Direct Line made the announcement in a trading update for Q3 2024 in which CEO Adam Winslow outlined a “series of initiatives” aimed “simplifying the organisation to deliver £50 million gross costs savings in 2025”.
Winslow said: “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 update also said progress was being made towards the product build for launch of Direct Line on price comparison websites and that a comparison website partner had been selected.
Direct Line is not currently on price comparison websites but it announced in July that there were plans for its car insurance to be on comparison websites. It said the products offered via comparison websites would have different cover levels and features to the Direct Line motor insurance products sold directly to customers.
The update also noted that gross written premiums were up 5.5% over first nine months of 2024 and average motor premiums were up 3% from Q3 2023.
How life insurance can benefit your health and wellbeing over the decades
Sponsored by Post Office
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Direct Line is looking to cut around 550 jobs as the insurance giant continues to battle with internal demons and a tough trading environment. Cutting costs is one angle of attack to try and bring performance back on track, the other angle must come from stabilising the customer base, especially in the all-important motor division.
“Another 71,000 own-brand motor customers were lost over the third quarter as premiums were 3% higher than last year on average. The good news is that the rate of decline in customer numbers is slowing, as insurance prices are now starting to come down after some mammoth hikes were put through earlier in the year.
“It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market, and operational missteps have weighed on performance. But armed with a new leadership team, a more refined strategy, and new growth angles like the relaunch on price comparison sites, this looks like the best version of Direct Line for some time. Whether it’s able to deliver all that’s promised remains to be seen.”