Trading Update for Q1 2019*

Operational delivery on track

Penny James, CFO and CEO-designate of Direct Line Group, commented:

“The first quarter was characterised by significant operational progress in a tough trading environment. The motor market remained highly competitive, with market premiums failing to keep pace with claims inflation. Our response, as usual, was to focus on achieving our target loss ratios and continuing to improve pricing effectiveness. The home market has been slightly less challenging than motor but remained competitive. Elsewhere, Green Flag and Direct Line for Business continued their growth, increasing premiums by 15.8% and 8.1% respectively.


“As we said at the full year results, 2019 is a pivotal year for the delivery of our technology transformation programme and I’m delighted that we’ve had a successful start with the launch of our new PCW focused brand Darwin and the start of the roll-out of our new Motor and Travel systems. We are in the early stages of our plan to progressively roll out the new systems across our brands, products and channels so as to improve our competitiveness and customer experience.


“We remain on track to achieve our 2019 operating expenses target of less than £700m and we reiterate our target to achieve a 93% to 95% combined operating ratio in 2019 and over the medium term**."


Results summary

Q1 2019


Q1 2018




Gross written premium:








Home: own brands




Home: partnerships




Rescue and other personal lines












   Of which direct own brands***





31 Mar 2019


31 Dec 2018




In-force policies:




   Of which direct own brands***





Motor in-force policies were flat quarter on quarter as the Group’s pricing initiatives helped mitigate some of the pressure from market premium inflation not reflecting claims inflation. Lower Motor average premiums were primarily due to reduced risk mix arising from these pricing initiatives. Overall gross written premium reduced by 4.2% year-on-year. Claims inflation was at the upper end of the Group’s long-term expectations of 3% to 5%, primarily due to the continuation of higher Motor third-party property damage costs.


Home own brands premiums were broadly stable compared with prior year. Q1 weather was benign compared to the major weather in Q1 2018. Home partnerships premiums reduced by 5.7% year-on-year, primarily as a result of the continued run-off of certain partnership contracts.


Rescue and other personal lines premiums grew by 1.7% year-on-year, with the Group’s direct own brand Green Flag growing premiums by 15.8%. The new Travel IT system started to roll out in April supporting the Group’s partnerships and enabling the Group’s first fully automated Travel claim payment.


Commercial premiums grew by 1.2% year-on-year, reflecting 8.1% growth in the Group’s direct brand, Direct Line for Business, partially offset by a 1.3% reduction in NIG & Other.


The Group reiterates its target of achieving a combined operating ratio in the range of 93% to 95%, normalised for weather, in 2019 and over the medium term. The Group is also on track to achieve its target of operating expenses of less than £700 million in 2019.





Direct Line Group’s Trading Update relates to the three months ended 31 March 2019 and contains information to the date of publication.



Target to achieve a 93% to 95% combined operating ratio in 2019 and over the medium term normalised for weather.

Direct own brands include in-force policies for Home and Motor under the Direct Line, Churchill and Privilege brands, Rescue policies under the Green Flag brand and Commercial policies under the Direct Line for Business brand.


For further information, please contact:

Andy Broadfield

Lisa Tremble

Director of Investor Relations and Capital

Head of External Affairs

Tel: +44 (0)1651 831022

Tel: +44 (0)1651 834211

Corporate information

Direct Line Insurance Group plc is a public limited company registered in England & Wales, number 02280426. The address of the registered office is Churchill Court, Westmoreland Road, Bromley BR1 1DP.

The Annual Report & Accounts 2018 is available at:


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 forward-looking statements may be identified by the use of forward-looking terminology, including the terms “aims”, “ambition”, “anticipates”, “aspire”, “believes”, “continue”, “could”, “estimates”, “expects”, “guidance”, “intends”, “may”, “mission”, “outlook”, “over the medium term”, “plans”, “predicts”, “projects”, “propositions”, “seeks”, “should”, “strategy”, “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 and guidance which are contained in this document specifically with respect to the return on tangible equity, solvency capital ratio, the Group’s combined operating ratio, prior-year reserve releases, cost reduction, reductions in expense and commission ratios, investment income yield, net realised and unrealised gains and risk appetite range. 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, the outcome of discussions within the UK parliament and discussions between the UK and the European Union regarding the manner and terms, if any, on which the UK leaves the EU (usually called “Brexit”) and the terms in due course of any future trading relationship between the UK and the EU, market-related risks such as fluctuation 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 because 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.

Neither the content of Direct Line Group’s website nor the content of any other website accessible from hyperlinks on the Group’s website is incorporated into, or forms part of, this document.




LEI: 213800FF2R23ALJQOP04