(Alliance News) – Direct Line Insurance Group PLC announced Monday the elimination of 550 jobs following a decline in gross premiums in the third quarter.
The London-based motor and home insurer announced a 35% fall in gross written premiums and associated costs to £835.9 million, compared to £1.28 billion the previous year. Over the quarter, this figure is down 40% from £1.40 billion.
The FTSE 250-listed company’s automotive arm was one of the worst performers of the year, falling 48% to £426.2m, compared to £826.8m the previous year , with partnerships in this sector decreasing from £391.7 million to £27.1 million over the same period.
The company acknowledged that the third quarter was difficult for the division.
In a bid to create a more efficient and leaner operating model, Direct Line has proposed cutting 550 jobs as the company seeks to save £50m in 2025 and targets at least £100m in cost savings gross by the end of 2025.
Direct Line explained that it was in the early stages of a significant turnaround, but that third-quarter results did not yet reflect the decisions the company had made.
In the first nine months of the year, gross premiums increased by 5.5% to £3.13 billion, up from £2.96 billion the previous year, driven by growth of 11 .4% of car insurance, which increased from £1.59 billion to £1.76 billion.
Growth in non-motor insurance also contributed to this result, increasing 13% on the previous year from £688.9 million to £778.0 million.
Shares in Direct Line were up 0.2% at 165.58 pence on Monday morning in London.
The company said it continues to target 7% to 10% compound annual growth in gross written premiums and associated fees between 2023 and 2026 for non-auto insurance.
Managing director Adam Winslow said: “We have seen double-digit year-on-year premium growth in motor, home and direct commercial insurance. However, we are only in the early stages of a significant turnaround and our third quarter results do not yet fully reflect the actions we have taken.
“In the motor insurance sector, trading conditions have been difficult, although we have continued to increase the number of policies on price comparison websites and have worked at pace on the brand launch Direct Line in this channel.
“We are making good progress towards our gross cost reduction target, with around £50m expected in 2025 through improvements in procurement, streamlining technology and simplifying our operating model.
“I am pleased with the strategic and operational progress we are making across the company.
By Christopher Ward, Alliance News reporter
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