Western Daily Press

Direct Line hit as pandemic keeps people off the roads

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INSURER Direct Line Group has blamed fewer numbers of people driving amid the pandemic for a hit to premiums in its first quarter.

The group, which owns the Direct Line and Churchill brands, saw gross written motor insurance premiums tumble 10.6% to £367.3 million in the first three months of the year.

It said premiums were affected by trends in the wider market, with fewer claims, a drop in new car sales and fewer new drivers taking to the roads.

But it said the 5% drop in overall average premiums in the first quarter was better than the performanc­e in the market.

Direct Line added that signs pointed to more stable premiums in April.

It comes as industry figures released separately yesterday show new car sales tumbled 13% last month on the pre-pandemic April average.

Around 141,000 new cars were

5 Percentage fall in overall average premiums in the first quarter

registered in the UK in April, the Society of Motor Manufactur­ers and Traders (SMMT) said – up on 2020 levels when the country was in full lockdown, but far lower than averages seen before the crisis.

Penny James, chief executive of Direct Line, said: “The first quarter saw similar motor market trends to those at the end of 2020, namely subdued claims frequency, low levels of new car sales and fewer new drivers entering the market.

“This led to further motor market premium deflation in the quarter.”

She added: “Looking forward, encouragin­g early indication­s suggest that motor market premiums stabilised during April.”

The group’s roadside assistance brands also suffered in the first quarter, with the division that includes Green Flag Rescue seeing a 19.5% plunge in premiums to £71.3 million.

Home insurance enjoyed a better quarter, with premiums up 1.8% at £140.3 million.

Group-wide premiums ended the quarter down some 4.7% at £752.3 million.

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