Direct Line H1 hit by end of partnerships

Direct Line Group reported gross written premium fell in the first half as a result of exiting home insurance partnerships with Nationwide Building Society and Sainsbury.

The slide in results came as DLG announced that chief executive Paul Geddes will be stepping down in a year’s time.

GWP overall fell to £1.61bn from £1.69bn a year ago, though direct own-brand GWP rose to £1.10bn from £1.06bn.

Operating profit fell to £303m from £360m, though the company said that, normalised for weather, operating profit was up slightly.

Group COR rose to 93.0% from 88.6%.

Pretax profit for the period fell to £294m from £341m.

“This is a good set of results,” Geddes said. “Growing our own brand polices and profits (normalised for weather) in a competitive, albeit to date, rational market – again showing the strength of our business model.”

He said the performance “gives us the confidence in our outlook, for us to reiterate our financial targets.”

DLG is targeting a COR of 93-95% adjusted for normal weather and assuming no further change to the Ogden discount rate.