Direct Line Group’s shares (LON) rose on Monday following its third-quarter 2024 update, showing robust premium growth in key areas despite challenges in the motor insurance market.

CEO Adam Winslow described Q3 as an "early stage of significant turnaround," with notable growth yet to be fully realised. In motor insurance, Direct Line faced tough competition but saw increased policy sales through price comparison sites, boosted by a fresh brand presence. However, higher claims for bodily injury kept pressure on profits in this segment. Overall, own-brand motor premiums grew by 2.9%, driven by higher average premiums.

Direct Line’s non-motor segments performed strongly, with home insurance premiums up by 21.6%—marking the fourth consecutive quarter of policy growth. Commercial direct and rescue services also showed gains, with premiums up 11.8% and 0.7%, respectively. The company aims for 7-10% annual growth in non-motor premiums through 2026.

Direct Line is targeting £100 million in cost savings by 2025, with half expected next year through improved procurement, technology upgrades, and streamlined operations. While challenges persist in motor insurance, the company maintains its 2026 goal of a 13% net insurance margin, adjusted for weather impacts.

Direct Line’s strategic focus and Q3 results reflect steady progress, building investor confidence for its growth targets.

Source: (Investing.com)