Direct Line Group Interim Management Statement for the first nine months of 2015

Interim Management Statement for the first nine months of 2015

Direct Line Group’s Interim Management Statement relates to the nine months ended 30 September 2015 and contains information to the date of publication.


  • Gross written premium for ongoing operations1 up 1.3% for the first nine months with 4.1% growth in Motor partially offset by Home, and for the third quarter up 3.1% with 6.8% growth in Motor
  • Motor own brands in-force policies increased by 0.8% in the first nine months of 2015, while Home own brands in-force policies were stable
  • Continued investment in customer propositions, with the inclusion of guaranteed hire car in all Direct Line comprehensive motor policies. This builds on the seven day car repair service and the removal of amendment fees for all Direct Line branded products
  • Total costs2 for ongoing operations reduced by 7.0%, while investment income yield increased to 2.4%, in comparison to the first nine months of 2014
  • Reiterate expectation to achieve a 2015 combined operating ratio3in the range of 92% to 94% for ongoing operations after normalising for claims from major weather events. Underlying trends remain broadly in line with prior expectations of a combined operating ratio in the range of 94% to 96%


Paul Geddes, CEO of Direct Line Group, commented

“Our strategy is progressing well and we continue to see the benefits of our programmes to improve customer experience and differentiate our brands, with a strong performance in Motor helping us deliver overall growth in our gross written premium. At the same time, we have also realised further efficiencies throughout the business, with costs reducing 7.0% compared to the first nine months of last year.

“We will continue to build on these developments through investment in the future capability and technology of our business, with the aim of making insurance much easier and better value for our customers.”

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 comprise Direct Line Group’s ongoing divisions: Motor, Home, Rescue and other personal lines and Commercial. It excludes discontinued operations, the Run-off segment and restructuring and other one-off costs.
  2. Total costs include operating expenses and claims handling expenses.
  3. Combined operating ratio is the sum of the loss, commission and expense ratios. The ratio is a measure of the amount of claims costs, commission and expenses compared to net earned premium generated.


Business update

During the first nine months of 2015, the Group continued to make progress delivering its 2015 strategic objectives and building capability for the future.

Work on differentiating the Group’s brands has continued with, in particular, enhancements for the Direct Line brand’s customers. During the third quarter of 2015, guaranteed hire car was included as standard in Direct Line comprehensive motor policies. The enhancement builds on a seven day car repair service and the removal of amendment fees from all Direct Line branded products. These improved propositions, as well as Churchill’s refreshed branding, have contributed to an increase in the Group’s overall brand Net Promoter Score, along with an increase in Motor and a stabilisation of Home own brands in-force policies.

The Group’s investment in digital capability continued with the roll out of smartphone and tablet optimised websites, including new quote and buy journeys, for its Home and Green Flag insurance products. These have built on last year’s successful implementation of a new quote and buy journey for Motor.

The Group continued to improve its efficiency with a reduction in total costs of 7.0% compared to the first nine months of 2014. This has been achieved while continuing to invest in future capability. Work associated with the implementation of the next generation of customer systems continued and the initial phase for deployment to Motor products is expected in 2016.

The Group continues to build on its current strong market positions by identifying and investing in market developments that it believes can contribute to future growth. In particular, Motor has continued to grow its telematics-based insurance, with a 76% increase during 2015 to 67,000 in-force policies.

Commercial has further enhanced its product coverage with the launch of Professional Indemnity cover for Direct Line for Business’s customers, and Cyber cover for NIG’s customers distributed through the broker channel. These products are fully reinsured.

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