Leaving: Direct Line CEO Penny James
Penny James has stepped down as chief executive of Direct Line with immediate effect, weeks after the insurer axed its dividend following a surge in claims.
The FTSE 250 company has appointed chief commercial officer Jon Greenwood as acting chief executive while the board seeks a replacement.
Chair Danuta Gray said the board would work closely with Greenwood to restore ‘balance sheet resilience following the significant headwinds the business faced in recent months’.
James, 53, joined Direct Line in late 2017 as chief financial officer and became chief executive in May 2019.
Under her tenure, which included the pandemic period, Direct Line shares have shed around 50 per cent.
This includes a plunge of nearly a quarter earlier this month after the insurance group revealed it no longer expected to dish out a final dividend to shareholders for 2022 and issued a profit warning, forecasting a full-year loss.
The group said rising inflation was pushing up the cost of claims, while the fallout from the December cold snap also had an impact.
It expects the bill to total £90million – taking ‘bad weather claims’ for the whole of 2022 to £140million once the cold snap at the start of last year and the heatwave over the summer are taken into account.
That is far higher than Direct Line’s previous forecast of £73million.
James said today: ‘It has been a privilege to lead Direct Line Group for nearly four years and to work with such an amazing group of colleagues.
‘While the business was impacted by significant headwinds at the end of 2022, the Group has continued to make strategic progress.’
Direct Line shares were down 0.1 per cent to 178.6p in morning trade on Friday.
Gray said: ‘During her time as CEO, Penny has overseen significant 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 challenging market, ensuring that we continued to serve our customers.’
James’ departure comes a day after the company announced new strategic reinsurance agreements, which it said are expected to increase the group’s year-end 2022 solvency capital ratio by around 6 percentage points.
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