Interim ordinary dividend of 7.2 pence per share has been declared.
With a strong capital position, solvency capital ratio of 180% (after the interim dividend) reflecting continued prudence given current political and economic uncertainties.They have grown their interim dividend by 2.9% and reiterate their 2019 financial targets of a combined operating ratio of 93% to 95%, normalised for weather, and operating expenses of less than £700 million.
Other financial highlights include:
- They grew direct own brands in-force policies by 2.0%, demonstrating our diversified portfolio and pricing capabilities in competitive markets. Total in-force policies reduced by 3.2% primarily as a result of partnership exits announced in 2017.
- Gross written premium was 2.2% lower. A reduction in Motor was partially offset by growth in Rescue and Commercial whilst Home own brands were stable, demonstrating our diversification.
- Operating expenses of £363.0 million were £16.1 million lower than H1 2018 and the lowest since H1 2015. H1 costs are typically higher than H2 due to timing of Flood Re levy payments. The Group remains on track to reduce operating expenses to less than £700 million in 2019.
- Combined operating ratio of 92.5% improved by 0.4 percentage points largely due to benign weather in the period. Adjusting for normal weather, the combined operating ratio was 94.6% (H1 2018: 90.7%), within the Group's medium-term target of 93% to 95%. The change in the Ogden discount rate to minus 0.25%7increased the combined operating ratio by 1.1 percentage points.
- Operating profit of £274.3 million was £31.2 million lower mainly due to the reversal of the exceptional Motor performance in the first half of 2018, the non-repeat of a gain on an own property sale and lower investment gains which were partially offset by lower weather claims costs and lower operating expenses.
