Direct Line, which has brands such as Churchill, Darwin and Privilege, as well as Green Flag rescue policies, rejected a revised 3.17 billion pound ($4 billion) takeover bid last week from Ageas as it "significantly undervalued" the company.

The Belgian insurer said on Friday it had not been able to "identify additional elements based on publicly available information that would justify significant adjustments to the terms of its possible offer," leading it to bow out altogether.

Direct Line said it was confident in the group's standalone prospects and stood by CEO Adam Winslow's leadership.

"The Board believes under Adam Winslow's leadership the company is well-positioned to drive material improvement in performance," it said in a statement.

Direct Line posted an operating loss for 2023 on Thursday as it grappled with high motor claims inflation, but reinstated its dividend.

($1 = 0.7941 pounds)

(Reporting by Richard Rohan Francis and Pushkala Aripaka in Bengaluru; Editing by Devika Syamnath and Alan Barona)