Direct Line cuts 2,000 more jobs to save costs

Direct Line has announced plans to cut 2,000 jobs to trim costs and boost profits in a competitive and sluggish market.

07:03 27 June 2013

In an effort to save about $200 million every year by 2014, Britain’s Direct Line Insurance Group Plc, has announced its plan to cut 2,000 jobs to trim costs.

The company, which is Britain’s biggest car insurer, has been proactive in protecting itself from competition. It has been cutting jobs and avoiding high-risk drivers since 2010.

Direct Line isn’t the only insurance company to cut jobs. Other insurers, which include AXA, Aviva, and Standard Life, have cut their workforce in recent months to reduce cost and prepare for new regulations that include higher capital requirements.

Analysts, which include Marcus Barnard from Oriel Securities, were not shocked with the news. He said: "It wouldn't surprise me if there'd be more (cuts) from Direct Line, but they'll probably do at most one of these a year.”

Direct line offers home, travel, and pet insurance. Since its October 2012 float, the company’s share have increased by 17per cent. Today, its market value is about 3.29 billion pounds.