DLG optimistic about strategy as GWP jumps in Q1 2024

Direct Line Group (DLG) secured double digit gross written premium (GWP) growth in its motor, home and commercial businesses during the first quarter of 2024.

In a trading update today (8 May 2024), the insurer posted a GWP of £706.8m from its ongoing operations between January and March, up from £614.8m during the same period last year.

A total of £424.3m came from its motor arm, which was 18.3% higher than the £358.7m secured in Q1 2023.

The home business, meanwhile, grew 14.2% year-on-year from £129m to £147.3m, while DLG’s commercial direct own brands saw a revenue increase of 14.9% to £71.7m.

In-force policies, however, were 1.8% lower than what they stood at on 31 December 2023.

DLG said motor volumes were lower due to the continued repricing of the book, although home own brands in-force policies saw modest growth.

“We have seen a positive start to 2024 trading, with double digit GWP growth in our motor, home and commercial businesses and overall growth for ongoing operations of 15%,” DLG chief executive Adam Winslow said.

“Claims trends and motor margins continue to develop in line with our expectations.”

Strategy

The improved results came after DLG posted an operating loss from its ongoing operations of £189.5m in the 12 months to 31 December 2023.

Following this, the insurer conducted a review to identify opportunities across the value chain and said it saw a “significant opportunity to remove at least £100m of costs by the end of 2025 on a run-rate annualised basis”.

It felt there remained a “substantial” cost opportunity through further improvements in digital capability, reduced technology costs and removing complexity across the group.

To help implement its new strategy, the insurer has made several senior appointments this year, three of which were announced last week (2 May 2024).

It said that Craig Thornton will take up the role of managing director for home and growth, Martin Milliner will become managing director of claims and that Hugh Hessing would move into the position of chief operating officer.

“We have announced a number of significant hires over the last few weeks,” Winslow said.

“I am confident that with the new leadership team in place, we can deliver run-rate annualised cost savings of at least £100m by the end of 2025 and a net insurance margin, normalised for weather, of 13% in 2026.

“I look forward to sharing our refreshed strategy to deliver higher returns and the progress we have made against the immediate priorities to improve performance at our Capital Markets Day on 10 July 2024.”