– Direct Line Insurance Group’s chief executive of nearly four years, Penny James, will step down with immediate effect after the British motor and home insurer faced “significant headwinds” in recent months, the company said on Friday.
James, who joined Direct Line as finance chief in late 2017, took over as CEO in May 2019 and steered the company through the COVID-19 pandemic, when motor insurers performed well as restrictions limited the number of drivers on the road, leading to fewer accidents.
But the company has hit a rough patch resulting in an unexpected dividend cut, a sharp fall in its shares and the threat of a possible credit rating downgrade.
The appointment of a new CEO will allow the company to “reset and rebuild” after a “tumultuous time”, JPMorgan analysts wrote in a note.
The company appointed Chief Commercial Officer Jon Greenwood as acting CEO, with Chair Danuta Gray saying Greenwood would focus on driving performance and restoring the balance sheet.
A company spokesperson could not give a time frame for a decision on a successor but said the search would include internal and external candidates.
The company unexpectedly scrapped its final dividend payout this month and forecast an annual underwriting loss after inflationary pressures and supply chain snags resulting from the pandemic and Ukraine war pushed up the cost of motor repairs.
Spells of extreme weather in Britain over the past year have also led to more claims for subsidence and burst pipes.