Dividend loss forces out Direct Line boss

THE boss of Direct Line has been ousted just weeks after the insurance group issued its latest profit warning and scrapped its dividend.

Direct Line said Penny James, who has led the company since 2019, had agreed with the board to step down as chief executive and director with immediate effect.

Jon Greenwood, currently chief commercial officer, will take over as acting chief executive.

Ms James had come under increasing pressure since Direct Line said it was scrapping its dividend earlier this month following a surge in claims due to the cold weather in December.

The company, which owns Churchill and Green Flag, had already issued profit warnings in July and November as it grappled with sharp inflation in motor claims.

It also warned of other costs including a decline in the value of its commercial property portfolio.

Direct Line this week unveiled new reinsurance agreements that it said strengthened the company’s balance sheet.

But this did not prevent Ms James becoming the first FTSE 350 chief executive to step down this year.

Ms James said: “It has been a privilege to lead Direct Line Group for nearly four years and to work with such amazing colleagues.”

Shares in Direct Line, which have tumbled more than 40pc over the last year, fell further following the announcement.

Danuta Gray, Direct Line chairman, said: “During her time as chief executive, Penny has overseen signifi- cant strategic progress, transforming the technology and capability across the business, accelerating the digitalisation of customer journeys and helping to set the company up for the future.

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