£217m insurer pain

A PUNISHING change to compensation rules has cost Direct line Group £217m and forced the insurer to abandon a special dividend.

The Government’s alteration to the Personal Injury Discount Rate means victims of serious accidents are entitled to higher payouts. But industry chiefs have warned it could drive up young drivers’ premiums by as much as £1,000 a year and wipe millions of pounds off future profits.

Direct line revealing it had set aside £217m to cover extra costs. Profits fell 30pc to £353m in 2016. shares fell 2.5pc, or 8.6p, to 339.8p.