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.

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