Direct Line has promised £100million of cost cuts and a new growth strategy as part of new chief executive Adam Winslow’s takeover defence against rival insurer Ageas.
Winslow, who joined from Aviva last month, said that Direct Line is carrying out a comprehensive strategy review and that it sees “significant opportunities” for higher returns. He said it will provide further details of his strategic overhaul in July.
In the interim, he said that he will act to slash Direct Line’s cost base by £100million by the end of next year and improve its pricing and claims performance. In particular, Winslow said that the Churchill owner will overhaul its garage network and take further action against claims fraud.
Direct Line has so far rebuffed two takeover offers from Ageas, its Belgian owned rival. The last offer was worth £3.1billion or 237p per share. Under City takeover rules, Ageas has until March 27 to either table a firm, funded offer for Direct Line or walk away for six months.
The insurer returned to the black with a pre-tax profit of £277.4million for 2023, versus the £301.8million loss it registered for the year prior. Direct Line only made a profit thanks to the £443.9million it made on the sale of its brokered commercial insurance business.
“The group has not always managed volatile market conditions successfully in recent years, particularly in motor,” Winslow said. “With the right strategy in place and determined actions, I am confident we can deliver.”
