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The UK’s largest motor insurer has warned "significant disruption" could hit the group in the event of a no-deal Brexit.
Direct Line, which also owns the Churchill, Green Flag and Privilege brands, has increased its capital buffer after "taking into account the high level of political and economic uncertainty, including in relation to Brexit".
The FTSE 100 company said that if the UK left the EU in such a way "as to involve or lead to significant disruption, as has been conjectured in the event of a ‘hard’ no-deal Brexit", then the impact on the company could be "disruptive and potentially material".
Penny James, the group’s finance chief who is replacing chief executive Paul Geddes in May, said she was "comfortable" with Direct Line’s Brexit preparations. She said the business would not contact customers until it was clear there would be a no-deal scenario.
A hard Brexit could slow car repairs as some parts come from Europe, which could be caught up in delays at the ports, she said.
The business has already started offering Brexit green cards to motorists so they can prove they have insurance while travelling in the EU after March 29.
Its Brexit forecast came as the insurer reported a 6.4pc fall in profits to £601.7m for the year.
The results come two days after Mr Geddes, who led the motor insurer through its spin-off from taxpayer-backed RBS in 2012, was said to have been approached for the top job at John Lewis.
Mr Geddes downplayed speculation by saying that he was not planning to take a sabbatical and wanted to take up another full-time job, meaning he would be "linked to whatever comes up" in the City.
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