Direct Line appoints Aviva’s Adam Winslow as chief executive

Receive free Direct Line Insurance Group PLC updates

we will send you myFT Daily Digest Email summary of the latest information Direct Line Insurance Group Ltd Every morning there is news.

British car insurer Direct Line has poached rival Aviva top executive Adam Winslow as its new chief executive as it seeks to recover from a string of profit warnings amid rising claims costs. recover.

The announcement comes a week before Direct Line releases its half-year earnings, which is seen as a key test of its progress. The FTSE 250 insurer said it had appointed Winslow as head of Aviva’s UK and Ireland general insurance business, effective early next year.

It’s been a tough year for Direct Line, which first issued a profit warning last summer as rising prices for auto parts and used cars, among other factors, pushed up payment costs. The company canceled its final dividend for the year as bad weather added pressure.

After Penny James resigned from the top job in January, the group admitted it had “understated inflation” and was overly optimistic about the extent of price rises needed to offset that pressure.

Direct Line reported last year that its continuing operations had a combined operating ratio of 105.8%, a key measure of underwriting profitability, which measures claims and expenses as a percentage of premiums. Any value above 100% represents a covered loss.

Aviva’s UK general insurance business reported a consolidated run rate of 96.1% in 2022, down from the previous year but remaining profitable.

With prices continuing to rise, the key question now for the group is whether it can get through this period without raising capital.

Analysts at RBC Capital Markets said Winslow’s appointment was a “really positive step forward in helping stock prices recover,” but added that “before any follow-on reforms are announced.” , and the long lead times before results start to materialize may mean that some patience is still required.” Still need to go from here”.

Winslow, who previously worked at US insurer AIG and is a non-executive director of Britain’s state-backed terrorism reinsurer Pool Re, praised Direct Line’s “rich heritage and passion for serving millions of customers”.

“I look forward to working with my new colleagues to drive growth, serve clients and create long-term shareholder value,” he said.

Direct Line said its acting chief executive, Jon Greenwood, had opted out of the CEO role. Its chair Danuta Gray said Winslow “distinguished himself for his strategic understanding of the industry, his outstanding record of leading high-performing businesses and his commitment to driving operational excellence to consistently meet client needs”.

Aviva said it has reassigned Jason Storah, chief executive of its Canadian operations, to fill the vacancy left by Winslow’s departure. Storah has almost 20 years experience with FTSE 100 insurance groups.