Nov 7 - Britain’s largest motor insurer Direct Line Insurance Group posted on Tuesday a 4.2 percent rise in gross written premiums in the first nine months of 2017 helped by legal changes that raised the cost of motor insurance.
Gross written premiums rose to 2.6 billion pounds ($3.42 billion) in the nine months to September 30 from 2.5 billion a year earlier.
The average price of motor insurance in Britain jumped 10 percent in the third quarter, taking premiums to their highest level since 2012, the Association of British Insurers (ABI) said.
A government decision this year to cut the personal injury discount rate contributed to a rise in the size of payouts, denting insurers’ profits and lifting premiums to record highs.
However, Britain announced plans last month to change the rate for calculating personal injury payments, a move expected to reduce the size of the payments.
Direct Line said it experienced strong momentum in its motor business, with in-force policies for home and motor under the Direct Line, Churchill and Privilege brands, as well as rescue policies under the Green Flag brand, up 5.5 percent compared to the year ago period.
The FTSE-100 company said it had decided to rework some elements of capital expenditure already incurred by the company, which could lead to an impairment charge at year end.
The insurer said the impairment charge at year-end could be higher than the 39.3 million pounds incurred in 2016.
But Direct Line said even with the potential impairment, it expected its combined operating ratio, a measure of underwriting profitability for general insurers, to be in a range of 93 percent to 95 percent.
A ratio below 100 percent indicates an underwriting profit.
$1 = 0.7605 pounds Reporting by Noor Zainab Hussain and Radhika Rukmangadhan in Bengaluru; Editing by Jason Neely and Edmund Blair