Business

Direct Line profits slip 4.5% in FY20

However, Covid-19 caused a ‘modest net benefit’ to the group’s yearly results

Direct Line Group has reported its operating profits for the year ended 31 December 2020 fell to £522.1m, a year-on-year decline of 4.5%.

In its preliminary results for the year, the firm attributed the fall in profits to increased major weather costs, which rose from £6m in 2019 to £43m in 2020.

While the impact of Covid-19 was supposedly a “modest net benefit to the result,” Direct Line experienced a £58.3m drop in its profit before tax to £451.4m.

According to the group, the before tax fall was a direct result of £39.4m of restructuring and one-off costs related to cost-saving initiatives.

Penny James, CEO at the company, said that despite the “many challenges” brought about by Covid-19, Direct Line “traded well and prioritised support” for its customers, people, and local communities.

She added: “Turning to the year ahead, we feel confident that we can build on the momentum we’ve created and become a tech and data driven insurance company of the future with our customers at its heart.”

The group’s own brands in-force policies, including home, commercial, and Green Flag Rescue, rose 2.2%.

Moreover, the proposed final ordinary dividend has increased 2.1% year-on-year, with all Direct Line employees awarded £350 worth of company shares.

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