Direct Line has released details of its trading for the first quarter of 2018. Motor premiums continue to make up the core business, with £404m generated in 2018’s opening three months, compared to £392.7 in 2017. A new partnership with Volkswagen group is expected to bring in extra revenue in the future as well.
Paul Geddes, CEO of Direct Line commented;
“The freezing weather earlier this year hit many drivers, households and businesses hard, and I am proud of the way our people helped our customers during this difficult period, demonstrating the value of our insurance cover and service. We estimate the claims associated with the major freeze event will utilise the Group’s full annual weather budget.
“In Motor, the premium rises in the first half of 2017 have now largely reversed as customers benefitted from last year’s favourable claims environment. On partnerships, Royal Bank of Scotland Home returned to policy growth for the first time since 2012, benefitting from our investment in digital capabilities, and Volkswagen joined our portfolio of Motor partnerships.
“We are pleased we were able to grow while maintaining our discipline on loss ratios and we reiterate our full year targets.”
Revenue from Personal Lines dipped slightly in 2018, whilst turnover on Commercial Lines increased slightly, balancing things out. There was a drop from £99m to £47m on Home Partnerships however, caused by an exit from deals with Nationwide and Sainsbury’s.
Claims associated with the cold spell earlier in 2018 are expected to cost Direct Line around £50m in payouts.