Direct Line reports continued momentum in pricing during Q1

Insurance group Direct Line has reported continued momentum in pricing and claims initiatives during the first quarter of 2013.

Operating profit from ongoing operations in the period totalled £107.5m, a jump of 32.9% on the same period in 2012 when £80.9m was made.

The gross written premium for ongoing operations was 4.5% lower, which the group said reflected competitive market conditions in UK personal lines, although this was partially offset by growth in the International sector.

The company also reported a combined operating ration for ongoing operations of 98%, an improvement of 6.5 percentage points against the first quarter 2012 (104.5%), driven by continued prior year reserve releases and lower claims from weather events.

At the period end, the net asset value per share was 195.3p, while the tangible net asset value per share was 166p, compared to 189.1p and 161p, respectively, at the end of 2012.

Paul Geddes, Chief Executive of Direct Line Group, said: "The UK market remains competitive, particularly in motor. We made some deliberate choices in the quarter that had the effect of reducing our motor premiums. We believe these choices achieved an appropriate balance between managing risk and protecting value.

"Momentum across our five strategic pillars was sustained, and independent control of our cost base continues to present us with opportunities to improve efficiency.

"We continue to monitor and support the implementation of motor legal reforms, the impact of which we expect to be at least net neutral in the medium term. Reduced claims arising from these reforms should, over time, contribute to lower premiums for motorists, especially young drivers."

NR