Direct Line Insurance Group PLC (LSE:DLG) said chief executive Penny James has agreed with the insurer's board that she will step down with immediate effect, two weeks after a surprise profit warning.
With the process to identify and appoint a successor kicked off, the FTSE 250-listed company said Jon Greenwood, currently its chief commercial officer, has been appointed acting CEO.
The departure comes weeks after the company issued a shock profit warning and said it would not pay a dividend for 2022.
Analysts said the results went against a seemingly improving UK motor insurance market.
In a statement, Danuta Gray, chair of Direct Line, commented: "On behalf of the board, I would like to thank Penny James for her contribution, dedication and commitment to the company since joining to be CFO in late 2017 and subsequently as CEO from May 2019.
"During her time as CEO, Penny has overseen significant strategic progress, transforming the technology and capability across the business, accelerating the digitalisation of customer journeys and helping to set the company up for the future. She also 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."
James added: "It has been a privilege to lead Direct Line Group for nearly four years and to work with such an amazing group of colleagues. While the business was impacted by significant headwinds at the end of 2022, the group has continued to make strategic progress.
"I am 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. I wish Jon and the team every success and have no doubt they will build on the underlying strengths of the business."
On Thursday, Direct Line revealed that it has boosted its solvency capital ratio through strategic reinsurance agreements as it tries to recover ground after the profit warning earlier this month.
In a brief statement, the insurer said that its principal underwriter, UK Insurance Limited, has entered into strategic reinsurance agreements that together comprise a 3-year structured 10% quota share arrangement. The contracts start with effect from 1 January 2023 and are expected to increase the group's year-end 2022 solvency capital ratio by around 6 percentage points.
On January 11, Direct Line shares slumped after the firm revealed that a prolonged spell of severe cold weather in December had led to a “significant increase in claims”, which combined with further increases in motor inflation have had a significant impact on the underwriting result for 2022.
The cold weather is expected to result in claims of around £90mln, taking the annual total of weather claims to around £140mln, well above the company's expectation of £73mln, the company said.