Direct Line which employs 3,000 people in Yorkshire posts operating loss but reinstates dividend
The company, which employs 3,000 people in Yorkshire across its Direct Line, Churchill and Green Flag brands, revealed a £189.6m operating loss from ongoing operations compared to a loss of £6.4m in 2022.
The insurer has rejected two takeover proposals from Ageas in recent weeks.
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Hide AdAgeas has until March 27 to make a firm offer or walk away. Its latest proposal valued Direct Line at £3.17bn.
New Direct Line chief executive Adam Winslow, who started earlier this month, said the insurer was completing a ‘comprehensive strategic review’ during the first half of 2024 and would report back to shareholders in July, adding that the company's plans were not ‘predicated on any disposals’.
High inflation and supply chain and labour shortages have hit British motor insurers, pushing up the cost of claims.
But Direct Line rival Admiral posted a 23 per cent jump in profits last week, helped by price hikes and more customers, while smaller peer Sabre this week recorded a 69 per cent rise in profit.
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Hide AdWinslow said that Direct Line's motor business "has turned the corner and shows positive momentum into this year".
The company, which scrapped its dividend in early 2023, said it would pay a dividend of four pence per share.
It set a new target for a 13 per cent net insurance margin in 2026, with run-rate annualised cost savings of at least £100m pounds by the end of 2025.
Mr Winslow said: "While the picture has improved, we need to do more to drive performance and we have identified immediate actions we can take in 2024 to create value, including substantially reducing our cost base, driving claims excellence and optimising pricing capabilities whilst returning us back to higher quotability levels.
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Hide Ad"In addition to these near-term actions, we are currently running a comprehensive strategy review of the significant opportunities we see to deliver higher returns.”
KBW analysts described the results as "disappointing", but reiterated their "perform" rating on the stock.