Línea Directa will exceed one billion euros in turnover this year for the first time in its history and will return to profit after losing 4.4 million euros in 2023 due to the impact of inflation on all its sectors of activity, particularly the automobile sector.
This was announced in an interview given to EFE by the CEO of the entity, Patricia Ayuela, very satisfied with the progress recorded this year after a “very difficult” year 2023, during which the sector suffered in its accounts the consequences of the increase in the cost of all its services.
Línea Directa managed to turn the situation around by deciding “from the beginning and before the others” that it was necessary to adjust the premiums paid by customers to the risk they contributed, and in this way they improved margins (revenues) and started generating profits, already in the fourth quarter of last year.
“We are convinced that we will end the year above one billion euros in turnover, a magic number which “We have been dreaming for a long time.”says the CEO of Línea Directa, who does not disclose any net profit figures.
They also expect the combined ratio (the percentage ratio of claims to expenses, which is used to measure company profitability and is better the lower it is) to continue to improve. improve, which amounts to 95%, lower than the sector average.
They are not in Muface and do not intend to enter.
Regarding the new Muface concert, approved this week by the government in the midst of a strong economic controversy, Ayuela did not want to comment on its content or venture to know if the model will be able to survive with the offer to improve the offer by 17.12%, much lower than what Adeslas, Asisa and DKV requested, the insurers who provide the service.
“We are not in Muface and we do not plan to be,” the executive said, but she admitted that, as is the case in all insurance companies, Premiums must cover the insured risk and increase when costs increase, in order to maintain sufficient solvency to be able to meet its commitments to policyholders.
Regardless, he clarified that private health insurance is an “extraordinarily good complement for public health, because, among other things, it allows the client to have earlier access to specialists, who have long lists of waiting in public health, so “we must all this contributes to everything going well.”
The CCS will have to adapt to new risks
Regarding the negotiations that the insurance sector is having with the Insurance Compensation Consortium (CCS) modify the distribution of guarantees for certain extraordinary risks, like the snow, for which until now the sector has been responsible, Ayuela considered that the organization will have to adapt to the new reality.
“The Consortium is an excellent example of sectoral collaboration and allows insurers to insure their assets throughout Spain, which does not happen in other markets such as the United States, where some companies refuse to work in certain states due to atmospheric phenomena”, said Ayuela.
But this does not mean that when the organization was founded after the Spanish Civil War, the circumstances of atmospheric accidents were different and what were then considered extraordinary risks are not the same as those that exist today, this is why the CCS must move “towards a progressive approach”. adaptation”.
Anti-squatting insurance
Regarding anti-squatting insurance, which was the first to be launched and which was criticized for its usefulness, he explained that the product was created in response to the needs expressed by its customers, as happened for other policies such as insurance with excess, those for motorcycles or those for mobility.
And launching products that meet specific needs translates into success. Regarding contractual figures, for example anti-squatting, which is already requested by 70% of those who take out a Housing contract.
“I couldn’t disagree more” with those who disqualify these policies, because they cover what happens after the squat, necessary repairs to the house, just as is the case with fire insurance, of which no one does not doubt the existence and which protects the user in the face of infrequent accidents, but when they occur they are very serious.
“Insurers work hard to avoid risks” and for greater awareness among the population, said Ayuela, who gave as an example the dissemination work that the LDA Foundation carries out to prevent, among other things, accidents and deaths on the road.
Concerning car insurance, which has experienced a particular journey through the desert with very difficult times, especially since the start of the price increase, in the third quarter of 2021, she said she was convinced that things will eventually stabilize .
Inflation, which has increased on average by nearly 9%, was quickly transferred to the price of these policies, They also blamed the increase in the injury scale, which is updated based on average inflation, as well as increased supplies of spare parts for repairs and energy.
“The sector reacted quickly when these prices increased,” but “we did it before and that’s why we have a better than average combined ratio,” Ayuela boasted.
AI will help improve efficiency and prices
Regarding the role of Artificial Intelligence (AI) in the insurance sector and the perception that customers have of these changes, especially the elderly, Ayuela is sure that this technology will allow the company to be “even more efficient” and this will result in “ever better premiums for our customers”.
“We have made a big effort to digitize the business and today 89% of our customers interact with us through digital means. We carry out around 2 million digital transactions per month, twice as much as by telephone,” he adds.
However, he has not given up on the telephone and believes that this channel is not going to disappear, because in the insurance sector human treatment is sometimes necessary. support the customer when reporting particularly serious incidents, which can take the life or property of the insured.
As for the future, the CEO said Línea Directa is meeting all its commitments and is confident it can give “much more” as a company in terms of customer acquisition, profit growth and appreciation. actions.
