'Major shock to the market' as insurer Direct Line scraps dividend following flood of claims

Direct Line has seen its shares fall by a quarter after it scrapped its final dividend, blaming a flood of claims related to bad weather in the UK last month.

While motor insurers performed strongly during the COVID pandemic as few customers were driving, inflationary pressures and supply chain issues due to the pandemic and the war in Ukraine have pushed up the cost of repairs. "Things have gone from bad to worse," analysts at Jefferies said in a note, adding they expected the axed final dividend to"come as a major shock to the market".Shares fell by more than 25% in early deals.

You would think all insurance companies would be suffering

Electric cars do more damage when they collide because of the weight of batteries. Like driving a tank but without the armour.

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