Direct Line Insurance Group PLC on Friday said a miscalculation has been found in its Solvency II capital ratio for 2023, which means it was lower than previously reported.

The London-based car and home insurer said the error arose particularly in the translation of the reinsurance debtors between IFRS and Solvency II own funds, and the error will not have an impact on the IFRS figures.

Amending the error, the company said its year-end solvency capital ratio was revised down to 188% from 197%. It noted this is still above its risk appetite range of 140% to 180%.

Direct Line said it estimates its solvency capital ratio improved to around 200% by June 30, thanks to strong capital generation in the first half of 2024 from a combination of operating earnings, one-off benefits from partnerships, and market movements.

The firm said it had implemented measures to strengthen its control environment where the miscalculation was made.

Direct Line is set to report half-year results to June 30 on September 4.

Shares in Direct Line were down 2.4% to 184.50 pence in early exchanges in London on Friday.

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