The insurer will also be rewarding its staff with shares as a thank you for their resilience
Direct Line Group (DLG) will be recommencing its share buyback scheme in line with previous guidance it gave at its half year results last year.
During a live video stream with journalists this morning following the publication of the insurer’s preliminary 2020 financial results, Neil Mansar, deputy chief financial officer, said: “I am proud of our long-term track record of returning capital to shareholders and pleased that we can continue that today with a buyback and increase in the regular dividend.
“We see this as a continued, vital element of our investment case. The buyback will be for £100m, of which £50m [will be] bought back in the first half 2021.”
After adjustments for the acquisition of the Bromley site and tier two debt in 2022, this leaves the firm with a capital coverage of 166%.
Mansar said this move will begin to move the group back to its targeted risk appetite range.
This follows Direct Line Group suspending its dividend last year in April.
Speaking about the resilience of her staff during the Covid-19 pandemic, Penny James, DLG’s chief executive, said: “As a thank you, we are rewarding everyone with £350 worth of shares and for those that do not usually received bonuses, this year we are giving them a £400 bonus in their April salary.”
Hiscox also revealed it was reinstating its dividends last week.
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