U.K.’s Direct Line 2014 Profit Misses Estimates on Less Premiums Written

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Direct Line Insurance Group plc reported 2014 pretax profit that missed analyst estimates as the British home and car insurer wrote less premiums.

Pretax profit for continuing operations rose 12 percent to 456.8 million pounds ($702.8 million) in the year to Dec. 31, the company said. That missed the 472.9 million-pound estimate of 12 analysts surveyed by Bloomberg. Gross written premiums fell 3.8 percent to 3.1 billion pounds.

“The U.K. motor and home markets remain highly competitive,” Chief Executive Officer Paul Geddes said in the statement. “Early 2015 has seen some additional, potentially seasonal, market pressure in motor and broad stability in the home market.”

The insurer said it met or exceeded all of its targets set at the time of an initial public offering in 2012, including a cost base of 1 billion pounds by 2014. Geddes sold the firm’s German and Italian businesses to Spain’s largest insurer MAPFRE SA for 550 million euros ($616 million) in September, with the proceeds expected to be returned to shareholders.

Direct Line increased its final dividend 4.8 percent to 8.8 pence a share and a second special interim dividend of 4 pence. Its combined operating ratio of 95 percent was 0.2 percentage points lower than 2013, aided by 397.6 million pounds of reserve releases.