Motor insurer Direct Line Group has revealed a 10.5 per cent increase in pre-tax profits to £261.3m for the first half of 2021.

The firm said claims had slumped in the first quarter of the year, with remote working and lockdowns keeping drivers of the roads and fewer new car sales.

Total earnings jumped 40 per cent to £369.9m, but gross written motor premiums were down 6.2 per cent to £755.6m.

Direct Line said the trends subsided in the second quarter as restrictions eased, as the fall in gross written premiums narrowed from 10.6 per cent in the first quarter to 1.5 per cent in the second.

Chief executive Penny James said: "We returned to growth in the second quarter, which is testament to our diversified business model, with commercial, home and rescue performing strongly."

Direct Line said it had invested heavily in upgrading technology within the business, with overhauls of the Direct Line and Churchill negative tests.

"This is an exciting and pivotal point for the business, we've completed the majority of our tech transformation, and we're starting to reap the benefits of what the new systems offer us."

The share price rose by three per cent in early trading, helped by Direct Line's announcement of a 7.6p a share interim dividend, up 2.7 per cent on 2020's dividend.