Direct Line to put its flagship brand on price comparison sites for the first time

Direct Line to put its flagship brand on price comparison sites for the first time

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Direct Line, one of the UK’s biggest car insurers, is to bring its signature brand, which it has kept at bay for decades, to price comparison sites for the first time in a bid to build a direct relationship with its customers.

“We have rigorously examined our business and listened carefully to investors, customers and employees” about where it should go, Chief Executive Adam Winslow said as he launched his first strategy review on Wednesday.

The group said it would focus on its vehicle, home and commercial insurance lines and breakdown services, and would cease or exit investments in other areas such as pet and travel insurance.

Direct Line has been trying to rebuild its valuation after surviving a takeover attempt by Belgian rival Ageas earlier this year. The group said it planned to continue paying regular dividends, paying out around 60% of post-tax operating earnings, without giving the exact timing.

Some of the insurer’s brands, such as Privilege and Churchill, already feature on price comparison sites, but the move to put its core Direct Line brand on these sites – where 90% of Winslow’s consumers shop – is a significant shift for the company. Direct Line disrupted the insurance market when it launched in 1985 by cutting out brokers and going direct to customers.

The company said earlier this year that its motor insurance operations had “turned a corner” after a post-pandemic rise in claims costs led to a series of profit warnings and the resignation of its chief executive.

The group later admitted it had failed to respond with sufficient price increases to reflect this inflation and had raised premiums to repair its underwriting book, but it still reported an operating loss of £190m last year as policies written at lower prices continued to seep into its earnings.

Winslow set a new target of £100m annual cost savings in areas such as marketing in its full-year results in March.

Ageas decided the same month that it would not pursue the takeover bid, saying it could not justify a significant upgrade to its second preliminary cash and stock offer.

Citi analysts said the “increasing news today is negative”, citing an expected decline in revenue from exiting businesses and other factors.

Jefferies said near-term dividends would be “lower than expected” under the new policy but the payout should exceed its forecasts by 2026.

Direct Line’s shares were steady at 193p in early trading on Wednesday, still well below Ageas’ second offer of 237p per share, which valued the motor insurer at £3.2bn.