Direct Line Insurance Group (DLG) H2 2024 earnings summary

Executive summary

• 2024 marked a significant year of progress, with a new leadership team executing a turnaround strategy focused on operational, financial, and strategic improvements.

• Operating profit increased by GBP 395 million year-over-year, with a 22-point improvement in motor margin.

• Strong solvency capital ratio of 200% before a 5.0p final dividend.

• A recommended cash and share offer from Aviva was announced, valuing the group at GBP 3.7 billion, with shareholder vote and regulatory approval expected by mid-2025.

• Significant progress made by new leadership, including cost actions and digital initiatives.

Financial highlights

• Premium growth reached 25% year-over-year, with motor premiums up 32% and non-motor up 11%.

• Ongoing operating profit was GBP 205 million, a GBP 395 million increase versus 2023.

• Net insurance margin improved to 3.6% from -8.7% year-over-year.

• Return on tangible equity improved by 25 points to 10%.

• Group profit after tax was GBP 163 million, GBP 60 million lower than last year due to prior year one-off gains.

Outlook and guidance

• Targeting at least GBP 100 million in gross run rate cost savings by end of 2025, with GBP 50 million already actioned.

• Non-motor premium CAGR targeted at 7–10% between 2023–2026.

• Aiming for 13% net insurance margin by 2026, supported by business transformation.

• Confident in further recovery in motor and continued strong growth in non-motor segments.