The main losses will be from its Ipswich office which is closing in 2022
Direct Line Insurance Group is cutting 800 jobs, it announced today.
The main site affected will be the company’s Ipswich office, which employs 300 people in the motor operations team, the company told Insurance Times.
And 500 jobs across all other sites, but all these job are customer facing.
“Like many companies we are having to prepare for changes in the way we operate reflecting changing customer behaviour where people are increasingly opting to interact with us digitally,” the company said in a statement.
”We are therefore proposing a number of changes across the business which sadly mean the loss of jobs for some of our people.
“These decisions are always really difficult, we take the wellbeing of our people very seriously and have given people as much time as possible to prepare.
”We will be working with our Employee Representative Body to make sure people are well supported through the process including helping them to find alternative employment by working with local organisations and providing CV and interview training.”
The company employs 11,000 people across its sites, so the cuts would represent 7% of its workforce.
In its third quarter earnings call in November chief executive Penny James announced a £60m cost-saving plan, with roll-outs of new technology expected to reduce capital expenditure to less than £100m for the year ending December 2021.
This year also sees the direct insurer rolling out new technology platforms as it seeks to streamline the way in which it interacts with customers.
Direct Line also owns Churchill Insurance and Green Flag brands. It was part of the taxpayer-backed Royal Bank of Scotland until its taxpayer bailout in 2008 is seeking to adjust to consumers growing demand for digitally led services from traditional insurers.
The company is facing market headwinds, including greater regulatory scrutiny of the way the industry charges loyal customers, and the calculation of personal injury claims.
The groups’ share price was down over 1% but recovered later in the day.
Not unexpected
Oxbow Partners head of market intelligence Paul De’Ath commented that ”while any news of job losses within the industry should not be taken lightly, this outcome is not unexpected.
”Customers are increasingly happy to self-service their policies, reducing the need for human interaction. We expect this trend to also impact other personal lines insurers over the coming years.
He added that Direct Line has also ”spent a large amount of time and money on implementing guidewire and launching new customer service systems over the last few years”.
”One of the key benefits from this should be greater efficiency in customer operations. With the group not searching for significant organic growth in customer numbers, some of the efficiency gains were always likely to come from reducing headcount, in our view.”
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