Direct Line posts above-forecast 2015 operating profit of $726 mln

LONDON, March 1 (Reuters) - Direct Line Insurance Group on Tuesday reported an above-forecast 2015 operating profit from continuing operations of 520.7 million pounds ($725.65 million), a rise of 3 percent from a year earlier.

Reduced costs and improved customer retention helped boost profits, Britain's largest motor insurer said in a trading statement.

Analysts on average had expected profit from continuing operations of 493 million pounds, according to a company-supplied consensus forecast.

The FTSE 100 company said it would pay a special dividend of 8.8 percent, and a final dividend of 9.2 pence per share.

Total (Swiss: FP.SW - news) dividends for 2015, including a special interim dividend of 27.5 pence per share following sale of the firm's international division, were 50.1 pence per share.

Direct Line reported a solvency capital ratio of 147.4 percent.

A ratio of 100 percent means that an insurer has set aside enough capital to meet underwriting, investment and operational risks.

($1 = 0.7176 pounds) (Reporting by Carolyn Cohn, editing by Sinead Cruise)