Direct Line Group announces further steps to deliver previously announced £100 million gross annual cost savings target

Direct Line Group has announced the next phase of its programme to achieve £100 million gross annual cost savings target by the end of 2014. The proposals mean that 236 roles are at risk across Commercial, Risk and Compliance and Chief Customer Office (CCO). This phase builds on the cost reduction announcements made in September and October, which included senior leadership roles.

As disclosed during the Group’s nine months to September 30, 2012 results, strong progress has been made on its cost savings target, with 50% of initiatives in respect of the £100m now announced. A further 20% will be achieved through a reduction in marketing spend and plans are being finalised for the remaining 30%.

The areas affected by this latest announcement include:

  • Commercial – restructure of the operating model of the regional underwriting business, which includes the creation of two new ‘underwriting centres’, which will help to increase and improve negotiation and trading skills, ensuring ongoing regional autonomy and broker support
  • Risk and Compliance – a reorganisation of the department to streamline processes, improve analytical and compliance capability
  • CCO – a reorganisation of Telephony Trading Operations and Business Services, which will create a new operating model, with centralised support and improved interaction across channels

While there are 236 roles impacted across all three areas, the Group is also reconfiguring the organisation to strengthen capability through a simpler, more efficient business. This will lead to the creation of a number of new roles.

Full consultation has begun with affected employees and their representative bodies and where possible, the impact of redundancy will continue to be mitigated through redeployment within the organisation, as well as opportunities with other potential employers. The Group will use its experience of successful redeployment to do its utmost to help affected staff to ensure they have the best advice and assistance in seeking new opportunities.

Paul Geddes, Chief Executive Office of Direct Line Group said:

“These proposals are another important step on our journey to deliver on our cost saving target. They are essential to ensure we are as efficient and competitive as possible. As always, I have not made these proposed changes lightly and understand the impact they will have on our people, and we will do all we can to support those affected.”

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