Direct Line is contemplating the elimination of approximately 550 positions as it grapples with "challenging" market conditions.
The insurance broker aims to achieve around £50m in cost savings by 2025, attributing the expected efficiencies to enhancements in procurement, technology consolidation, and streamlining its business model, as reported by .
"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," the company announced.
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This news was shared in conjunction with the firm's third-quarter trading update.
In the three months leading up to September, gross written premiums and related fees dropped to £705m, a significant decrease from the £1.1bn reported in the corresponding period last year. The motor insurance sector saw an especially sharp decline, with premiums nearly halving.
"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," said Adam Winslow, CEO of Direct Line.
"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," he further commented.
Despite the downturn experienced in the third quarter, Direct Line has upheld its medium-term trading objectives. In the first nine months of the year, the company has registered close to a 12 per cent increase in premiums.
The company is setting its sights on a compound annual growth rate of 7-10 per cent in gross written premiums between 2023 and 2026. It has set a goal for a net insurance margin target of 13 per cent in 2026.