Direct Line has achieved three consecutive quarters of positive profit since the second half of last year. Led by CEO Patricia Ayuela, the insurance company reported net profits of 10.1 million euros in March, a significant improvement from the losses of 5.3 million euros in the same period last year. Following this news, the company’s shares rose by more than 2% and have seen a consolidated advance of 13% in the year, aiming to recover from previous years’ losses.
The company attributes this positive performance to improved margins resulting from better client selection and insurance rates, as well as effective claims management. Facing the high costs of repairs due to inflation in the sector, Direct Line, like other insurance companies, had to let go of some policyholders and increase contributions. Despite this, the company saw a 3.4% increase in income while reducing the number of policyholders by 4.5% to 3.3 million policies. Premiums issued reached 251.4 million euros, a 3% increase, with all business lines (Motor, Home, Health) showing positive contributions.
CEO Ayuela expressed optimism about the results, noting a progressive improvement in margins and profits that signal a positive change in the company’s cycle. The company’s combined ratio, a key indicator of profitability, fell by 9.5 points to 97.3%, below 100% which indicates profitability. This improvement is largely attributed to the Auto branch, where the combined ratio decreased by more than 10 points to 96.5%. The solvency margin also increased to 183%.
In summary, Direct Line has returned to profitability as a group, with positive results across its business lines. The company’s strategic focus on client selection, rates, and claims management has proven successful in improving margins and profits. With a strong start in 2024, Direct Line is poised for continued growth and success in the insurance industry.