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Direct Line Group (UK)

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Direct Line Group is the UK's biggest personal lines insurer and the #2 general insurer behind Aviva. The main Direct Line business is supported by several other brands including Churchill and Green Flag. Direct Line revolutionised the insurance market when it launched in 1985, based on the simple premise that cover could be sold more cost-effectively by cutting out brokers and dealing direct with customers by phone. It was the first UK insurer to operate in this way, and successfully rolled out its service into several European markets. Until recently the group was a division of the Royal Bank of Scotland. In 2008 RBS said it was considering the sale of part or all of the group to raise funds. It eventually cancelled those plans in 2009 after failing to receive an acceptable offer for the business. However, EU regulators subsequently ruled that the disposal must go ahead regardless. RBS floated an initial stake in the business towards the end of 2012, and sold its remaining shares over the course of the following two years.


Click here for a listing of Agency Account Assignments from Adbrands.net. The group declared marketing expenses of £118m in 2015.


See Financial & Insurance Index for competitive companies. The group's main rivals in direct insurance are Admiral and Esure Group, controlled and run by Direct Line's original founder Peter Wood. Others include Aviva and Zurich in general insurance, as well as More Th>n in the motor sector.

Brands & Activities

Direct Line Group manages a portfolio of several of the UK's best-known and most trusted insurance brands, and also provides private label insurance services to a wide range of other businesses. Its greatest strength is in motor-related services, despite strong competition from rival suppliers, but it is also the #2 in home insurance, and has begun to establish a presence in life cover.

The group offers a full range of insurance services including home, motor, travel and pet cover. It is the UK's #2 general insurer (after Aviva), and #1 in motor insurance. Direct Line and Churchill are respectively the UK's #1 and #2 motor insurance brands, marketed direct to consumers via telephone or the internet. Privilege is a third consumer-oriented service. The brands are broadly similar in stance, but Direct Line only deals with customers direct, and not through brokers or price comparison websites (such as GoCompare or MoneySupermarket). Churchill deals with all three channels, while Privilege is now marketed mainly through price comparison sites.

The only real difference in other respects is in their marketing. Direct Line established its reputation with an animated telephone brand mascot voiced by Stephen Fry. That character was dropped in 2011 in favour of comedy ads with Alexander Armstrong and Chris Addison. A change of agency in 2014 from longtime incumbent M&C Saatchi to Saatchi & Saatchi led to another new approach. The new campaign resurrected the character of "fixer" Winston Wolf, played by Harvey Keitel, from Quentin Tarantino's Pulp Fiction movie.

Churchill continues to use its eponymous Yorkshire-accented "noddy dog" brand mascot. It was originally partnered in its advertising by comic actor Martin Clunes. However, following his driving disqualification for speeding offences, he was replaced for two years by comedienne Dawn French, and then by a series of animated objects. Privilege was in the past been promoted by "upper class" character actors such as Nigel Havers and Joanna Lumley, but now rarely advertises. The group also offers customised private label insurance for brand partners including Sainsbury's Bank, RBS/NatWest, Nationwide and Prudential, as well as commercial insurance for SME businesses under the NIG brand.

The group also runs Green Flag / Direct Line Rescue, the #3 roadside breakdown service in the UK (behind The AA and RAC). It acquired stolen vehicle recovery service Tracker in 2005, also established its own crash repair centre towards the end of the year.

At the end of 2015, the group had around 3.7m motor policies in-force, and 3.4m home policies.

The business was a subsidiary of Royal Bank of Scotland for 25 years from 1988 to 2013. As a result of the financial troubles which began to engulf RBS from 2008 onwards, the bank said it was considering the sale of part or all of the group to raise funding. However, the gathering storm of that year's credit crisis forced many initially interested buyers to withdraw from negotiations, and RBS eventually cancelled those plans in 2009 after it was itself rescued from financial collapse by government funding. However, EU regulators subsequently ruled that the disposal must go ahead regardless to reduce RBS's share of this and other financial sectors. Previously known as RBS Insurance, the business rebranded as Direct Line Group at the beginning of 2012. An initial 30% stake was floated in Autumn 2012. Two further sales reduced RBS's holding to 28.5% in September 2013 and the remaining shares were placed with investors in Feb 2014.

