Direct Line announced the job cuts as it revealed a further loss of own-brand motor insurance customers.
Its number of own-brand motor insurance policies fell from 3.119 million at June 30 to 3.048 million at September 30, its trading update this morning reveals.
Average own-brand motor insurance premiums in the third quarter were up about 3% on the same period of last year.
Direct Line said: “A series of initiatives aimed at simplifying the organisation is projected to deliver £50 million gross costs savings in 2025, showing material progress towards our target of at least £100 million gross cost savings by the end of 2025, on a run rate annualised basis. 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.”
Matt Britzman, senior equity analyst at stockbroker 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.
Read more
“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.”
Read more
He added: “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.”