March 5, 2019 / 7:42 AM / a month ago

UPDATE 2-Insurer Direct Line issues Brexit 'green cards' to drivers

* Profit hurt by lower prices, extreme weather

* Cuts dividend ahead of Brexit

* Ports slowing down post Brexit could hurt operations

* Takes measures to help drivers visit EU after Brexit (Adds incoming CEO comments on Brexit, results, shares)

By Muvija M and Noor Zainab Hussain

March 5 (Reuters) - Direct Line is issuing its customers with a “green card” proof of insurance for use in the European Union in case Britain fails to strike a Brexit withdrawal deal by March 29 as it cut its dividend to be ready for extra costs.

The move by Britain’s largest motor insurer is part of its efforts to mitigate the effects of a British departure from the bloc without a deal and follows a call by Britain’s leading insurance trade body for drivers going to the EU to request a green card from their insurers one month before travel.

Direct Line, which reported a fall in 2018 earnings on Tuesday due to a fall in insurance prices and extreme weather in Britain, also warned that it would not be immune to a “disruptive Brexit”, despite the steps it has taken.

“If the ports move slowly, then there are some operational impacts. We mend nearly 200,000 cars a year ... If car parts aren’t coming into the UK from Europe then obviously that will more complicated,” incoming chief executive Penny James said.

Prime Minister Theresa May’s top lawyer will try to clinch a Brexit compromise with the EU this week in a last-ditch effort to win over rebellious British lawmakers.

Direct Line, whose brands include Churchill, Green Flag and Privilege, said it had cut its dividend to 29.3 pence per share from 35.4 pence a share to be ready for any additional costs.

The insurer’s operating profit fell 6.4 percent to 601.7 million pounds ($792 million) for the year ended Dec. 31, while gross written premiums was 5.3 percent lower at 3.21 billion pounds.

Although Direct Line’s shares dipped as much as 1.5 percent in early trade, they were up 0.8 percent by 0932 GMT. ($1 = 0.7602 pounds)

Reporting by Muvija M and Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr and Alexander Smith

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