Insurance provider Direct Line Group has announced plans to eliminate approximately 550 jobs as part of a cost-cutting initiative aimed at saving £50m in 2025.
This reduction represents over 5% of the company’s 9,000-strong workforce. The announcement coincides with a trading update revealing ongoing challenges in the motor insurance sector.
Direct Line reported an 11% year-on-year decrease in own-brand motor insurance customers, now totalling 3.05 million.
Adam Winslow, Chief executive, said: “We are in the early stages of a significant turnaround and our third quarter trading is not yet fully reflective of the actions we have taken.”
Direct Line has faced several recent setbacks, including rising claim costs, a change in leadership, and suspension of shareholder dividends.
The company also had to fend off a £3.1 billion takeover attempt by Belgian rival Ageas earlier in 2024.
The firm’s revamp plan includes significant cost reductions and increasing insurance premiums.
However, the strategy of raising motor cover prices has led to a substantial loss of customers, with nearly 400,000 own-brand motor policyholders leaving the group in the past year.
Despite these challenges, Direct Line sees some positive indicators, including a slowing customer exodus and the introduction of the Direct Line brand on price comparison websites, which has helped boost customer numbers.
