Direct Line Insurance Group PLC (LON:DLG) has proposed a 14.4p special dividend alongside to make up for the 2019 final dividend, cancelled in April in light of the pandemic.
It comes alongside the usual interim distribution, raised 2.8% to 7.4p per share on last year.
READ: Hastings and Direct Line top insurance picks as Berenberg says firms could provide effective hedge against second coronavirus wave
In the six months to June 30, in-force policies dipped 2% to £14.6mln, for profit before tax down 9% to £236mln after investment in initiatives to support customers and staff through the coronavirus crisis.
Operating profit shed 3% to £246mln but was ahead of consensus of £239mln, analysts at Shore Capital pointed out.
“We believe Direct Line’s results today show the defensiveness of the motor insurers to both the impact of COVID-19 and a recessionary period,” the broker noted.
“Motor insurance (and to a large degree home insurance if the policyholder as a mortgage) is a compulsory product, and frequencies (number of losses) decline in periods of weak economy activity.”
Shares shot up 9% to 336p on Tuesday morning.
--Adds shares--