Nov. 9 (Reuters) – UK insurer Direct Line (DLGD.L) posted a marginal increase in quarterly gross premiums on Tuesday, aided by growth in its commercial and road services, albeit tighter regulations and sales of weaker cars weighed on its motor and travel units.
Rapid vaccination campaigns and a rapid lifting of lockdowns in Britain have resulted in a rebound in road traffic, but car insurance premiums have taken a hit amid government caps on policy prices and a global shortage of chips slowing the production of new cars.
Direct Line – whose insurance brands include Churchill, Green Flag, Shotgun, Privilege and Darwin reiterated their medium-term goals but warned that prices in the first months of 2022 would be volatile as the economy resets after the pandemic.
Shares of the company fell 1.3% to 284.4 pence at the start of trading.
“We are also on track to implement the new FCA (Financial Conduct Authority) pricing practice regulations early next year,” said Managing Director Penny James.
The UK financial regulator this year laid out plans to protect consumers from so-called loyalty penalties in auto and home insurance, with new policies on automatic renewals, pricing and data reporting to be implemented at from 2022.
The London-listed company, which also offers home and business insurance, said overall gross written premiums rose 0.7% to 875 million pounds ($ 1.18 billion) for the three months ending in September compared to the previous year.
($ 1 = 0.7414 pounds)
Reporting by Sinchita Mitra and Pushkala Aripaka in Bengaluru; Edited by Ramakrishnan M.
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