Adam Winslow is the new boss at Direct Line and he will be presenting some of his plans to turn around the troubled insurer. He must also fight off an Ageas takeover bid of £3.1 billion.
The former Aviva executive joined Direct Line just a week after the news broke of an unwanted takeover. Direct Line’s share price rose by about one third after the cash-and shares offer. The company was valued at 233p per share. It closed Friday at 223.7p.
Winslow will likely announce Direct Line’s financial results on March 21, indicating his ambitions to reduce costs and increase profitability.
Adam Winslow took over Direct Line only a week before, and now he has to strengthen its defenses
Investors will be watching to see if he can resume dividend payments, which were stopped in January 2023. This, combined with a profit warning led to Penny James’ departure. Jon Greenwood, a stand-in manager at the insurer for the last year, has led the company.
Winslow will have to examine the cost base, which is seen by many as higher than that of its competitors, and find ways to differentiate their brands, including the Direct Line, Churchill and Privilege which are sold through price comparison sites. It also owns Green Flag, a recovery service for motorists.
Analysts from investment bank Jefferies estimate that the bid price at 233p per share needs to be increased to between 270p-300p in order to have a better chance of being successful. The Belgian insurer is suggested to add £500 million on top of the £1.3 billion in cash. Ageas can make a new offer until March 27, six days after Direct Line results.
Direct Line has refused to comment.