Direct Line boss James quits as another insurance firm counts the cost of the deep freeze

Direct Line said it was seeking a new chief executive following the resignation of Penny James.

James, who was also a director of the FTSE 250 company, will be leaving with immediate effect.

Jon Greenwood, who was Direct Line’s chief commercial officer, will step in as acting chief executive officer until a permanent replacement is found.

James joined the general insurance firm as chief financial officer in 2017 and became chief executive in May 2019.

She said it was a “privilege” to lead the Group and she is “proud of what the business has delivered for customers, where our technology transformation has seen improved digital capability in our core business areas, setting the group up for the future”.

James added: “I wish Jon and the team every success and have no doubt they will build on the underlying strengths of the business.”

Danuta Gray, chair of Direct Line, said James “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”.

Gray added she was “grateful” to Greenwood for stepping up.

Greenwood, she said, had a “deep understanding of the group”, having worked at Direct Line, formerly RBS Insurance, since 2000.

“The board and I will work closely with Jon as he focuses on our priorities of driving our performance and restoring balance sheet resilience, following the significant headwinds the business faced in recent months,” added Gray.

Shares in the British insurance company crashed by over a quarter in value earlier this month after it ditched its 2022 dividend on the back of a rise in house claims as a result of December’s deep freeze.

The sub-zero weather lasted for several weeks and led to burst pipes and water tanks, costing the firm £140m.

Earlier this week insurer Aviva said last December’s freezing weather meant it had to pay out £50m to policyholders claiming for damage caused by burst pipes and water tanks

Direct Line also announced new reinsurance arrangements, in hopes of strengthening its year-end 2022 solvency capital ratio by about 6 per cent, as well as restoring their capital position.