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UK insurers battling for customers: Direct Line CEO

In the crowded and competitive U.K insurance market place, the battle for new customers is heating up, the chief executive of Direct Line, the U.K.'s largest motor insurer, told CNBC Tuesday.

"Our retention rates are up, and our customer satisfaction (rates) are up," Paul Geddes, chief executive of Direct Line, which specializes in selling car, home, pet and travel insurance and other financial services, told CNBC Tuesday.

"New customers are attracted with good prices to get customers to switch but it is a feature of this market versus other financial services that there is a high degree of shopping around," he added, insisting that the firm was the "market leader in home and insurance, we have all the scale that we need…and we have famous brands."


Auto insurance
Nick M. Do | iStock | Getty Images

The insurance group's latest earnings report published on Tuesday appeared to reflect the brand's popularity, with pre-tax profit for continuing operations in the first half of 2015 rising nearly 50 percent to £315 million ($491.3 million), from £211.7 a year earlier.

"It's a good day for our customers and good news for our shareholders," Geddes said, adding that the company's brands, Direct Line and Churchill, were "both resonating well with customers." Shares of Direct Line were up 2.6 percent after the first half figures. The company announced an interim dividend per share of 4.6 pence.

Geddes said that company's costs were down 7.6 percent but said the company could "still be more efficient as a business. We think that's an opportunity for us."

The cost of car insurance for consumers was going up after a few years of decreasing prices, Geddes said, attributing that rise to claims costs going up throughout the industry.

"Part of that (cost increase) is due to large bodily injury claims and big accidents, some of is due to the cost of repairing a car going up, so we have some claims pressures and unfortunately we have to pass on to customers as prices."

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