Direct Line has announced plans to cut 550 jobs after losing nearly 500,000 customers due to increased premiums.
The Churchill owner, which revealed in July that it would join price comparison websites for the first time, reported that gross premiums in its motor insurance division dropped by more than half in the third quarter, falling to £426.2 million compared to the previous quarter.
Total premiums reached £835.9 million for the three months ending in September, down 34% from the same period last year and 40% lower than the second quarter of this year.
In September, Direct Line disclosed it had lost 488,000 motor customers after raising insurance costs by as much as 31%.
The company stated it would cut around 550 jobs as part of a cost-saving initiative targeting £50 million in savings, with a goal to reduce costs by £100 million by the end of next year.
Chief Executive Adam Winslow commented: “We are at the beginning of a major turnaround, and our Q3 results do not yet fully reflect the actions we’ve taken.
“In motor insurance, trading conditions have been tough, but we’ve continued to grow policy counts through price comparison websites and have quickly launched the Direct Line brand on these platforms.
“We are making solid progress towards our gross cost savings target, expecting around £50 million in savings by 2025 through better procurement, technology streamlining, and simplifying our operating model.”
Winslow did not rule out additional job cuts, indicating that the company will closely monitor hiring, vacancies, and role replacements as part of its cost-saving strategy.
He added that Direct Line would need to “work very hard” to counterbalance extra expenses arising from Labour’s proposed increase in employer national insurance contributions.
