Direct Line shares sink after further redundancies are announced

<p>Direct Line’s shares have plunged after the insurance firm announced more redundancies.</p>

Direct Line's share price has stumbled on the London Stock Exchange this afternoon (October 29th) after the insurer announced its second round of redundancies in as many weeks.

The company – which was recently spun out of Royal Bank of Scotland to become an entity in its own right – has decided to eliminate the positions currently held by chief operating officer Jonathan Davidson and Sheree Howard, who has been heading the insurer's drive to meet Solvency II requirements.

This is on top of the 900 losses announced in September, but chief executive Paul Geddes said the decision to cut these positions was not made lightly.

Direct Line's latest set of results shows it is targeting a 15 per cent return on equity as its own business and it is planning to do this by reducing administration expenditure and improving its marketing efficiency.

"We are creating a simpler more efficient business which costs less to run," Mr Geddes stated.

At 16:20 GMT, Direct Line shares were down by 1.1 per cent to 190.25p.

Find the latest spread betting strategies for the FTSE 100 at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.