Gross written premiums totalled 2.5 billion pounds, slightly above expectations of 2.48 billion pounds, according to a company-supplied consensus forecast.
Direct Line, whose brands include Churchill, Green Flag and Privilege, said it expected its combined operating ratio, a measure of underwriting profitability for general insurers, to be towards the lower end of its 93-95 percent target range.
Strong competition in British motor insurance has put pressure on prices in the past few years, partly because of the growth of price-comparison websites. But in the past few quarters prices have been increasing, partly as a result of a rise in premium taxes.
A survey by roadside assistance firm AA Plc (AAAA.L) showed a 3.7 percent rise in motor insurance prices in the third quarter from the previous quarter, and a 16.3 percent rise over a year earlier.
“Any uptick in general inflation should be supportive for motor insurance price increases,” said Gordon Aitken at RBC in a client note, adding that if inflation rises, Direct Line was well-positioned. Aitken reiterated his “outperform” rating on the stock.
(Reporting by Carolyn Cohn; Editing by Rachel Armstrong)
Article care of Reuters http://uk.reuters.com/article/uk-direct-line-results-idUKKBN1330R0
