Reinsurance News

Direct Line Group CEO to step down

27th January 2023 - Author: Kane Wells

Direct Line Insurance Group has announced that Penny James has agreed with the Board to step down as Chief Executive Officer and Director with immediate effect.

Direct Line Group LogoThe firm states that the Board is initiating a process to appoint a successor, noting that until that process is complete, Jon Greenwood, currently Chief Commercial Officer, has been appointed Acting Chief Executive Officer, and is to join the Board.

Danuta Gray, Chair of Direct Line Group, commented, “On behalf of the Board, I would like to thank Penny James for her contribution, dedication and commitment to the company since joining to be CFO in late 2017 and subsequently as CEO from May 2019.

“She also deserves great credit for the way she led the business through the pandemic, in a very challenging market, ensuring that we continued to serve our customers.”

James added, “It has been a privilege to lead Direct Line Group for nearly four years and to work with such an amazing group of colleagues.

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I wish Jon and the team every success and have no doubt they will build on the underlying strengths of the business.”

Direct Line recently disclosed that it had executed a strategic reinsurance arrangement via the firm’s principal underwriter, UK Insurance Limited.

Together, Direct Line said that the arrangement comprises a 3-year structured 10% quota share treaty.

This news comes following Direct Line confirming earlier this month that it would cancel its final dividend for 2022, as total weather claims for the year were estimated at nearly twice its original expectations.

The company currently anticipates to pay claims worth around £90 million due to freezing temperatures in December that resulted in burst pipes and other related damage.

Combined with another freeze event from January 2022 and subsidence related claims over the summer, this means that Direct Line’s total weather claims for the year will be in the region of £140 million, which is well above its 2022 expectation of £73 million.

Further, analysts at Berenberg recently released a report suggesting that they aren’t convinced Direct Line’s quota share arrangement will fix all of its problems.

The analysts wrote, “this deal is relatively minor and does not fix the group’s underlying issues or sufficiently address its thin capital buffer. However, it does fit the narrative of the company continuing to muddle through this turbulent time.”

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