Direct Line issues profit warning as inflation drives up cost of claims

Direct Line shares were the biggest faller on the FTSE 250 on Monday. Photograph: M4OS Photos/Alamy

Direct Line has issued a profit warning, saying that the soaring prices of used cars, parts and longer repair times have pushed up the cost of claims.

Shares in the insurer plunged 13% on Monday – making Direct Line the biggest faller on the FTSE 250 – to its lowest level since 2013 as the company said that overall claim costs are rising at about 10%.