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Direct Line ups dividends as FY'17 profit rises 55.7% YOY

Direct Line Insurance Group Plc reported full-year 2017 consolidated profit attributable to owners of the company of £434.0 million, up 55.7% from £278.8 million earned a year ago.

EPS for the year was 31.5 pence, up from 20.2 pence in 2016. Return on equity amounted to 16.6% in 2017, compared to 10.8% a year earlier.

Net earned premiums increased year over year to £3.14 billion from £3.00 billion. Gross written premiums came in at £3.39 billion, up from £3.27 billion in the prior-year period. The British insurer recorded underwriting profit of £256.9 million, up from £70.1 million in 2016.

Net insurance claims dropped on a yearly basis to £1.75 billion from £1.80 billion. The British insurer booked total expenses of £1.09 billion in 2017, compared to £1.14 billion a year earlier.

Direct Line proposed to increase the final dividend for 2017 by 40.2% year over year to 13.6 pence per share from 9.7 pence per share and declared a special dividend of 15.0 pence per share, bringing the total dividend for the year to 35.4 pence per share, up from 24.6 pence per share in 2016.

The final and special dividends will be paid May 17 to shareholders on the register April 6.

The group's estimated Solvency II capital ratio post-dividend was 162% as of Dec. 31, 2017, compared to 165% at the end of 2016.

The combined operating ratio from ongoing operations was 91.8% for 2017, compared to 97.7% a year earlier. Adjusted for normal weather, the group said the combined operating ratio was towards the lower end of its 93% to 95% target range, which it will continue to reach for in 2018 and over the medium term, assuming a normal annual level of claims from major weather events and no further change to the U.K. personal injury discount rate, or Ogden rate.