Direct Line Insurance Group Plc, the U.K.’s largest car insurer, said pricing for its motor business increased in the last two quarters because of higher claims.
Rates for car cover rose 8.4 percent in the three months through September, the company said Tuesday. Gross written premiums for motor jumped 6.8 percent to 389.9 million pounds ($601 million), helping lift total premiums 3.1 percent in the quarter. The shares climbed 1.1 percent to 395.7 pence by 9:10 a.m. in London trading.
“Strong performance in motor is helping us deliver overall growth in our gross written premium,” Chief Executive Officer Paul Geddes said in a statement. “We have also realized further efficiencies throughout the business, with costs reducing 7 percent compared to the first nine months of last year.”
The company said reserve releases, or money set aside in previous years to pay for insurance claims, were higher than expected in the first half of the year. It also reiterated that the combined operating ratio, a measure of profitability, for the full year will be in the 92 percent to 94 percent range.