Direct Line’s (DLG.L) boss landed a bumper payday in 2024 despite spiralling prices for customers and hundreds of job cuts, as he oversaw a sale of the company to insurance giant Aviva (AV.L).
Adam Winslow was given a £7.8 million pay package for last year as the company prepared for the takeover.
The executive joined struggling Direct Line in March 2024, having previously worked as Aviva’s UK and Ireland boss.
By the end of the year, the blockbuster £3.7 billion takeover by his old firm had been agreed, which will also see Aviva take over the Churchill and Green Flag brands when completed.
The tie-up will create a significant force in the motor insurance sector, estimated to cover more than a fifth of the total market.
Much of Mr Winslow’s pay deal was accounted for by a £5.8 million payment to cover the loss in earnings after joining from the rival insurer.
He was also handed a £1.2 million annual bonus and £683,000 in base salary.
Direct Line’s remuneration chairman Richard Ward wrote the company had “delivered” on targets that Mr Winslow set at a strategy day last July.
“Strong growth in our core product areas has driven improved trading performance, further supported by bringing Direct Line Motor on to price comparison websites for the first time,” he wrote.
He added the company had made “excellent progress on managing costs”.
Nonetheless, Mr Winslow’s pay packet comes despite rising costs for customers.
Average premiums – which refers to the amount customers pay for their insurance policy – jumped last year, after the company hiked prices to keep up with competitors in the market.
New motor insurance policies rose to £583 from £551 in 2023, while for existing customers the average jumped to £508 from £441.
Gross written premiums, meaning the total amount paid by customers who have an insurance policy, surged by a quarter year-on-year to £3.7 billion.
Mr Winslow said last week that inflation had driven up the cost of claims, particularly in the home and motor market where repair and replacement expenses have surged in recent years.
Insurers have faced the challenging task of balancing affordable premiums while keeping the business profitable, he said.
But the chief said the group’s turnaround strategy had “made a marked difference to the company’s performance” since being launched in July.
This has involved making significant cost savings in a bid to simplify the company, with it setting a target to shave up to £100 million off its yearly costs by the end of 2025.
This was partly being achieved through job reductions, with 550 roles being axed at the firm.
Mr Winslow said last week that Direct Line would make sure not to “take our foot off the accelerator when it comes to business change” as it prepares for the Aviva takeover.
