General insurer Direct Line has purchased By Miles, a managing general agent and provider of real-time pay-by-mile insurance policies, for an undisclosed sum.

By Miles is a UK startup that provides pay-as-you-drive car insurance to those who drive fewer than 7,000 miles a year.

Direct Line already underwrites By Miles’s new business and the acquisition has “negligible” impact on the group’s capital position, the insurer said.

The startup’s proprietary, cloud-based platform supports simple car insurance products that allow customers to pay only for the miles they drive. Direct Line also praised By Miles’s smartphone app, “which enjoys high levels of customer engagement and ratings on app stores”.

Andy Broadfield, who leads Direct Line Group’s ecosystems team, described the deal as “a perfect fit”. 

He explained: “We’re creating easy, digital-first journeys to enable customers to pick the motor insurance cover that best suits them. Combining our customer-friendly brands, underwriting and data expertise with By Miles’ innovative connected car capability and engaging customer proposition is an exciting prospect. We can’t wait to get started because it provides exciting potential for the group to meet more of the needs of more customers.”

Having sold more than 100,000 policies since its launch in 2018, By Miles currently has around 50,000 customers, writing £26m of premiums.

James Blackham, chief executive of By Miles, said: “Direct Line’s underwriting data and insight, commitment to customer experience and comprehensive knowledge of building household brands chimes perfectly with our mission of bringing the benefits of fair, data-led pricing to as many UK drivers as possible.”