Línea Directa, whose main shareholder is Bankinter with 17% of the capital, is preparing to follow in the footsteps of Mapfre and will begin to apply increases to automobile insurance clients after the increase in inflation and the accident rate. However, he points out that they will not be generalized, that they will only affect customers with the highest risk and that the group will be 13% cheaper than the average of its competitors.
"In our pricing policy, we give each client their price according to their risk, we try not to mutualise it. Some will pay more and others will not pay more. The important thing is to maintain the premium differential of 13% with respect to the sector," said the counselor. delegate of the insurer, Patricia Ayuela, at the press conference to present the results.
Línea Directa obtained a profit of 59 million euros in 2022, 46% less than in the previous year, due to the increase in inflation, which makes the cost of any incident more expensive, and the increase in the accident rate after two years of the pandemic. The most affected business is the automobile, in which the margins of the entire sector have been reduced to the minimum expression after several years of strong commercial competition.
This pressure has already led the leader in Spain in this business, Mapfre, to announce increases in policies. "You have to be aware and realistic" and the forecast is that "we will adjust prices appropriately to maintain the solvency of the companies," the president of Mapfre, Antonio Huertas, recently stated.
The CEO of Línea Directa agreed that 2022 "has been a very intense year, with enormous pressure on margins, especially in the automobile industry." "Each company has to follow the most appropriate strategy based on their interests and circumstances, and we are focused on recovering technical margins and that each client pays according to their risk," she said. "The average risk of our clients is very good."
Premium income increased by 4.4% and stood at 946 million, which is a record for Línea Directa and its own volume in 2019. The number of clients also increased, by 3.4%, to 3.46 million , and revenues were up in the main business areas: they rose 3.3% in automobiles, 9.5% in home and 10% in health.
Inflation, he points out, "has caused a strong and sudden increase" both in repair costs and in the rates of injuries and fatalities. Added to this is "the increase in accident frequency due to the recovery of mobility to pre-pandemic levels." Premium levels, after several years of strong competition, have reached historic lows.
However, the "situation is adverse" and inflation has been added to an increase in the accident rate of almost nine points, to weigh 75% on income. In the automotive field, there are insurers in the United States that have already exceeded the rate of 100%, which makes them enter into losses.
In the automotive sector, revenues amounted to 772.8 million euros, 3.3% more, in line with the average for the sector. In the last quarter of the year, Línea Directa was one of the two automobile insurers that grew the most, which is "remarkable taking into account the weakness of the automotive market, with sales still 35% below the levels of 2019". Línea Directa accumulates 2.6 million customers of automotive insured, 2.7% more.
Línea Directa maintains a profitability level of 17.8%, above the average, and digital transformation has been made a strategic priority, with which it aspires to reduce costs, improve its efficiency and strengthen the relationship with the client.
