skip to main content

Annual report

A year of strong progress

2017 is the fifth successive year in which we have delivered a strong financial performance. We have seen significant growth in our direct own brand policies as more customers respond positively to the many improvements we have made to the business.

  • Expand all
  • Collapse all
Group highlights

Our strong performance reflects our success in satisfying customers and a focus on profitability and returns. We have delivered:

  • Strong growth in direct own brands1 premiums and in-force policies up 9.3% and 5.3% respectively, driven again by continued Direct Line momentum in Motor
  • Operating profit from Ongoing operations of £610.9 million (2016: £403.5 million), primarily due to the non-repeat of the Ogden discount rate change which was reflected in 2016's results. Profit before tax of £539.0 million (2016: £353.0 million)
  • Reported expense ratio in line with 2016. Excluding non-cash intangible assets impairment of £56.9 million (2016: £39.3 million), underlying expense ratio improved 0.5 percentage points to 23.5%
  • Combined operating ratio2 from Ongoing operations of 91.8% (2016: 97.7%) reflecting strong Motor and Commercial performance, including from prior-year reserve releases. Adjusted for normal weather, combined operating ratio towards the lower end of the target range 93% to 95%
  • Final regular dividend up by 40.2% to 13.6 pence bringing the total ordinary dividends to 20.4 pence (2016: 14.6 pence) and a special dividend of 15.0 pence (2016: 10.0 pence). Total dividends for 2017 of 35.4 pence per share (2016: 24.6 pence)

1 See glossary on pages 174 to 176 of our Annual report PDF for definitions and Appendix A Alternative performance measures (“APM”) from page 177 for reconciliation to financial statement line items.
2 A reduction in the ratio represents an improvement as a proportion of net earned premium, while an increase in the ratio represents a deterioration. See glossary on page 174 of our Annual report PDF for definitions.

Creating shareholder value
  • Five years after the Group’s initial public offering we have consistently achieved profitable growth and returned £2.4 billion to shareholders, including the ordinary and special dividends for 2017 of £486 million
  • Our successful three pillar strategy – Great retailer; Smart & efficient manufacturer; Lead & disrupt - has enabled us to launch new medium-term financial targets:
    • Combined operating ratio of 93%-95%
    • Return on tangible equity at least 15%
    • Grow our dividend in line with business growth
    • Maintain solvency capital around the middle of the 140% to 180% Solvency II target range
  • Over the past five years, shareholders have received a Total Shareholder Return of 152% compared to the FTSE 350 (excluding investment trusts) of 62%
A diverse proposition

We have multiple brands, products and distribution channels. These enable our customers to choose the right cover to protect their cars, homes, holidays, businesses and pets:

  • MOTOR: £1,670.4m gross written premium: we are Britain’s leading personal motor insurer measured by in-force policies3 mainly represented through our well-known brands Direct Line, Churchill and Privilege, and also through our partners. We insure around one in six insured cars on the road in the UK, representing 4.0 million in-force policies
  • HOME: £799.1m gross written premium: we are one of Britain’s leading personal home insurers measured by in-force policies3. We reach our customers by selling home insurance products through our brands Direct Line, Churchill and Privilege, and our partners RBS, NatWest and Prudential
  • RESCUE & OTHER PERSONAL LINES: £421.1m Gross written premium: we are one of the leading providers of rescue and other personal lines insurance in the UK4,5 with 7.7 million in-force policies. This includes providing roadside assistance and recovery for customers through Green Flag, the UK’s third largest roadside recovery provider4. We also offer customers protection for their holidays and pets and are the second largest travel and the fourth largest pet insurer respectively5
  • COMMERCIAL: £501.5m gross written premium: we protect commercial businesses through our brands, NIG, Direct Line for Business and Churchill, and through our partners RBS and NatWest. NIG sells its products exclusively through brokers operating across the UK. Direct Line for Business provides business, van and landlord insurance products direct to customers. Churchill sells business, landlord and van products direct to customers and through price comparison websites

3 Includes Direct Line, Churchill, Privilege and partner brands: RBS, NatWest, Prudential and Sainsbury’s © GfK Financial Research Survey six months ending January 2018, 14,063 adults interviewed for motor insurance and 12,214 for home insurance.
4 Mintel Vehicle Recovery – UK, September 2017.
5 Mintel Pet Insurance – UK, August 2017 and Mintel Travel Insurance – UK, February 2017.

Creating value for our stakeholders
  • Our multi-brand, multi-product and multi-distribution channel business offers different propositions to distinct customers. We believe this approach should enable us to provide good value for customers and sustainable returns for our shareholders
  • Value is created through our core business strengths – customer focus, talented people, brand power, data and technology and capital and financial strength
  • We strive to make sure our business is well-governed and controlled. We manage our finances carefully and balance this with targeting sustainable returns for our shareholders
  • We are focused on creating sustainable value for:
    • Customers: we give customers products that best suit their needs and exceptional service throughout their relationship with us. We have a Net Promoter Score of 144.0 points6
    • Employees: we invest in initiatives to develop our people, creating a high-performance culture based on diversity, continuous training and customer focus. We have employee engagement of 78%7
    • Communities: we are committed to supporting our employees’ charitable work, reducing our environmental impact, and inspiring a generation of safer young drivers. 33% of our staff fundraised or volunteered on Company time
    • Shareholders: we aim to give our shareholders value by generating sustainable business profits, part of which we distribute as dividends. We are proposing to pay a total dividend of 35.4p per share for the 2017 financial year

6 See page 21 of our Annual report PDF for explanation on NPS.
7 See page 28 of our Annual report PDF for details on employee engagement.


Click here to read the full Q&A with Paul Geddes

Protecting Britain's young drivers
  • As Britain’s leading car insurer, our Corporate Social Responsibility strategy is focussed on road safety. In particular, we are using our insight and expertise to make a measurable difference to young drivers in the UK
  • We believe we can use our expertise and experience to help reduce the number of deaths and life-changing injuries on Britain’s roads
  • We have set an ambitious long-term aim of helping to cut deaths of young drivers in their first 1,000 miles of driving to zero. We will, of course, need to work with many other stakeholders to achieve this goal

Annual Report & Accounts 2017

Annual Report 2017


Strategic report


Directors' remuneration report



Read Full Q&A

Quick Links

Check out our
iPad app
Click here
Stay informed
Sign up to the email alerts and receive updates on upcoming news.