Under RBS ownership, Direct Line successfully rolled out its service into other countries during the 2000s, though these operations have all now been divested. Linea Directa was originally a joint venture with Bankinter of Spain. It is that country's largest direct motor insurer. RBS sold its share in 2009. The group also established insurance operations in Germany and Italy as a result of the purchase of Allstate Europe. In Italy the group also acquired the direct operations of Royal & Sun Alliance in 2002, making it that country's largest direct insurer. However, in Autumn 2014, Direct Line announced plans to sell its operations in Italy and Germany to European insurer Mapfre for around £430m. That deal was completed during 2015.


For 2013, its first full year as a standalone entity, Direct Line Group reported gross written premiums of £3.83bn, and net earned premiums of £3.52bn, down 5%. However pretax profits jumped 70% to £424m. Direct Line Group managed almost 3.8m motor insurance policies as of that year, roughly equivalent to 14% overall share. Combined premiums were £1.42bn. Home insurance contributed a further £940m from 3.7m policies. Roadside assistance, pet insurance and other types of cover contributed a further £383m.

Topline has reduced in recent years, reflecting the disposal of international operations. For 2015, gross earned premiums were £3.11bn. Total income including investments slipped 2% to £3.27bn. Motor insurance accounted for 45% of written premiums by value, home for 28%, commercial insurance for 16% and roadside assistance and other personal lines insurance for the balance. Lower claims and expenses resulted in an 11% increase in pretax profit to £508m. Additional profits from discontinued operations in Italy and Germany gave a net after-tax profit of £580m.


Direct Line was launched in 1985 by a group of businessmen led by chief executive Peter Wood, with investment backing from Royal Bank of Scotland. The idea behind the business was to undercut brokers by offering motor insurance direct to customers by phone, then a revolutionary concept. The motor business was enormously successful, inspiring a number of competitors. Direct Line's intensive marketing campaign quickly established the company's phone-on-wheels logo, and in 1988 the company launched a similar service for home insurance. Over 80,000 policies were taken out during the first year. That same year, RBS acquired full control of the business, buying out Peter Wood's shareholding. (Wood remained with the business until 1997, then dabbled in other areas before launching rival service Esure with backing from what was then HBOS).

Gradually Direct Line began to expand its operations to other financial services. In 1993, a first non-insurance product, the Direct Line Personal Loan, was launched to existing customers. This was followed by a varied range of other products, including mortgages in 1994, life insurance (under the name Direct Line Life) in 1995, savings and entry-level investment accounts in 1996, travel insurance in 1996 and pet insurance in 1997. It also launched Linea Directa, a joint venture motor insurance company in Spain, and opened a series of industrial-scale car accident repair centres. Direct Line Financial Services moved into profit for the first time in 1998, after start-up losses.

Also that year, the group added a new service, Direct Line Rescue, a motoring breakdown and recovery services in direct competition with the AA, RAC and Green Flag. The move was successful, with Direct Line taking advantage of dissatisfaction among RAC members following that organisation's planned acquisition by US group Cendant, already owners of Green Flag, the #3 roadside services association, originally launched in 1971 as National Breakdown Service. The company claimed to have sold 94,000 breakdown policies in its first nine months of operation, many of them to former RAC or AA members. However Cendant's acquisition of RAC was eventually blocked by regulators, and the US group set about selling off Green Flag as well in 1999. It was eventually acquired by Direct Line for £220m.

In 1999, Direct Line absorbed the business of another RBS subsidiary Privilege Insurance. It also signed a deal with Japanese life insurance group Yasuda Mutual to launch a car insurance company in Japan (subsequently acquired by Yasuda). Direct Line added a further business to the portfolio in 2000 with the launch of jamjar.com, an online business selling cars at 30% below manufacturers' prices. This was initially a joint venture with auto retail group Dixons Motors, until Direct Line acquired full control of the business. In 2001, the group bought out the German and Italian insurance operations of US insurance group AllState. The purchase of Royal & Sun Alliance's Italian business in early 2002 made Direct Line Italy's second largest direct insurer.

In 2003, RBS paid £1.1bn to acquire rival insurance broker Churchill from banking group Credit Suisse. Churchill had originally been established by Swiss insurance group Winterthur in 1989 as a direct competitor to Direct Line. Like Direct Line it specialized in selling car insurance policies over the telephone. The company expanded into home insurance in 1990, and subsequently boosted its operations with the acquisition of a string of smaller brokers including Anglia Countrywide and Devitt. Winterthur was itself acquired by Credit Suisse in 1997, but set about divesting non-core operations in 2002. The Direct Line and Churchill brands were combined under the RBS Insurance umbrella in 2003.

Last full revision 13th January 2016

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