Direct Line chief executive Penny James steps down
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Direct Line CEO Penny James steps down just weeks after the insurer cut its dividend and warned of profits
- James stepped down effective immediately after nearly three years in office
- Direct Line stock has fallen about 50% during her tenure
- Finance chief Jon Greenwood has been appointed acting chief executive as the board searches for a replacement
Departure: Direct Line CEO Penny James
Penny James has stepped down as CEO of Direct Line effective immediately, weeks after the insurer cut its dividend following a wave of claims.
The FTSE 250 company has appointed chief commercial officer Jon Greenwood as acting chief executive as the board searches for a replacement.
Chairman Danuta Gray said the board will work closely with Greenwood to “restore the resilience of the balance sheet following the significant headwinds the company has faced in recent months.”
James, 53, joined Direct Line in late 2017 as chief financial officer and became chief executive in May 2019.
Under her tenure, which included the pandemic period, Direct Line’s shares have fallen about 50 percent.
This includes a drop of almost a quarter earlier this month after the insurance group announced it no longer expected to pay a final dividend to shareholders before 2022 and issued a profit warning, forecasting a loss for the full year.
The group said rising inflation drove up claims costs, while the effects of December’s cold spell also had an impact.
It expects the bill to total £90m – bringing ‘bad weather claims’ for the whole of 2022 to £140m if the cold spell early last year and the heat wave in the summer are taken into account.
That’s much higher than Direct Line’s previous forecast of £73m.
James said today: ‘It has been a privilege to lead the Direct Line Group for almost four years and work with such a great group of colleagues.
“While facing significant headwinds at the end of 2022, the Group continued to make strategic progress.”
Direct Line Stocks were down 0.1 percent to 178.6p in morning trading on Friday.
Gray said, “During her time as CEO, Penny has overseen significant strategic progress, transforming technology and capabilities across the company, accelerating the digitization of customer journeys and helping to future-proof the company.
“She also deserves credit for how she has guided the company through the pandemic, in a very challenging market, and ensured we continued to serve our customers.”
James’ departure comes a day after the company announced new strategic reinsurance deals, which are expected to boost the group’s capital adequacy ratio by about 6 percentage points by the end of 2022.