Direct Line Plans to Pay 60% of Operating Earnings as Regular Dividend Under New Strategy

Direct Line Group has announced plans to pay out 60% of its operating earnings as a regular dividend, as part of a new strategy aimed at reviving the insurer’s fortunes. The company’s new CEO, Adam Winslow, revealed the refreshed strategy ahead of the annual general meeting, stating that Direct Line will soon launch its motor insurance brand on price comparison websites.

In addition to the dividend payout plan, Direct Line also intends to exit or stop investing in certain partnerships and businesses, focusing instead on home, commercial direct, and rescue services outside of motor insurance. Winslow emphasized the importance of putting the company’s strongest brand, Direct Line, on price comparison websites to reach more consumers.

The insurer, which was a potential takeover target earlier this year, reiterated its commitment to achieving at least £100 million in cost savings by 2025. Direct Line’s shares rose on the news, reflecting investor confidence in the company’s new direction.

Winslow expressed optimism about the future, stating that the company’s refreshed strategy will be executed by a new executive team with expertise in core markets. The goal is to grow the business and deliver strong returns for shareholders.

Overall, Direct Line’s announcement signals a significant shift in strategy and a renewed focus on sustainable growth and profitability in the insurance sector. Investors and industry observers will be closely watching to see how the company’s plans unfold in the coming months.