-British insurer Direct Line posted a marginal rise in quarterly gross premiums on Tuesday, helped by growth in its commercial and roadside services, although tighter regulations and lower car sales weighed on its motor and travel units.
Speedy vaccination drives and an early lifting of lockdowns in Britain have led to a rebound in on-road traffic, but motor insurance premiums have taken a knock due to government caps on policy prices and a global chip shortage slowing down the production of new cars.
Direct Line – whose insurance brands include Churchill, Green Flag, Shotgun, Privilege and Darwin reiterated its medium-term targets but warned that pricing in the first few months of 2022 would be volatile as the economy resets after the pandemic.
Shares of the company were down 1.3% at 284.4 pence in early trading.
“We are also on track to implement the FCA’s (Financial Conduct Authority’s) new pricing practices regulations at the start of next year,” Chief Executive Officer Penny James said.
Britain’s financial regulator this year set out plans https://www.reuters.com/business/finance/uk-financial-watchdog-protect-home-motor-insurance-customers-loyalty-penalty-2021-05-28 to protect consumers from so-called loyalty penalties in motor and home insurance, with new policies around automatic renewals, pricing and data reporting to be implemented from 2022.
The London-listed company, which also offers home and business insurance, said overall gross written premiums rose 0.7% to 875 million pounds ($1.18 billion) for the three months to September from a year earlier.
($1 = 0.7414 pounds)
(Reporting by Sinchita Mitra and Pushkala Aripaka in Bengaluru; Editing by Ramakrishnan M.)