Direct Line (DLGD.L) withdrew its final 2019 dividend on Wednesday and said it would make no changes to staffing until at least the autumn, as it weighs the damage that coronavirus shutdowns are having on the insurance industry.
The company, the UK’s biggest motor insurer, said it had seen a falloff in claims for car accidents as motorists stayed in their homes, but that travel insurance claims were steadily rising, hitting 22 million pounds so far. (reut.rs/3bYTSl2)
“COVID-19 presents an unprecedented global challenge… It is too early to assess the impact of changes in customer behaviour that will arise given the broader consequences,” Chief Executive Officer Penny James said.
Separately, insurer Hiscox (HSX.L), which underwrites a range of risks including fine art, classic cars, and kidnaps and ransoms, said the resolution to approve the 2019 final dividend of 29.6 cents per share will no longer be put to shareholders at the annual general meeting.
Its board also agreed not to propose an interim dividend payment for 2020, or conduct any share buybacks.
The pullback comes after Britain’s Prudential Regulation Authority advised insurers last month to remain prudent in their approach to dividends.