Direct Line lost 434,000 car insurance customers over the last year after it dramatically increased premiums.
It said its own-brand auto policies fell to just over 3.2 million at the end of March.
Premiums for those who renewed their policies rose 38 per cent to an average of £515 a year, while for new customers they rose 25 per cent to £599.
It is the latest headache for chief executive Adam Winslow, who has had to fend off a £3.1bn takeover bid from Belgian suitor Ageas.
But investors ignored the setback and Share They rose 1.3 per cent, or 2.4 pence, to 191.1 pence, and are up 5 per cent this year.
Price increases: Direct Line revealed in a trading update that its own-brand motor policies fell to just over 3.2 million at the end of March.
Winslow is struggling to turn around fortunes after a turbulent 2023, when previous boss Penny James resigned amid a profit warning.
Direct Line later admitted it had underpriced policies and said it had been unusually exposed to weather claims.
It has since increased engine premiums to offset the rising cost of repairs.
Winslow, who joined in March, aims to cut costs by £100m and has not ruled out job cuts. It will announce a new strategy in July.
Yesterday’s update revealed a more resilient performance in home insurance, where the number of policies fell from 2.5 million to 2.45 million, despite premiums rising by 27 per cent for new customers and 13 percent for existing policyholders.
Overall, gross written premiums rose 11 per cent to £892.2 million in the first three months of the year.
They rose 18 per cent to £424.3 million for motor insurance and rose 14 per cent to £147.3 million for home.
The bad weather led to claims of around £33 million. Winslow said: “We have seen a positive start to 2024 operations, with double-digit gross written premium growth across our auto, home and commercial businesses and overall growth of 15 per cent.”
With the new executives recently announced, Winslow added: “I am confident that with the new leadership team in place, we will be able to achieve cost savings of at least £100 million by the end of 2025.”
Keith Bowman, an equity analyst at Interactive Investor, said Direct Line “is off to a solid start to the new financial year.”
