Premiums fell at Direct Line in the third quarter of the year, as people bought fewer new cars during the period.
The company said it has seen a drop in gross written premiums by 0.8% to £851.5 million.
Fewer young drivers took their tests and started driving during the quarter, and the number of new car sales dropped.
It helped push down own-brand gross written premiums by 1.4%, as the risk mix dropped, alongside small inflation in the market rate for premiums.
“There were some interesting developments in Direct Line’s motor division, where in force policies were flat but premiums fell as people bought fewer new cars and fewer new drivers entered the market,” said Hargreaves Lansdown analyst William Ryder.
Direct Line said the increase in the cost of repairs had been offset by fewer accidents that required repairs.
Mr Ryder said: “While claim frequencies fell, the average claim was more expensive as repair shops incurred higher costs due to Covid-19.”
Chief executive Penny James said: “We are encouraged by our trading performance in Q3 where we saw a return to strong growth in Green Flag and commercial and some improvement in motor and home own brands, particularly in the price comparison website channel as customer shopping activity started to recover.
“This progress is testament to the flexibility and commitment of our people who have been successfully navigating through the Covid-19 pandemic, delivering good operational progress, providing extra support for our customers and helping local communities.”
Mr Ryder said there had been little in the update that changes Direct Line’s big picture.