Direct Line Insurance Group PLC on Monday said it will be cutting 550 jobs as it reported a decline in third-quarter gross premiums.

The London-based car and home insurer reported a 35% decline in gross written premiums and associated fees to £835.9 million from £1.28 billion the previous year. On-quarter this figure was down by 40% from £1.40 billion.

Divisionally, the FTSE 250-listed firm’s Motor arm was one of the worst performers on-year, down 48% to £426.2 million from £826.8 million the previous year, with partnerships in the segment declining from £391.7 million to £27.1 million over the same period.

The firm acknowledged that trading in the third-quarter had been challenging for the division.

In a bid to create a more efficient, leaner operating model Direct Line has proposed cutting 550 jobs, with the business looking to save £50 million in 2025 and targeting at least £100 million in gross cost savings by the end of 2025.

Direct Line explained that it was in the preliminary stages of a significant turnaround but with third-quarter trading not yet reflective of the decisions made by the firm.

In the first nine months of the year, gross premiums grew 5.5% to £3.13 billion from the £2.96 billion the previous year, with this supported by 11.4% growth in Motor to £1.76 billion from £1.59 billion.

Growth in Non-Motor also contributed, rising 13% on-year to £778.0 million from £688.9 million.

Direct Line shares were up 0.2% at 165.58 pence on Monday morning in London.

The firm said it continues to target 7%-10% compound annual growth in gross written premium and associated fees between 2023 and 2026 in Non-Motor.

Chief Executive Adam Winslow said: ‘We delivered double-digit premium growth year-on-year in Motor, Home and Commercial Direct. However, 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.

‘In Motor, trading conditions have been challenging, although we continued to grow policy count on price comparison websites and have worked at pace on the launch of the Direct Line brand in this channel.

‘We are making good progress against our gross cost savings target, with around £50 million expected to be delivered in 2025 from improvements in procurement, technology rationalisation and simplifying our operating model.

‘I’m pleased with the strategic and operational progress we are making across the business.’

Copyright 2024 Alliance News Ltd. All Rights Reserved