(Bloomberg) — Direct Line Insurance Group Plc shares set a record in London as the U.K. home and car insurer returned more cash to investors and said it will reduce costs in 2015.
The insurer, which was spun off from Royal Bank of Scotland Group Plc in 2012, rose as much as 1.9% to 336.7 pence, its highest price since the initial public offering. The board Tuesday raised the final dividend 4.8% to 8.8 pence and announced a second special dividend of 4 pence.
"We are going to shift up a gear in the delivery of our strategy," Chief Executive Officer Paul Geddes said on a conference call with journalists. "We will continue to reduce costs in 2015, but are not going to set a specific target."
The insurer said it had met all of its targets set out at the IPO including reducing its cost base 5.6% in 2014 to at least 1 billion pounds ($1.5 billion). Geddes also sold the company's German and Italian businesses to Spain's largest insurer Mapfre SA for 550 million euros ($614 million) in September and said he had no plans to sell anything else.
The insurer, based in Bromley, England, said it's planning to spend more money on branding and technology after reporting operating profit from continuing operations of 506 million pounds, little changed from a year earlier.
Gross written premiums fell 3.8% to 3.1 billion pounds for the full year. Geddes said rates had started to stabilize toward the end of 2014, with car insurance prices increasing by 1.7% in the fourth quarter.
The insurer's combined operating ratio for 2014 was 95%, 0.2 percentage points lower than 2013 boosted by reserve releases. The company set new ratio targets of 94% to 96%.
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