Direct Line Insurance Group Plc said it expected up to 140 million pounds of claims from customers affected by the three storms that hit Britain last month, lesser than analysts' estimates.
Britain's insurers are expected to pay 1.3 billion pounds to cover damage caused by floods in December and early January, the Association of British Insurers said on Monday.
Direct Line is seen as one of the insurers most affected by the storms, which have led some analysts to downgrade earnings forecasts for general insurers.
Direct Line, Britain's largest motor insurer, estimated total claims of between 110 million pounds and 140 million pounds, after towns, cities and countryside were deluged in the worst floods in Britain since 2007.
Canaccord Genuity analysts said the claims estimate was a small positive as it was lower than the 165 million pounds they expected.
Home claims from the storms - Desmond, Eva and Frank - are likely to be 80 million pounds to 100 million pounds, compared with a normal annual level of claims from major weather events of about 80 million pounds, the company said.
Claims in its commercial unit are expected to be between 30 million pounds and 40 million pounds, Direct Line said.
Commercial claims from weather-related damage and large claims for 2015 would be about 15-25 million pounds more than expected in an average year, it said.
The company does not expect to make a recovery under its property catastrophe reinsurance contract, which says the insurer has to make payments per event of up to 150 million pounds. This means Direct Line will have to pay the claims itself as the estimate is below the cap.
The insurer reiterated its expectation of a combined operating ratio - a comparison of claims to premiums - of 92 percent to 94 percent in 2015 after normalising for claims from major weather events.
Direct Line had a combined operating ratio from ongoing operations of 95 percent in 2014.
Aviva and RSA, among the insurers facing payouts, are yet to provide an estimate of insured losses.
Shares in the FTSE 100 company were up 1.6 percent at 367.8 pence at 0950 GMT, while the FTSE 350 non-life insurance index was up 0.9 percent.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier)