(Bloomberg) -- Direct Line Insurance Group Plc’s first-half profit fell short of estimates as analysts had expected a faster turnaround.
The UK’s second-largest auto insurer posted an operating profit of £63.7 million ($83.6 million), up from a loss of £93.7 million a year earlier, short of the average estimate of £80 million.
Direct Line has been working on a turnaround plan that included hiring Adam Winslow as chief executive officer in March. His predecessor stepped down last year after an unexpected increase in weather-related claims. The firm has been shoring up its balance sheet, including the sale of its brokered commercial insurance unit to Intact Financial for £520 million in October last year.
“I’m happy with the direction of travel but I absolutely acknowledge there is a lot more to do,” Winslow said in an interview.
Direct Line shares fell as much as 3.3% in London trading.
The core motor business had an operating profit of £3.1 million, also recovering from a loss, though was short of the £7.2 million estimates.
In motor insurance, “we’re coming from behind,” Winslow said. “We didn’t get the pricing for inflation right and we have been catching up.”
The company announced an interim dividend of 2p, half of what analysts expected.
“Although a return to profitability will be welcomed, Direct Line Group still missed consensus estimates,” Third Bridge Analyst Max Georgiou said in a note.
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