Financial highlights
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Operating profit from ongoing operations of £526.5 million for 2013, up 14.2% (2012: £461.2 million); and total Group profit before tax of £423.9 million (2012: £249.1 million) |
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Combined operating ratio for ongoing operations of 96.1% for 2013, an improvement of 3.1 percentage points against 2012 (99.2%), and ahead of the target 98% for 2013 |
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Combined operating ratio for ongoing operations in 2013 included higher than expected contribution from prior-year reserve releases of 12.4 percentage points (£435.1 million) compared to 8.7 percentage points in 2012 (£322.0 million) |
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Return on tangible equity from ongoing operations of 16.0% for 2013 (2012: reported 11.5%; pro forma 2012: 13.4%) |
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5.0% increase in final dividend per share to 8.4 pence per share and second special interim dividend of 4.0 pence per share taking total dividends for 2013 to 20.6 pence per share |
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Strong capital position maintained with risk-based capital coverage of 148.7% post final and second special interim dividends, towards the upper end of the target range of 125% to 150% |
Strategic and operational highlights
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Investment in improved customer focused capabilities and propositions, launch of two telematics products and start of roll-out of smartphone and tablet optimised websites |
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Extended efficiency programme particularly in head office functions and announced additional cost savings, targeting a reduced total cost base of approximately £1,000 million in 2014 |
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Completed claims transformation for Motor and Home, extended ClaimCenter to Commercial Motor and Italy, and laid the foundations for DLG Legal Services Limited |
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Continued to develop Commercial and International, in particular full roll-out of eTrading and strong growth in Germany |
Paul Geddes, CEO of Direct Line Group, commented
"We have continued to make good progress on our strategic priorities, helping us to achieve our 2013 financial targets in highly competitive markets. We increased operating profit from ongoing operations by 14.2%, delivered a combined operating ratio of 96.1% and a return on tangible equity of 16.0%.
"In UK Motor, our improved pricing capability and claims management, as well as benefits arising from recent legal reforms, enabled us to reduce average prices for customers by 3% during 2013. In Home, recent UK weather events have emphasised the importance of insurance. I am proud of our people who have been working tirelessly around the clock to assist customers affected by the floods and storms, both on the phones and on the ground.
"Looking forward to 2014, we will continue to pursue our strategic priorities and self-help agenda to enable us to deliver benefits for our customers and shareholders."
