Insurance group Direct Line is set to reduce staff by 550 jobs as part of delivering £50m gross costs savings in 2025.
The firm also wants to show material progress towards its target of of at least £100m gross cost savings by the end of 2025.
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Adam Winslow, CEO of Direct Line Group, said: “We delivered double-digit premium growth year on year in Motor, Home and Commercial Direct. However, we are in the early stages of a significant turnaround and our Q3 trading is not yet fully reflective of the actions we have taken. In Motor, trading conditions have been challenging although we continued to grow policy count on price comparison websites (“PCW”) and have worked at pace on the launch of the Direct Line brand in this channel.
“We are making good progress against our gross cost savings target, with around £50 million expected to be delivered in 2025 from improvements in procurement, technology rationalisation and simplifying our operating model.
“I’m pleased with the strategic and operational progress we are making across the business. I’m delighted that Jane Poole recently joined as CFO and is already focused on reviewing our financial strategies, policies and controls. In total we have hired eight2 new Executive leadership team members, six of whom have already started. This reinforced and refreshed team will help us unlock the potential of DLG and deliver the strategy we set out at the Capital Markets Day in July.
“We believe the steps we are taking will position the company for enhanced profitability and growth as we build on our strong foundations to become the customers’ insurer of choice.”
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By GlobalDataMatt Britzman, senior equity analyst, Hargreaves Lansdown, stated: “Direct Line is looking to cut around 550 jobs as the insurance giant continues to battle with internal demons and a tough trading environment. Cutting costs is one angle of attack to try and bring performance back on track, the other angle must come from stabilising the customer base, especially in the all-important motor division. Another 71,000 own-brand motor customers were lost over the third quarter as premiums were 3% higher than last year on average. The good news is that the rate of decline in customer numbers is slowing, as insurance prices are now starting to come down after some mammoth hikes were put through earlier in the year.
“It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market, and operational missteps have weighed on performance. But armed with a new leadership team, a more refined strategy, and new growth angles like the relaunch on price comparison sites, this looks like the best version of Direct Line for some time. Whether it’s able to deliver all that’s promised remains to be seen.”
