By Yamini Kalia
(Reuters) – Direct Line Insurance Group plans to cut 550 roles or about 5% of its global workforce, the British insurer said on Monday, as its underperforming motor insurance arm continued to weigh on the business.
Direct Line has been trying to reinvigorate its business under a turnaround strategy launched by CEO Adam Winslow after it fended off a takeover attempt by Belgian rival Ageas in March.
“We feel that the direction of travel is positive but we absolutely acknowledge that early stages of turnaround is a lot more work to go,” Winslow said in an interview with Reuters.
The home and motor insurer has been implementing aggressive price hikes, like its peers, to help mitigate the rising costs of claims, but has also turned its customers away to cheaper rivals in the process.
The motor market has remained challenging in the quarter with Direct Line losing 71,000 own-brand motor customers.
However, the rate of decline reduced, in line with prior expectations.
Winslow told Reuters that majority of the 50 million pounds in cost-savings will be delivered through the layoffs announced today, but there is no guidance yet on which department they would impact.
The company had 10,131 employees globally, as of December-end, according to its annual report.
Direct Line’s shares, which rose as much as 1.2% in early trading, had reversed course to trade down 0.3% by 1200 GMT.
The insurer is working to launch its eponymous motor insurance brand on price comparison websites to attract new customers. Although no launch date is confirmed, a partner for the brand launch has been identified.
Total gross written premium and associated fees reached 3.13 billion pounds ($4.03 billion) year-to-date, a 5.5% increase from the 2.97 billion pounds logged a year ago.
($1 = 0.7757 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu and Toby Chopra)
