Línea Directa Aseguradora (LDA) Q2 2024 earnings summary

Executive summary

• Net income reached €25.4 million in H1 2024, reversing prior year losses and marking four consecutive quarters of positive earnings.

• Combined ratio improved to 95.5%, down 12.4 percentage points year-over-year, reflecting better claims management and efficiency.

• Gross written premiums rose 2.4% year-over-year to €503.9 million, with growth in Health and Home segments.

• Customer portfolio grew by 0.7% in the quarter, reaching 3.34 million policyholders, with growth in Health and Home.

• Dividend distributions resumed, with a €15 million interim dividend scheduled for August 2024.

Financial highlights

• Insurance revenue increased 2.7% year-over-year to €486.6 million, with all business lines contributing.

• Technical profit stood at €21.6 million, compared to a €36.5 million loss in H1 2023.

• Net investment result was €16.6 million, down 1.1% year-over-year due to Atos bond impairment, but up 26.2% excluding this effect.

• Loss ratio improved to 73.4% (down 12.3 p.p. year-over-year), and expense ratio was stable at 22.1%.

• Solvency II ratio at 191% pre-dividend and 184% post-dividend, indicating strong capital position.

Outlook and guidance

• Management expects continued growth in motor, home, and health portfolios, with focus on underwriting discipline and efficiency.

• Combined ratio in motor expected to remain in the 94%-95% range for 2025.

• Home combined ratio anticipated in the low 90s for the year, with current 88% seen as extraordinary due to absence of weather events.

• Dividend payout expected to remain high, with board decisions made quarterly based on profit evolution.

• Investment portfolio yields expected to improve, with reinvestments above 4% and no further extraordinary impairments anticipated.