Direct Life Insurance has announced it has seen a 47 per cent rise in its quarterly pretax profits.
However, the UK’s largest car insurer – which also offers home, pet and travel cover – also said its core motor insurance market is set to remain competitive throughout the rest of the year.
Chief executive of the company Paul Geddes said in a post-earnings call with Reuters reporters that gross written premiums in motor have been damaged by Direct Line’s strategy to maintain prices and reduce its exposure to riskier drivers.
“With gender-neutral pricing being implemented at the start of the year, we took a decision to temporarily step back from that young-driver marketplace,” he explained.
The EU legislation stated that all car insurance firms were no longer able to determine premiums based on the gender of the young motorists, despite the fact males are statistically more likely to be involved in an accident than females.
Direct Line – which emerged from the Royal Bank of Scotland in October 2012 – revealed it is continuing to target underwriting profitability at the expense of volume.