Direct Line Insurance : SASB Report (DLG SASB Report 2024 FINAL)

Sustainability Accounting Standards Board disclosure 2024 Introduction

We are pleased to report against the Sustainability Accounting Standards Board ("SASB") industry-specific disclosure standard for insurers. We recognise its value in how we communicate our approach to managing environmental, social and governance ("ESG")

Regulatory developments

The ISSB's Sustainability Disclosure Standards, IFRS S1 "General Requirements for Disclosure of Sustainability-related Financial information" and IFRS S2 "Climate-related Disclosures", are expected to be endorsed for use by the UK in 2025 and will provide a comprehensive

Key:

ARA Group Annual Report & Accounts 2024

Task Force on Climate-related Financial Disclosures 2024 (as

matters.

This disclosure is voluntary and considers how our existing reporting aligns to the recommended SASB Standards for insurers

baseline for companies to report against.

Further, during 2025 it is expected that the FCA will consult on transition plan disclosures for listed companies. We continue to monitor

TCFD

disclosed within the Group Annual Report & Accounts 2024)

and includes references to published material that supports our disclosure against each metric. Where necessary, there has been adaptation in the reporting against the recommended metrics to ensure disclosure of the most appropriate information applicable to our business (as is permissible in accordance with the SASB guidance).

For more information on how we are building a sustainable business see pages 44 to 57 of our Annual Report and Accounts 2024 ("ARA"). Also see pages 58 to 73 of the ARA 2024 for our latest disclosure aligned to the Task Force on Climate-related Financial Disclosures ("TCFD") recommendations and the Streamlined Energy and Carbon Reporting ("SECR") requirements.

the developments of the sustainability-related

reporting landscape and the associated disclosure requirements.

SFCR Solvency and Financial Condition Report 2024

CW Corporate website

COBC Code of Business Conduct Publications available at

https://www.directlinegroup.co.uk

SASB Disclosure Accounting Metric Code Disclosure Transparent Information & Fair Advice for Customers

Total amount of monetary losses as a result of legal proceedings associated with marketing and communication of insurance product-related information to new and

FIN-IN-270a.1 There is no material information to disclose relating to this metric.

There is no appetite for material risks resulting in reputational damage, regulatory or legal censure, poor customer outcomes, fines or prosecutions

returning customers

Complaints-to-claims ratio1FIN-IN-270a.2

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and other types of non-budgeted operational risk losses associated with the Group's conduct and activities. The Group's objective is to maintain a robust and proportionate internal control environment - page 38.

The Group carefully assesses and outlines the principal risks facing the business, including those associated with operational and regulatory compliance risk - page 42.

As at 31 December 2024, the Group did not have any material provisions in respect of legal proceedings associated with marketing and communication of insurance product-related information to new and returning customers - see note 31 in the notes to the Financial Statements on page 227.

The volume of complaints reportable, twice annually, to the Financial Conduct Authority ("FCA"). Data is reported as the number of complaints opened in the reporting period per 1,000 in-force policies for the Group's principal underwriter, U K Insurance Limited.

Note:

1. In accordance with FCA reporting requirements we publish the number of complaints received during the reporting period per 1,000 in-force policies instead of, as recommended by the SASB framework, per 1,000 claims filed.

Customer retention rate FN-IN-270a.3 The Group has not reported retention rates for 2024 owing to commercial sensitivity of the data.

ARA Additional information relating to the performance of our operating segments - pages 34 to 37.

ARA Net promoter score ("NPS") for Direct Line Group - page 47.

Accounting Metric Code Disclosure

Description of approach to informing customers about products

FN-IN-270a.4 We communicate with our customers via our regulated underwriting entity, U K Insurance Limited, through a variety of channels and literature. Customer communications include, but are not limited to, all financial promotions, website content, social media content, policy documentation and system generated communications.

To ensure our customers can make informed decisions we provide information regarding, but not limited to, the nature of our products, the terms and scope of insurance coverage, insurance policy exclusions, the costs of insurance policies, the ability to choose (or not) additional covers and the processes for making an insurance claim.

