Insurer Direct Line says the total claims bill for damage from February's storms could reach £40m. It said it had helped more than 10,000 customers after Dudley, Eunice and Franklin battered the UK last month.
An early estimate projects claims reaching between £30m and £40m for storm damage, the company said. More than one million homes were left without power in the immediate aftermath, while roads and railways saw travel chaos amid widespread damage.
The details of the storm impact came as Direct Line reported a 1.2 per cent drop in pre-tax profits to £446 million for 2021 as it said it faced a "challenging market, impacted by the pandemic". Operating profits lifted 11.4% to £581.8 million last year.
The insurer added it was "deeply saddened and shocked by the conflict in Ukraine", but confirmed it has no direct investment exposure to Russia or Ukraine across its fund portfolios.
Chief executive Penny James said: "I am delighted by the group's strong performance and proud of the way we have navigated the complexities of a challenging market. Operating profit has increased to £582 million, own brands policies grew as our home, commercial and rescue businesses performed strongly, whilst in motor we steered a smart path through another uncertain period as the market sought to predict the impact of Covid-19."
Direct Line saw pre-tax profits fall due to restructuring and one-off costs, though it also revealed a 0.3 per cent fall in policies to 14.6 million while gross written premiums dropped 0.3 per cent to £3.2 million. It said within its own-brand business, policies rose one per cent, with gross written premiums down 0.8 per cent but 0.7 per cent higher in the final six months.
The company unveiled a 15.1p a share final dividend and a £100 million share buy-back programme. It said its combined operating ratio – a measure of underwriting profitability – improved to 90.1 per cent in 2021 and confirmed its target for 93 per cent to 95 per cent in 2022 and going forward.
A ratio below 100 per cent indicates profitable underwriting. Insurance analysts at Jefferies said the "new £100 million buyback programme and confirmation of targets sends out a confident message".
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