Company Announcements

DIRECT LINE INSURANCE GROUP PLC

TRADING UPDATE FOR Q3 2024¹

Early operational progress towards our targets

11 November 2024

Adam Winslow, CEO of Direct Line Group, commented:

"We delivered double-digit premium growth year on year in Motor, Home and Commercial Direct. However, we are in the early stages of a significant turnaround and our Q3 trading is not yet fully reflective of the actions we have taken. In Motor, trading conditions have been challenging although we continued to grow policy count on price comparison websites ("PCW") and have worked at pace on the launch of the Direct Line brand in this channel.

"We are making good progress against our gross cost savings target, with around £50 million expected to be delivered in 2025 from improvements in procurement, technology rationalisation and simplifying our operating model.

"I'm pleased with the strategic and operational progress we are making across the business. I'm delighted that Jane Poole recently joined as CFO and is already focused on reviewing our financial strategies, policies and controls. In total we have hired eight² new Executive leadership team members, six of whom have already started. This reinforced and refreshed team will help us unlock the potential of DLG and deliver the strategy we set out at the Capital Markets Day in July.

"We believe the steps we are taking will position the company for enhanced profitability and growth as we build on our strong foundations to become the customers' insurer of choice."

Operational and strategic update: Early progress towards our targets

Trading update

Outlook

We continue to target 7% to 10% compound annual growth ("CAGR") in gross written premium and associated fees between 2023 and 2026 in Non-Motor, and we reiterate our net insurance margin target for ongoing operations, normalised for event weather, of 13% in 2026.

Trading summary

APPENDIX 1: Gross written premium and associated fees

APPENDIX 2: In-force policies by segment⁶ (thousands)

APPENDIX 3: Motor and Home average premium (£)

Notes:

Forward-looking statements disclaimer

Certain information contained in this document, including any information as to the Group's strategy, plans or future financial or operating performance, constitutes "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "aims", "ambition", "anticipates", "aspire", "believes", "continue", "could", "ensures", "estimates", "expects", "guidance", "intends", "may", "mission", "outlook", "over the medium term", "plans", "predicts", "projects", "propositions", "seeks", "should", "strategy", "targets", "vision", "will" or "would" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They may appear in several places throughout this document and include statements regarding intentions, beliefs or current expectations, including of the Directors, concerning, among other things: the Group's results of operations, statement of financial position, financial condition, prospects, growth, net insurance margin, insurance service result, strategies, the industry in which the Group operates and the Group's approach to climate-related matters. Examples of forward-looking statements include financial targets with respect to return on tangible equity, solvency capital ratio, net insurance margin, combined operating ratio, percentage targets for current-year contribution to operating profit, prior-year reserve releases, cost reductions, reduction in net expense ratio, investment income yield, net realised and unrealised gains, capital expenditure and risk appetite range; and targets, goals and plans relating to climate and the Group's approach and strategy in connection with climate-related risks and opportunities. By their nature, all forward-looking statements involve risk and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and/or are beyond the Group's control and/or they rely on assumptions that may or may not transpire to be correct. Forward-looking statements are not guaranteeing future performance.

The Group's actual results of operations, financial condition and the development of the business sector in which the Group operates may differ materially from those suggested by the forward-looking statements contained in this document, for example directly or indirectly as a result of, but not limited to:

In addition, even if the Group's actual results of operations, financial condition and the development of the business sector in which the Group operates are consistent with any forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

The forward-looking statements contained in this document reflect knowledge and information available as at the date of preparation of this document. The Group and the Directors expressly disclaim any obligation or undertaking to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, unless required to do so by applicable law or regulation. Nothing in this document constitutes or should be construed as a profit forecast.

Neither the content of Direct Line Group's website nor the content of any other website accessible from hyperlinks on the Group's website is incorporated into, or forms part of, this document.

LEI: 213800FF2R23ALJQOP04