We aim to make an underwriting profit. For 2019, we expect to achieve a COR in the range of 93% to 95% normalised for weather.

Definition

A risk-based measure expressing the level of capital resources held as a percentage of the level of capital that is required under solvency II. 

Aim

We target a solvency capital ratio in the range of 140% to 180%.

Definition

Engagement is about being proud to work for Direct Line Group and helping us to succeed. It means that employees are not just happy or satisfied, but doing something to help us achieve our company goals.

Aim

To make the Group best for employees and best for our customers. We gauge employee engagement through our employee opinion survey and we aim to improve this year on year.

Definition

Net promoter score (“NPS”)  is an index that measures the willingness of customers to recommend products or services to others. It is used to gauge customers’ overall experience with a product or service, and customers’ loyalty to a brand.

Aim

The launch of our customer experience strategy, along with a new transactional feedback tool and improved propositions have increased our overall brand score.

Definition

The number of complaints we received during the year as a proportion of the average number of in-force policies.

Aim

This measure indicates the level of customer service we provide. We aim to improve this over time.