The chief executive of Direct Line has stepped down, two weeks after the company issued a fresh profit warning and scrapped its dividend.
The insurance group said on Friday that Penny James would leave immediately and that Jon Greenwood, the chief commercial officer, would become acting chief executive.
“It has been a privilege to lead Direct Line Group for nearly four years,” said James. “While the business was impacted by significant headwinds at the end of 2022, the group has continued to make strategic progress.”
Earlier this month, Direct Line said a spell of severe cold weather in December had pushed up the cost of home claims, compounded by further inflation in motor claims, sending shares in the company down more than a quarter.
Direct Line’s chair Danuta Gray thanked James for her service since joining as chief financial officer in 2017, and getting the top job two years later. Gray said the board would work closely with the interim chief executive “as he focuses on our priorities of driving our performance and restoring balance sheet resilience, following the significant headwinds the business faced in recent months”.
Pressure has built on James as spiralling inflation in used car prices and other costs pushed up the size of its payouts, forcing Direct Line to issue a profit warning in July.
After the surprise move to scrap the dividend earlier this month, Citi analysts said the news tested “management credibility” following reassurances the market had been given as recently as November.
Earlier this week, rival Aviva announced that its own general insurance business was trading in line with expectations. Aviva’s shares rose, and Direct Line’s fell, as investors digested the news.
James is the second chief executive in the sector to step down in two days. French reinsurer Scor announced on Thursday afternoon that Laurent Rosseau, who took the top job in mid-2021, had resigned.
The reinsurer’s share price has fallen by a fifth over the past year, as natural catastrophes and claims inflation weighed on the group. He has been replaced by Thierry Léger, former chief underwriting officer at rival Swiss Re.
Scor’s shares were down 5 per cent in early trading on Friday, while Direct Line stock lost 1 per cent.
