Company organization
By 1992, the number employed by Direct Line had grown to 1086
people in its four regional centres, up from 787 in 1991. These centres
were based in Croydon, Glasgow, Manchester and most recently
Birmingham. Very roughly, there were around 520 in telesales
and 330 involved in teleclaims. The company employed 47 in-house
engineers and these evaluated 90 per cent of claims on motor business
rather than using loss adjusters, as was normal in the industry. Household
claims were evaluated by loss adjusters but Direct Line used its own engi-
neers to conduct security surveys on high value properties. There were
some 130 employees engaged in information processing, with around
40 of these being involved in systems development. In addition,
some systems work was subcontracted out. Of the remainder, 40 employ-
ees were engaged in accounts, 7 analysing underwriting and 3 were
involved in marketing. While premium income had soared in recent years
the number of employees had grown at approximately half this rate. The
company was still led by Peter Wood, who had originally conceived the
idea of Direct Line. He was ably assisted by a small executive team many
of whom had been with the company since its conception. In 1992, Mr
Wood became the highest paid executive in the UK when he received a
bonus of some £6 million for Direct Line’s performance in the past finan-
cial year. This sum was based on a formula developed when the Royal
Bank of Scotland bought out Mr Wood’s original 25 per cent of Direct
Line’s equity.
Future prospects
Mr Wood, commenting upon the future prospects of Direct Line,
stated,
Despite its short history Direct Line has already claimed a position among
the UK’s leading personal lines insurers. During the 1990s many of our com-
petitors suffered losses, in some cases substantial; some of them have
responded with increases in premium rates on both their private motor and
household buildings’ accounts.
We are aware of the problems facing the general insurer ... However, our
underwriting success of the past year and the continued development of our
infrastructure have put us in a strong position for the future and we consider
that such an environment presents Direct Line with the opportunity to grow
both its motor and its household accounts.
This we plan to do, at the same time continuing to give our policy holders
maximum value through the tried and tested combination of low costs andThe customer market domain: Managing relationships with buyers 125