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Línea Directa Aseguradora

Sound, healthy and very profitable

Línea Directa Aseguradora, which is wholly owned by Bankinter, saw strong growth in 2016, widening its margins and taking a step forward in innovation with the launch of its Digital Policy. This allowed it to consolidate its leading position among companies that operate via the telephone and online, with a 60% market share achieved through organic growth, and no mergers or acquisitions. It is ranked fifth among auto insurance companies and 17th with respect to homeowners insurance.

Its business model is based on the use of direct channels of distribution, which allows it to offer very competitive prices by cutting out intermediation costs that contribute no value to the final customer. This strategy, coupled with values like prudence in the selection of risks and its powerful commercial dynamism, make Línea Directa one of the most robust insurers in Spain.

Sales record

In 2016, the company attained net growth of more than 200,000 policies in its portfolio, bringing it to more than 2.5 million euros. The increase in auto insurance policies was 7.8%, compared to the sector average of 5.1% and the 14.8% increase in homeowners insurance was four times that seen in the rest of the sector (3.6%). The causes of these advances lie in the overall improvement in the economic situation, the recovery in the automobile market, the increase in home buying and, above all, a commercial strategy based on specialisation, flexibility and quality.

The revenue of Línea Directa also significantly increased (by 8.7%) up to 738.7 million euros, the highest level in its history. Special mention should be made of homeowners' insurance, whose volume of premiums surpassed 78 million, which amounts to 10.5% of the company's total income.

Línea Directa ended 2016 with a volume of issued premiums of 738.7 million euros, the highest in all its history.

Earnings before taxes totalled 136.6 million euros, which is a figure in line with targets, which placed a priority on growth and portfolio volume in financial results in 2016. Return on equity (ROE) was 33.2%. The coverage of technical provisions was 134% and the solvency ratio was 231%. These figures make Línea Directa a sound, healthy and extraordinarily profitable enterprise.

The best insurance margin

Another of Línea Directa's distinctive traits is its selection of risk and control of expense. In this regard, the combined ratio (one of the key indicators in any insurance company, comparing premium income with total accident and operating costs) was 88% in auto, some 11 points lower than the average for the sector as a whole.

The claims rate also performed in relative contained fashion (69.6%), in a quite critical context due to the increase in mobility, the rise in claims frequency and, above all, the entry into force of the new system for assessing damages in traffic accidents, which significantly increased indemnities, especially for major injuries.

Innovate to grow

In 2016, the Digital Policy was launched. It eliminates the sending of printed documentation to the customer, thus providing benefits with respect to both the environment and in costs. The policy, which has now been implemented in 65% of the new car insurance contracts, is expected to reach 80% of the total portfolio of private vehicles in 2017.

Last year also saw the launch of the 'Poliza Respira', which makes Línea Directa the first company offering specialised insurance for electric cars. It is an all-risk policy with an excess of 100 euros in the first year, with no mileage limit. With this product, the company is making a commitment to sustainable mobility and environmental protection.

Responsibility and reputation

Línea Directa was included in the Merca Empresas 2016 best reputation ranking at 50th, which is 17 rankings higher than in 2015. Also, it appeared in the monitors Merco Talento and Merco RSC at 37th and 85th, respectively.

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