FTSE 250 insurer Direct Line Insurance Group PLC (GB:DLG) announced the appointment of Adam Winslow as its new CEO, taking the helm of the company. Winslow is set to undergo a transition from his role at the rival firm Aviva PLC (GB:AV).
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Winslow will replace Penny James, who departed from the company in January following a profit warning that prompted the suspension of its dividend payout and the cancellation of a portion of a share buyback. The role of acting CEO was taken up by Jon Greenwood, who serves as the Chief Commercial Officer.
The Direct Line share price has been trading up by 1.41% at the time of writing following the announcement.
The Positive Change
Winslow will take charge of Direct Line Group during the first quarter of 2024 and is presently heading the general insurance business in the UK and Ireland at Aviva. Prior to this, he spent eight years at AIG in multiple roles. At Direct Line, he will receive an annual salary of £820k prior to any bonuses, along with a pension allowance of 9%.
The news comes at a time when the company is preparing to announce its half-year earnings for 2023 next week, on September 7. Following a substantial decline in its profits during 2022 and a less favorable outlook for 2023, the company is optimistic about its long-term prospects. It believes Winslow’s exceptional track record of steering high-performing businesses and achieving operational excellence will help the company navigate this time smoothly.
Analyst Derald Goh from RBS Capital welcomed the news and stated that the new appointment was a “tangible positive step forward in aiding the share’s recovery.” He also added that investors need a certain level of patience before they can see any material changes. Seven days ago, Goh assigned a Hold rating to the stock, predicting a modest growth of 4% in the share price.
Are Direct Line Shares a Good Buy?
The Direct Line share price has been hit hard in 2023 and has lost 28% YTD. After witnessing a tough 2022, the company is looking forward to rebounding from a series of profit warnings amidst the escalating inflation in claims costs.
Overall, analysts have a cautious outlook on DLG stock, which has received a Hold rating from TipRanks’ consensus. It is based on one Buy, four Hold, and one Sell recommendations. The Direct Line share price forecast is 168p, which is almost similar to the current trading level and offers growth of a mere 3.3%.
