Two of the UK’s largest car insurers have been hit by a fall in premiums, with market leader Direct Line also reporting a dip in policy numbers.
In its first results as a listed company, the owner of Churchill and Green Flag said gross written premiums dropped 5 per cent to £1 billion in the three months to 30 September, which it blamed on a 3 per cent fall in motor policies to 4.1 million.
Meanwhile, rival Admiral said its group turnover, including written premiums, slipped by 2 per cent to £570m in the same period, despite an 8 per cent rise in the number of vehicles on its books to 3.6 million.
Admiral, whose brands include Diamond and Elephant, said: “The UK car insurance market is cyclical and we are in the softer part of the cycle with premium rates coming down. We believe that the sensible strategy in this part of the cycle is to slow our rate of growth.”
Shares in the group tumbled 5.3 per cent to 1,081p on the news.
Direct Line, which floated last month after splitting away from former parent Royal Bank of Scotland, also revealed a 4 per cent decline in third-quarter operating profits to £123.7m but said it was halfway towards its £100m cost-cutting target. It has already announced the loss of 70 senior roles and the closure of its office in Teesside.
Chief executive Paul Geddes said: “We continue to focus on disciplined pricing and underwriting, delivering claims improvements and lowering our expenses through our cost savings initiatives.”