Preliminary results for the year ended 31 December 2015
Financial highlights
- Gross written premium from ongoing operations1 up 1.7% to £3,152.4 million, with 4.8% growth in Motor for 2015 and 7.1% in the fourth quarter. Motor and Home own brands in-force policies up 1.4%
- Operating profit from ongoing operations increased to £520.7 million for 2015 (2014: £506.0 million). Combined operating ratio2 from ongoing operations of 94.0% for 2015, an improvement of 1.0 percentage point
- Return on tangible equity3 of 18.5% for 2015 (2014: 16.8%). Profit before tax for continuing operations1 increased to £507.5 million (2014: £456.8 million)
- Results benefited from disciplined underwriting, prior-year reserve releases from ongoing operations of £378.9 million (2014: £397.6 million) which were higher than expected, together with lower costs, partially offset by higher claims from major weather events and lower volumes
- 4.5% increase in final dividend per share to 9.2 pence per share and additional special dividend of 8.8 pence per share. Total dividends for 2015, including special interim dividend of 27.5 pence per share following sale of International division, of 50.1 pence per share (2014: 27.2 pence per share)
Strategic and operational highlights
- Investment in brand differentiation through further enhancements, a succession of initiatives to Direct Line proposition and improved trading capability across Churchill and Privilege, particularly on price comparison websites
- Improved customer retention rates for motor and home products, and Net Promoter Score for Direct Line brand
- Reduced total costs4 for ongoing operations by 4.6% in 2015 while investing in technical pricing, claims management and self-service initiatives
- Doubled Motor telematics insurance in-force policies; and growth in Commercial in-force policies through eTrade and direct channels
- Invested in digital capability, including the roll out of new quote and buy journeys for Home and Green Flag insurance products, and development of next generation of customer systems
Paul Geddes, CEO of Direct Line Group, commented
“Our customers are benefiting from the many improvements we’ve been making, including new propositions and enhanced customer service. This has resulted in more customers coming to our brands and renewing with us.
“Growth in own brands policies has contributed to overall premium growth and, alongside lower costs, has again allowed us to deliver an improved financial performance for the year. Operating profits are up and return on tangible equity is well ahead of our target, despite the bad weather at the end of the year. We’ve also continued to grow regular dividends and announced another special dividend.
“To meet our ambition of being at the forefront of the fast-moving, ever-changing insurance landscape, we are focused on building on this momentum by investing in our people, brands and systems.”
Source: Direct Line Group