Direct Line's profit rises on fewer home insurance claimsWednesday 26 February 2014 13.20
Britain's Direct Line Insurance Group reported a rise in full-year profit as it recorded fewer claims in its home insurance unit and tapped into reserve releases to counter a slide in car insurance premiums.
The insurer, spun out of Royal Bank of Scotland in the wake of the financial crisis, said it aimed to achieve a combined operating ratio (COR) of between 95-97% in 2014.
A COR below 100% means an insurer earns more in premiums than it pays out in claims.
The company said its pre-tax profit increased about 70% to £312.8m in the year ended December 31.
Fourth-quarter pre-tax profit rose 51% to £90.9m, despite an unusually strong spate of storms that inundated large parts of Britain during the three month period.
Net earned premiums fell 5% to £3.52 billion.
Direct Line, whose brands include Churchill, Privilege and the Green Flag roadside recovery service, said it would pay a final dividend of 8.4 pence per share, 5% higher than last year.