Direct Line to axe 900 jobs to boost profits

By MARTIN FLANAGAN
Published on 06/09/2012 00:12

DIRECT Line Group, the Royal Bank of Scotland (RBS) insurance subsidiary that is set to float on the stock market next month, yesterday unveiled plans to axe nearly 900 jobs to help boost future profits.

Direct Line revealed that about 500 jobs would go when it closes its call centre in Teesside. The group said a further 400 workers would be made redundant across 15 other UK sites, which will include cost savings at its head office at Bromley in Kent.

The insurer refused to say which other sites would be hit by redundancies. The company employs about 1,000 in Glasgow, while its other main locations include Doncaster, Leeds, Manchester and Watford.

The firm is closing the Teesside centre because efficiencies will mean “significantly fewer consultants are needed to handle calls”.

The group – whose brands include Churchill and Green Flag as well as the eponymous Direct Line – said last month that it was seeking to save £100 million by cutting administration overheads and making marketing efficiencies by the end of 2014. The insurer made a profit of £454m in 2011 after a loss of £295m in 2010.

City analysts have forecast that Direct Line Group could attract a stock market valuation of £3 billion, making it London’s biggest listings since Standard Life floated in 2006.

RBS was ordered by the European Commission to sell its insurance business in return for the bank’s £45bn taxpayer bailout in 2008 that has left 82 per cent of its shares owned by the UK government.