'Resilient' performance from Direct Line despite fall in profits

Operating profit of £264.9 million was £9.4 million lower than the first half of 2019 mainly due to increased weather costs of £30.4 million.

The company said there was continued improvement in current-year profitability, offset by reduced prior year reserve releases.

Profit before tax of £236.4 million was £24.9 million lower than same period in 2019 following the reduction in operating profit alongside £15 million of restructuring and one-off costs as the group invests £60 million in cost saving initiatives.

Penny James, the CEO of Direct Line Group, said: "I am very proud of what we have achieved so far this year.

"We have launched initiatives with an estimated investment of £80 to £90 million to support our customers, people and local communities through the uncertainty caused by Covid-19.

"When the Covid-19 pandemic hit, we prioritised phone lines for existing customers, created new online journeys and offered additional value through various initiatives including mileage refunds and payment deferrals.

"We did not access Government support and chose to protect all roles and salaries at the group through to the autumn and our Community Fund is providing £3.5million to help people in communities across the UK.

"Despite the significant disruption caused by Covid-19 we have continued the trading momentum we saw at the end of 2019, growing direct own brands by 2% and improving the quality of our earnings with an improved current-year loss ratio.

"We have also demonstrated financial resilience in the face of Covid-19 disruption, which has enabled us to declare our 2020 interim dividend as well as a catch-up of our cancelled 2019 final dividend.

"We have seen just how quickly people change their behaviour and I am proud that we've been able to adapt rapidly whilst still making good progress on our strategic transformation. We still have a huge amount to do, both operationally and technically, but even in the midst of a pandemic we have made excellent progress on our technology transformation. Delivering so much change whilst over 9,000 of our people worked from home was an exceptional achievement."

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