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Direct Line Group (The Group) is pleased to announce that Adam Winslow is to be appointed as Chief Executive Officer of the Company, subject to regulatory approval. It is expected that he will take up the role as Direct Line Group Chief Executive Officer in Q1 2024 succeeding Jon Greenwood who has been Acting CEO since January 2023.
Direct Line Insurance Group plc (the "Group"), as stated today by the FCA, is undertaking a past business review relating to pricing in motor insurance and home insurance following the implementation of the FCA pricing practices regulation from 1 January 2022.
An error in our implementation of these rules has meant that our calculation of the equivalent new business price for some customers failed to comply with the regulation. As a result, those customers have paid a renewal price higher than they should have.
Redress will be paid to any affected policyholder. The current estimate of these payments is in the region of £30 million of which half was provided for within the Group's 2022 full year results.
This announcement is unconnected to the announcement made on 29 June 2023 in relation to the past business review of motor total loss claims.
idpickering wrote:Statement re past business review.Direct Line Insurance Group plc (the "Group"), as stated today by the FCA, is undertaking a past business review relating to pricing in motor insurance and home insurance following the implementation of the FCA pricing practices regulation from 1 January 2022.
An error in our implementation of these rules has meant that our calculation of the equivalent new business price for some customers failed to comply with the regulation. As a result, those customers have paid a renewal price higher than they should have.
Redress will be paid to any affected policyholder. The current estimate of these payments is in the region of £30 million of which half was provided for within the Group's 2022 full year results.
This announcement is unconnected to the announcement made on 29 June 2023 in relation to the past business review of motor total loss claims.
https://www.investegate.co.uk/announcem ... ew/7729279
Ian (No holding).
Dod101 wrote:
And they sure need that new CEO. The previous incumbent seems to have been rather less than competent.
Dod
monabri wrote:Of course, not good news, but to set in context, the additional cost represents about 5% of the previous annual dividend of 22p ( before it was pulled). The previous CEO made a mistake and paid for it with her job.
Direct Line Insurance Group plc, (the "Direct Line Group", the "Group", or the "Company") today announces that it has signed an agreement to sell its brokered commercial insurance business lines (the "Brokered Commercial Insurance Business") to RSA Insurance Limited ("RSA" or the "Purchaser"), a wholly-owned subsidiary of Intact Financial Corporation ("Intact"), for:
· Initial consideration of £520 million (the "Consideration");
· Potential further consideration of up to £30 million, contingent upon certain earn-out provisions (the "Earn-Out") relating to the financial performance of the Brokered Commercial Insurance Business (the "Transaction"); and
· In addition to receiving the Consideration and the potential Earn-Out, the Company estimates that over time it will release capital of up to approximately £270 million of which approximately £170 million will be released when the Transaction is approved by the Company's shareholders as a Class 1 transaction.
The Group will retain the back book in relation to business written and earned by the Brokered Commercial Insurance Business prior to 1 October 2023 (the "Risk Transfer Date"; and altogether the "Back Book Policies").
The sale of the Brokered Commercial Insurance Business facilitates the transfer of all of the Group's brokered commercial insurance business lines and associated partnerships to RSA through a combination of a reinsurance transaction and a renewal rights transfer. As a result, the economics in relation to the business at the Risk Transfer Date will move to RSA. The Back Book Policies will remain with the Company; however, if the Transaction is approved by the Company's shareholders, Direct Line Group and RSA intend to enter into discussions regarding the potential transfer of the Back Book Policies to RSA.
The Group will remain active in the direct small business commercial lines insurance space, capitalising on its strong position, through its brands "Direct Line" and "Churchill".
Financial summary
These results are reported under the IFRS 17 accounting standard and prior-year comparisons have been restated accordingly.
Gross written premium and associated fees increased by 9.8% to £1,615 million, as growth in Commercial and rate increases implemented to improve Motor written margins more than offset a 3.2% reduction in in-force policies across H1.
The Group's net insurance margin for the period was minus 6.4% and was adversely affected by the earn through of Motor policies written during 2022 and continued high claims inflation. The net insurance margin excluding Motor was 12.2% supported by resilient underlying results across Home, Commercial and Rescue.
Group operating loss for ongoing operations in the first half was £78 million, a reduction of £275 million from the first half of 2022 profit as a result of lower earnings in Motor.
Loss before tax of £76 million in H1 2023 was a £65 million increase year on year, with the reduction in operating profit partially offset by valuation movements on the Group's investment portfolio. In 2022 we saw a large negative fair value movement whereas the first half of 2023 has been more stable following the de-risking of some of the Group's investment portfolio.
CEO appointment
We announced last week that Adam Winslow is to be appointed as CEO of the Group, subject to regulatory approval. Adam has deep expertise in UK general insurance market and significant international experience spanning two decades. Adam is expected to join in the first quarter of 2024.
Capital and dividends
The Group's solvency capital coverage ratio of 147% was in line with year end as continued management actions and organic capital generation in Home, Commercial and Rescue were offset by Motor performance. The proposed sale of our brokered commercial insurance business ("NIG") is expected to increase the Group's pro-forma solvency capital ratio by approximately 45 percentage points.
The Board understands the importance of dividends to shareholders and will aim to restart dividends once two conditions are met. First, an improvement in the capital coverage at the upper end of our agreed range and secondly, a return to organic capital generation in Motor. Whilst the first condition would be met through the sale of NIG, for the second condition the Board will assess the performance of Motor over the second half of the year to ensure that actual performance is consistent with pricing assumptions.
Dod101 wrote:They have sure got themselves into a mess and so far have not had much success in extracting themselves. I imagine that the current CEO is doing no more than a holding operation pending the arrival of the new CEO.
If they are up 13% it must be relief that the results are not worse.
I have never held.
Ceo
AJC5001 wrote:Direct Line shares rocket higher following takeover rumours
208p at 13:15 up 27,58% https://uk.finance.yahoo.com/quote/DLG.L
Anyone tempted to sell???
Adrian
monabri wrote:https://www.investegate.co.uk/announcement/rns/direct-line-insurance-group--dlg/response-to-statement-by-ageas-sa-nv/8061640
3:12pm
"The Board considered the Proposal with its advisers and considered it to be uncertain, unattractive, and that it significantly undervalued Direct Line Group and its future prospects while also being highly opportunistic in nature. Accordingly, the Board unanimously rejected the Proposal on 29 January 2024."
"The Board is confident in Direct Line Group's standalone prospects given its strong strategic position, powerful brands, and robust capital position. Adam Winslow will take up the role as CEO on 1 March. He is tasked with refreshing the strategy and operational focus of the Group with the clear objective of returning to a sustainable level of operating profit over time.
Direct Line Group shareholders are advised to take no action in relation to the possible offer. A further announcement will be made as and when appropriate."
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