It’s a mixed picture for Direct Line as they publish their Q3 results. Down in the release there is a qick mention of 550 jobs going and you wonder how the Reeves NI Budget changes will affect many big brands who employ people – often thousands of them – in UK call centres, or in hybrid home/office models.
The lowering of the Employers NI threshold is perhaps the biggest percentage tax on mainstream 20-40K per annum jobs in three decades. Pension changes rumoured to be in the pipeline may also bump up costs for employers.
Interesting times ahead as insurers inevitably push up premiums next year. Here’s the word from Direct Line;
“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 Q3 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 (“PCW”) 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. I’m delighted that Jane Poole recently joined as CFO and is already focused on reviewing our financial strategies, policies and controls. In total we have hired eight2 new Executive leadership team members, six of whom have already started. This reinforced and refreshed team will help us unlock the potential of DLG and deliver the strategy we set out at the Capital Markets Day in July.
“We believe the steps we are taking will position the company for enhanced profitability and growth as we build on our strong foundations to become the customers’ insurer of choice.”
Operational and strategic update: Early progress towards our targets
- Motor: Product build for launch of Direct Line on PCW is well developed and a PCW launch partner has been selected.
- Home: Further progress made with re-platforming which brings new capability and supports simplification. Privilege is live on four leading PCWs and Churchill is live on the largest.
- Rescue: Green Flag recently signed two new contracts, including a collaboration with Apple, becoming the only UK breakdown brand to offer rescue services as part of Apple’s roadside assistance via satellite.
- Cost saving programme: 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.
Be the first to comment