The Group's conduct objective in relation to product marketing is to ensure our customer communications are clear, fair and not misleading, targeted appropriately and include the relevant information in a way that is accessible and easily understood.

We provide a range of channels that customers can contact us, including our digital first customer journeys.

ARA A summary of our core business areas, products and brands can be found in The Group at a Glance - page 2.

We make sure that our products and services are designed to meet an identified need and that customers are provided with clear information, are

COBC

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kept informed and can make amendments easily. We regularly monitor our performance in relation to standards of service, product performance and customer outcomes - page 5.

The Group's approach to meeting the needs of all its customers, including the Group's focus on providing choice, value for money and service - pages 46 to 47.

Incorporation of Environmental, Social, and Governance Factors in Investment Management

Description of approach to incorporation of ESG factors in investment management processes and strategies

FN-IN-410a.2 ARA Integration of ESG considerations into our investment strategy - page 53.

TCFD Scenario analysis exploring the financial impact of transition risk on the Solvency II balance sheet value of investment assets - pages 61 to 63.

TCFD Implementation of climate-related initiatives into the Group's investment strategy - pages 66 and 71.

CW Responsible investment initiatives which are incorporated into the Group's investment strategy.

Policies Designed to Incentivise Responsible Behaviour

Net premiums written related to energy efficiency and low carbon technology

FN-IN-410b.1 The Group does not disclose written premium for policies related to energy efficiency and low carbon technology.

Accounting Metric Code Disclosure

Discussion of products and/or product features that incentivise health, safety, and/or environmentally responsible actions and/or behaviours

FN-IN-410b.2 The Group's telematic policies encourage younger drivers to develop safe driving habits whilst also providing the opportunity to receive policy premium discounts.

At the time of its launch in 2024, the Group is the only UK breakdown

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TCFD

provider to offer services as part of Apple's Roadside Assistance via satellite, providing customers reassurance that help may be provided even when they have no mobile reception - pages 5 and 47.

The Group has expanded its Motor products to support customers who are changing to electric vehicles. For example, car insurance now covers batteries, home charging kit and cables - page 65.

Financed Emissions

Absolute gross financed emissions disaggregated by (1) Scope 1; (2) Scope 2; and (3) Scope 3

FN-IN-410c.1

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The Group does not currently publish disaggregated data on all financed emissions. Aggregate financed emissions in respect of commercial property and real estate loans are disclosed.

Note that due to time lags in receipt of financed emissions data from the Group's asset managers this data is published with a one year time lag -page 73.

Gross exposure for each industry by asset class FN-IN-410c.2

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Analysis of debt securities and infrastructure debt by industry is disclosed in note 1 to the Financial Statements on pages 179 and 180. Analysis of investment property by type is disclosed in note 18 to the Financial Statements on page 203.

Percentage of gross exposure included in the financed emissions calculation

Description of the methodology used to calculate financed emissions

FN-IN-410c.3

FN-IN-410c.4

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Not reported by the Group. The Group, however, includes four science-based greenhouse gas emission reduction targets in its investment portfolio, covering corporate bonds, commercial property and real estate loans - 70% of the Group's assets under management See pages 52, 66 and note 23 to the Financial Statements on page 221.

The Group uses the Partnership for Carbon Accounting Financials ("PCAF") methodology to calculate emissions associated with its investment activities - page 72.

Physical Risk Exposure

Probable Maximum Loss of insured products from weather-related natural catastrophes

FN-IN-450a.1

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Catastrophe reinsurance protects us against an accumulation of claims arising from a natural perils event. We place this annually up to a modelled 1-in-200 year loss event. For the 12 months from 1 January 2025, we have a retained deductible of £100 million - pages 33 and 69.

Total amount of monetary losses attributable to insurance payouts from:

1. modelled natural catastrophes, and

2. non-modelled natural catastrophes, by type of event and geographic segment (net and gross of reinsurance)

FN-IN-450a.2 ARA Home and Commercial claims costs related to major weather events,

including inland and coastal flooding and storms - pages 21, 37 and 247.

ARA Loss ratios for major weather events - pages 37 and 246.

TCFD The impact of severe weather on the Group's net insurance margin - page 69.