£50m direct hit for insurer

Direct Line Insurance has revealed a £50 million hit from the Beast from the East and warned that almost its entire annual weather claims budget had been used in the first three months of the year.

The group saw a surge in claims as the freezing temperatures in February and March took their toll on households and businesses across the UK.

Claims from the big freeze are set to reach around £50 million on a post-tax basis, using up most of the £55m it sets aside a year for major weather events across 12 months.

Direct Line Group chief executive Paul Geddes said: “The freezing weather earlier this year hit many drivers, households and businesses hard, and I am proud of the way our people helped our customers during this difficult period, demonstrating the value of our insurance cover and service.

“We estimate the claims associated with the major freeze event will utilise the group’s full annual weather budget.”

He stuck by the group’s full-year targets despite weather claims. First-quarter figures showed gross written premiums for motor insurance lifted 2.9% to £404 million in the first quarter.

Direct Line is counting the cost of bad weather in February and March.