Direct Line Group has said its earnings outlook continues to remain challenging as it issued a trading update for Q1. It said total group adjusted gross written premiums for Q1 2023 were £805.7m, up 9.7% on the same period the previous year.

In its update, the insurer said: “During the quarter we continued to take pricing action in motor to improve our margins and made good progress towards target margins across the motor portfolio. As a result, average renewal premiums in Q1 increased by 19% compared to Q1 2022, reflecting premium rate increases during 2022 and in Q1 2023. Focusing on margin led to a reduction of in-force policies of 2.5% across the quarter and despite this gross written premium increased by 3.3% in Q1 2023.

“In Commercial, the strong premium growth seen in 2022 continued in Q1 2023 with gross written premium growth of 27.6% in Q1 driven by both direct own brands and NIG and other. In home, we observed significant price increases across the market. Our home gross written premium grew by 2.1% with policy count stable across Q1.”

Jon Greenwood, acting CEO of Direct Line Group, added: “Trading has been positive over the first quarter with premium growth across motor, home and commercial and this trend has continued into April.

“Our focus continues to be on restoring the capital strength of the Group and improving motor margins, where we have made good progress. Whilst 2023 earnings outlook continues to be challenging, the Group has many strengths, and we continue to take the actions required to drive business performance. Our ambition over time to generate a net insurance margin of above 10% remains.”

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