Direct Line Insurance Group PLC Trading Update re 2017 Preliminary Result (4705E)

TIDMDLG

RNS Number : 4705E

Direct Line Insurance Group PLC

09 February 2018

09 February 2018

Trading update: 2017 preliminary result ahead of market expectations

Direct Line Insurance Group plc (the "Group") today issues a trading statement (unaudited) in respect of the year ended 31 December 2017 ahead of the preliminary results announcement on 27 February 2018

Financial highlights

The Board anticipates that the Group will report:

-- Operating profit from Ongoing operations of circa GBP610m and profit before tax of circa GBP540m (2016: GBP403.5m and GBP353.0m)

-- Operating profit from Ongoing operations reflecting good results in Motor and Commercial, including from prior year reserve releases, lower than expected weather claims and a GBP57m impairment to IT intangible assets; Profit before tax also reflects a strong run-off result and a one-off charge related to the refinancing of debt in November 2017

-- An estimated Group solvency capital ratio of between circa185% and circa 190% of Solvency Capital Requirements(1) ("SCR"), before final dividend, reflecting lower capital requirements and better than expected profits. As at 31 December 2017 surplus above SCR is estimated to be circa GBP1.2bn

-- Gross written premium of circa GBP3.40bn (2016: GBP3.27bn) and approximately 350,000 more direct own brand(2) in-force policies at 31 December 2017

   --      A combined operating ratio for Ongoing operations of circa 92% (2016: 97.7%) 
   --      An underlying expense ratio and commission ratio lower than prior year 

The Group expects to operate around the middle of its Solvency II capital ratio risk appetite range of 140% to 180% of the Group's SCR. The Board will consider any return of capital and will announce this with the Group's preliminary results on 27 February 2018.

Paul Geddes, CEO of Direct Line Group, commented

"I'm proud of the Group's performance in 2017, as our customers continued to respond positively to the multiple initiatives we have made to improve the business, helping to grow our direct own brand premiums and in-force policies. The combination of our operating performance and favourable claims result has delivered financial results ahead of market expectations. Therefore we are publishing our headline results early and look forward to giving more details on the progress of the business in our preliminary results on 27 February 2018."

Inside information

This document contains inside information for the purposes of Article 7 of the European Union Regulation 596/2014.

For further information, please contact:

 
Andy Broadfield       Lisa Tremble 
Director of Investor  Head of External Affairs 
 Relations 
Tel: [phone]      Tel: [phone] 
 831022 
 

Notes:

   1.      Estimates based on the Group's Solvency II partial internal model. 

2. Direct own brands include Home and Motor under Direct Line, Churchill and Privilege brands, Rescue under the Green Flag brand and Commercial under the Direct Line for Business brand.

   3.      LEI: 213800FF2R23ALJQOP04 

This information is provided by RNS

The company news service from the London Stock Exchange

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February 09, 2018 07:02 ET (12:02 GMT)