February 27, 2018 / 7:24 AM / a year ago

Insurer Direct Line to pay special dividend as profit rises

A photo illustration shows insurance renewal notices from Direct Line in London October 10, 2012. REUTERS/Suzanne Plunkett

(Reuters) - Direct Line Insurance Group raised its special dividend from last year as strong performance in its motor brands, rising premiums and favourable claims helped it post a 3.6 percent in 2017 operating profit.

Britain’s largest motor insurer, whose brands include Churchill, Green Flag and Privilege, said operating profit from continuing operations rose to 610.9 million pounds for the year ended Dec. 31, from 403.5 million pounds a year earlier.

Gross written premiums for ongoing operations rose 3.6 percent to 3.39 billion pounds in the period, it said.

Its motor division grew in-force polices by 3.8 percent in the year to 4.0 million and premiums rose 8.5 percent to 1.67 billion pounds.

Direct Line added it would pay a special dividend of 15 pence, up from the 10 pence it paid a year earlier.

The FTSE 100 company achieved a full-year combined operating ratio from continuing operations of 91.8 percent. A level below 100 percent indicates an underwriting profit.

The average premium paid for motor insurance in Britain jumped 9 percent in 2017 to the highest level since 2012, the Association of British Insurers said.

Premiums rose for most of last year, partly in response to new rules for personal injury claims.

Reporting by Noor Zainab Hussain and Rahul B in Bengaluru; Editing by Vyas Mohan and Gopakumar Warrier

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