Direct Line Insurance Group has announced that Penny James will step down as chief executive and as a director with immediate effect.
The board is initiating a process to identify and appoint a successor, but until that process is complete, chief commercial officer Jon Greenwood has been appointed acting chief executive, and is to join the board.
Danuta Gray, chair of the insurance company - which was previously part of RBS Group - said: “On behalf of the board, I would like to thank Penny James for her contribution, dedication and commitment to the company since joining to be CFO in late 2017 and subsequently as CEO from May 2019.
“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.“
The statement added that Greenwood will now focus on the priority of driving our performance and restoring balance sheet resilience, “following the significant headwinds the business faced in recent months“.
Yesterday, Direct Line announced new strategic reinsurance arrangements, which are expected to increase the group’s year-end 2022 solvency capital ratio by around 6%, with the company noting that it will continue to focus on rebuilding its capital position.
James commented: “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.”
A profit warning earlier this month sent Direct Line’s shares to a 10-year low, with a cancelled dividend payment coming on top of an already announced £100m share buyback.
The group also revealed a rise in the cost of motor insurance claims, due to rising prices of second-hand cars and longer repair times, with spare parts also more expensive and harder to find.
There was also a rise in weather-related home insurance payouts from the December cold snap, with 3,000 claims for burst pipes and similar problems contributing to £90m in costs from the pre-Christmas freeze alone. That meant it almost doubled its estimate for weather claims for 2022 to £140m.
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