Direct Line scraps dividend as cost of claims surges
Direct Line has suspended its dividend after a combination of severe cold in December and rising inflation pushed up the cost of claims last quarter.
As a result of these factors and a reduction in the value of its commercial property holdings, the motor insurer said it no longer expected to declare a final dividend for 2022.
“The board recognises the importance of the dividend to our shareholders, and continues to take actions to restore balance sheet resilience and dividend capacity as a priority, consistent with our record of delivering returns for shareholders,” said chief executive Penny James.
Direct Line said 3,000 customers experienced burst pipes and water tanks as well as other damage from the sub-zero temperatures in December, creating an expected £90mn in claims across the home and commercial business.
This story originally appeared on: Financial Times - Author:Ian Smith
