Direct Line Group first quarter results to 31 March 2014

Interim Management Statement for Direct Line Insurance Group plc
Results for the first quarter to 31 March 2014

Direct Line Group’s Interim Management Statement relates to the first quarter ended 31 March 2014 and contains information to the date of publication.


  • Continued progress on delivery of the Group’s strategic development, including completing the roll-out of smartphone and tablet optimised websites for Motor, full launch of self-install telematics offering and launch of DLG Legal Services
  • Gross written premium (at constant currency) for ongoing operations1 5.1% lower for the first quarter of 2014 compared with the first quarter of 2013, reflecting competitive market conditions in UK personal lines, partially offset by growth in Commercial and in Germany
  • Motor gross written premium 10.2% lower compared to the first quarter of 2013. Motor prices reduced by 4% year-on-year, supported by positive claims trends and
    technical pricing initiatives
  • Home major weather event claims of approximately £60 million in the first quarter of 2014, lower than the previously announced estimate of £70 to £90 million; Commercial major weather event claims of approximately £20 million, as previously indicated
  • Investment income yield of 2.2% for the first quarter of 2014 (first quarter 2013: 2.0%), reflecting the positive effect of portfolio actions
  • Reiterate 2014 aim to achieve a combined operating ratio in the range of 95% to 97% for ongoing operations, assuming a normal level of weather claims


Paul Geddes, CEO of Direct Line Group, commented

“It was another busy quarter for us as we continued to progress strategic initiatives throughout the business. We have improved our digital capability, developed customer propositions and extended our product offering. We are also excited by the launch of a new self-install telematics product. It’s a robust, cheaper alternative to black box technology and it enables us to offer the benefits of telematics to a wider group of customers. We plan to continue investing in initiatives that improve how we interact with customers and boost our competitiveness in what remains a highly competitive market.”

For further information, please contact:

Neil Manser
Director of Corporate Strategy and Investor Relations
Tel: +44 (0) 1651 832183

Jennifer Thomas
Head of Financial Communications
Tel: +44 (0) 1651 831686


1. Ongoing operations include Direct Line Group’s ongoing segments: Motor, Home, Rescue and other personal lines, Commercial and International. It excludes the Run-off segment and restructuring and other one-off costs.

Forward-looking statements disclaimer

Certain information contained in this document, including any information as to the Group’s strategy, plans or future financial or operating performance, constitutes “forward-looking statements”. These forwardlooking statements may be identified by the use of forward-looking terminology, including the terms “aims”, “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “guidance”, “intends”, “may”, “outlook”, “plans”, “predicts”, “projects”, “seeks”, “should”, “targets” or “will” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or current expectations of the Directors concerning, among other things: the Group’s results of operations, financial condition, prospects, growth, strategies and the industry in which the Group operates. Examples of forward-looking statements include financial targets: return on tangible equity, the Group’s combined operating ratio, the combined operating ratio for the Group’s Commercial division, and cost savings. By their nature, all forward-looking statements involve risk and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Group’s control.

Forward-looking statements are not guarantees of future performance. The Group’s actual results of operations, financial condition and the development of the business sector in which the Group operates may differ materially from those suggested by the forward-looking statements contained in this document, for example directly or indirectly as a result of, but not limited to, UK domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities (including changes related to capital and solvency requirements or the Ogden discount rate), the impact of competition, currency changes, inflation and deflation, the timing impact and other uncertainties of future acquisitions, disposals, joint ventures or combinations within relevant industries, as well as the impact of tax and other legislation and other regulation in the jurisdictions in which the Group and its affiliates operate. In addition, even if the Group’s actual results of operations, financial condition and the development of the business sector in which the Group operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

The forward-looking statements contained in this document reflect knowledge and information available as of the date of preparation of this document. The Group and the Directors expressly disclaim any obligations or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable law or regulation. Nothing in this document should be construed as a profit forecast.

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