Direct Line to sell own-brand policies on price comparison websites
Direct Line, one of the UK’s largest insurers, is to sell its own-brand policies on price comparison websites for the first time in a major strategic shift.
Until now, the company has prided itself on dealing directly with customers, rather than through portals such as Money Supermarket and Confused.
But yesterday, CEO Adam Winslow, who took over in March, said the policy must change and criticised previous bosses for not doing so sooner.
“Over the past five years, price comparison websites have seen their share of new business increase from about 80 percent to 90 percent. Winning on price comparison is key to growth,” Winslow said.
U-turn: Direct Line to sell own-brand policy on price comparison websites for the first time in major strategic shift
He added that Direct Line would launch “bespoke” products on the sites, but with a “clear distinction” from the products it continues to sell directly.
Other brands in the group – Churchill, Privilege, Darwin and By Miles – already use them.
The announcement was part of a major strategy which saw Direct Line reiterate its aim to cut costs by £100m a year and say this would mean job losses.
According to Winslow, the focus is increasingly digital, which means a “different profile of resources and probably fewer resources” are needed, including people.
He said no announcements about layoffs would be made without consulting staff. The company employs about 9,000 people.
Winslow is pushing to turn the tide after a turbulent 2023, when previous boss Penny James stepped down after issuing a profit warning.
Direct Line also had to turn down interest from Belgian insurer Ageas, rejecting a £3.1 billion takeover bid this year.
Winslow said it had suffered from “historic underperformance” and had “lost its technical edge”. He said the company would now “do fewer things better”, focusing on home and business insurance and roadside assistance, while exiting or scaling back other areas, such as insurance partnerships with automakers.
Shares rose 3.3 percent, or 6.3p, to 199.2p, up almost 10 percent year-to-date.
Russ Mould, investment director at AJ Bell, said Direct Line had “finally relented” in what was “a major change for the business”.
‘It has become natural for people to buy insurance through comparison sites, and these days it is often the first website they go to for a quote,’ says Mould.
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