Direct Line is cutting 550 jobs as its boss launches a £100m cost-cutting program to turn around its fortunes.
The cuts, which represent 5 percent of the beleaguered insurance company’s workforce, were announced as the group revealed it had lost 71,000 own-brand car insurance customers in the last quarter.
CEO Adam Winslow said that “the direction of travel is positive” but that there is “still a lot of work to do.”
Job losses: Direct Line has revealed it lost 71,000 own-brand car insurance customers in the last quarter
Direct Line fended off a takeover attempt from Belgian rival Ageas earlier this year and has implemented price increases as claims costs skyrocket.
That has led to an exodus among own-brand car insurance customers, with the total number falling to just over 3 million in the third quarter.
It is down almost 400,000 from the same period a year ago, although the number of customers leaving stores has fallen over the past three months and other industries, including home insurance, have remained more stable.
Total gross premiums and other fees earned by the group in the third quarter fell 35 percent to £705 million, compared with almost £1.1 billion a year earlier.
Winslow’s strategy to regrow its customer base will see Direct Line insurance made available on price comparison websites for the first time, ending years of resistance to the move under previous bosses.
At the same time, the company said yesterday it is continuing £50 million of the £100 million cost savings target previously announced by the CEO, who was appointed in March.
Winslow suggested further cost savings could follow if the £100 million target was reached.
He said the job cuts announced yesterday “are not concentrated in one place, but are spread relatively evenly across the organization as we look to improve the way we work.”
Bromley-based Direct Line, which also has eight other regional offices, employs around 10,000 staff.
Like other major employers, it has been hit by Chancellor Rachel Reeves’ decision to increase employer National
Insurance premiums in a £25bn tax raid, although Winslow declined to put a figure on it.
“We are a relatively large employer and so the costs are relatively high,” says Winslow.
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