Direct Line: dividend cut underscores motor insurer’s navigation error
Accidents happen. Insurer Direct Line revealed more than just a scrape on Wednesday. The UK motor specialist said a December cold snap added £90mn in extra claims from such mishaps as burst pipes.
Weather-related claims for the year would be £140mn, double the initial estimate. Remaining dividends for 2022, confirmed in November, would have to be scrapped. Shares plunged 28 per cent.
It is the latest bump in the road for UK non-life insurers, which have been struggling with the rising cost of motor claims. Direct Line already warned on profits in the summer, scuppering a plan for £50mn in buybacks.
This story originally appeared on: Financial Times - Author:Faqs of Insurances
