Direct Line considers cutting 550 roles as motor market remains ‘challenging’
Direct Line is considering cutting around 550 roles as the insurance broker battles with “challenging” market conditions.
The firm is looking to deliver around £50m in cost savings in 2025. It said this will come through improvements in procurement, technology rationalisation and simplifying the business model.
“Our drive to create a leaner and more efficient operating model is advancing, with consultations currently taking place as part of a proposed reduction of around 550 roles,” the firm said.
The announcement came alongside the firm’s trading update for the third quarter.
Gross written premiums and associated fees fell to £705m in the three months to September, down over a third from the £1.1bn in the same period last year.
The motor market performed particularly poorly with premiums falling by nearly half, although Direct Line noted that the comparison excludes premiums booked from its Motability contract, which will be booked in the fourth quarter.
“We are in the early stages of a significant turnaround and our Q3 trading is not yet fully reflective of the actions we have taken,” Adam Winslow, boss of Direct Line, said.
“In Motor, trading conditions have been challenging although we continued to grow policy count on price comparison websites and have worked at pace on the launch of the Direct Line brand in this channel,” he added.
Despite the slowdown in the third quarter, Direct Line maintained its trading targets for the medium term. In the nine months so far this year, the firm has seen premium growth of nearly 12 per cent.
The firm is targeting a compound annual growth rate of 7-10 per cent in gross written premiums between 2023 and 2026. It is aiming for a net insurance margin target of 13 per cent in 2026.