Direct Line is cutting 550 jobs as its boss embarks on a £100million cost-saving programme to turn around its fortunes.
The cuts, representing 5 per cent of the beleaguered insurance firm’s workforce, were announced as the group revealed that it had lost 71,000 own-brand motor insurance customers in the latest quarter.
Chief executive Adam Winslow said ‘the direction of travel is positive’, but that there was ‘a lot more work to go’.
Job cuts: Direct Line has revealed that it had lost 71,000 own-brand motor insurance customers in the latest quarter
Direct Line fended off a takeover attempt by Belgian rival Ageas earlier this year and has been implementing price hikes as the cost of claims soars.
That has prompted an exodus among its own-brand motor insurance customers, with the total number falling to just over 3m in the third quarter.
It is nearly 400,000 lower than at the same period a year ago, though the rate of customer exits has slowed in the latest three-month period, and other lines of business, including home insurance, have been more stable.
Total gross written premiums and other fees earned by the group in the third quarter fell 35 per cent to £705million, from nearly £1.1billion a year earlier.
Winslow’s strategy to grow customer numbers again involves making Direct Line insurance available on price comparison websites for the first time, reversing years of resistance to the move under previous bosses.
At the same time, the company said yesterday it was pushing ahead with £50million of the £100million cost-saving target previously announced by the chief executive, who was appointed in March.
Winslow suggested that there could be more cost-cutting to come after hitting the £100million target.
He said the job cuts announced yesterday were ‘not concentrated in one place, they are spread relatively evenly across the entire organisation as we look to improve our way of working’.
Bromley-based Direct Line, which also has eight other regional offices, employs around 10,000 staff.
Like other big employers, it has been hit by Chancellor Rachel Reeves’s decision to hike employer National
Insurance contributions in a £25billion tax raid though Winslow declined to put a figure on it.
‘We are a relatively large employer and so the cost is therefore relatively large,’ Winslow said.
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