Proactive Investors - Direct Line Insurance Group PLC (LON:DLGD) reported an increase in average renewal premiums as higher prices in its Motor division helped boost margins but warned of a further jump in claims in its motor business.
“We have experienced further adverse claims development in respect of late 2022 and early 2023 in Motor (including Commercial Motor) particularly in relation to damage. This is expected to put pressure on earnings in 2023 including from prior-year reserve releases,” the online insurer said in a statement.
Weather claims were modest during the first quarter and well within the 2023 full year assumption of £80mln, the company said.
Direct Line said it continued to expect high single digits inflation across Motor and Home, “albeit there continues to be a range of potential outcomes depending on future economic conditions.”
The company said total group adjusted gross written premium income climbed 8.4% to £771.7mln, with growth of 3.3% in Motor to £358.7mln and in in Home of 2.1% to £129.0mln.
“In Home, we observed significant price increases across the market,” Direct Line said.
In Commercial, the strong premium growth seen in 2022 continued in the first quarter with gross written premium growth of 27.6% driven by both direct own brands and NIG and other.