Direct Line (DLG) Share Price Jumped 8.5% on Q3 Trading Update

The Direct Line Insurance Group PLC (LON: DLG) share price jumped 8.54% after releasing its Q3 trading update. The company reported that its ongoing operations had seen a 4.9% increase in the total number of in-force policies during the third quarter. 

The growth in in-force policies includes adding approximately 725,000 Motability customers, reflecting the insurer’s commitment to expanding its customer base and providing valuable insurance services.

We are delighted to report an impressive year-to-date growth of 27.6% in gross written premiums and associated fees for our ongoing operations. The remarkable performance can be attributed to a combination of factors, including premium rate increases in the Motor insurance segment and the commencement of the Motability partnership. 

It is worth noting that Direct Line’s Motor direct own brands have experienced substantial growth, with average premiums in the third quarter surging by an impressive 37% compared to the same period in 2022.

The company’s other business lines have maintained steady performance, aligning with previous trends. Premium growth in the Home and Commercial Direct segments further underscores the firm’s diversified portfolio and its ability to serve a wide range of insurance needs.

Regarding its outlook for 2023, Direct Line has kept its assumptions for claims inflation in the Motor and Home insurance market unchanged, remaining at high single digits. Additionally, claims arising from various weather events, including recent storms, are estimated to be within the Group's annual assumptions. 

In a significant strategic move, the company obtained shareholder approval to sell the Group's brokered commercial business to RSA Insurance Limited. The transaction resulted in an initial consideration of £520 million, received on October 26, 2023.

Jon Greenwood, Acting CEO of Direct Line Group, commented: “Throughout Q3, we have continued to address our three key priorities: to restore our capital resilience, improve our performance in Motor and maintain our performance in our other businesses. The sale of our brokered commercial business to RSA Insurance Limited strengthens our business strategically and financially… At the same time, we have continued to progress our strategic agenda, launching Direct Line Essentials in Motor, which improves our competitiveness in the direct market, and we have welcomed around 725,000 Motability customers.”

Direct Line (DLG) share price. 

The Direct Line (DLG) share price jumped 8.54% to trade at 171.93p from Monday’s closing price of 158.40p.