Direct Line sees no material hit from claim underpayment redress

UK insurer Direct Line said rectifying unfair motor claim payments over a five-year period to 2022 would not have a "material financial impact" on this year's results.

The company was on Wednesday ordered by Britain's Financial Conduct Authority to carry out a review of total losses where vehicles had been written off after it admitted it had underpaid some car and van insurance customers.

Direct Line was told “to identify any policyholders who received unfair settlements and provide them with appropriate redress”.

In response on Thursday, the firm said an estimate of potential payments the group might make as a result of the review "was provided for within the group's 2022 financial year end claims reserves".

"The group does not expect the review to have a material financial impact in 2023," it added.

Reporting by Frank Prenesti for Sharecast.com