Direct Line accelerates the pace of Green Flag in the race against its rivals in rescues

Direct Line is planning to compete with the AA and RAC by creating hundreds of jobs at its Green Flag roadside rescue business.

The insurer will hire up to 350 new employees under plans to increase its fleet of patrol cars from 37 to 350 over the next few years.

Reviving Green Flag will be a key goal for chief executive Adam Winslow, who is trying to revive the struggling group with an ambitious turnaround strategy.

Green Flag is currently the third largest provider of breakdown cover in the UK, serving around two million customers.

But the sector is dominated by AA and RAC, which have more than 80 percent of the market between them.

Winslow took over at Direct Line in March, just days after the company received a £3.1bn takeover bid from Belgian rival Ageas. Winslow managed to beat Ageas to the punch, but was forced to come up with a new strategy for the company within weeks.

Winslow’s plan for Direct Line, revealed in detail this month, includes cutting costs by £100m by focusing on motor, home, commercial and rescue cover and exiting other sectors.

Direct Line policies will also be available on price comparison websites for the first time. The company, Winslow says, needs to focus on its current strengths, including home and car insurance.

Speaking to The Mail on Sunday, he said: “The scale of the opportunity for Green Flag is huge. At the moment, the AA and RAC dominate the market with 83 per cent between them.”

‘It is important to our business plan that Green Flag becomes a true ‘challenger brand’ by increasing the number of patrols, manned by our own trained technicians, and that we have the scale to be able to respond quickly no matter where a customer breaks down.’

By 2027, Green Flag hopes to make up to 40 percent of calls with its own patrols, up from 5 percent currently.

Green Flag was founded in 1971 as the National Breakdown Recovery Club by friends Bob Slicer and Jeffery Pittock in a Bradford pub. Rather than running its own fleet, like the AA and RAC, it offered the services of a network of garages and mechanics.

In 1999, Direct Line bought it for £220m. Winslow said investors had backed his plan, which came after years of struggling to boost sales of motor insurance policies.

Insurance magnate Sir Peter Wood set up Direct Line in 1985, when it was the UK’s first insurer to operate exclusively by phone. But it has failed to keep up with technology and doesn’t even have an app.

Direct Line had a tough year before Winslow joined. It lost £45m in 2022 after being hit by severe winter weather-related losses (such as burst pipes) and a fall in the value of its commercial property investments. This led it to scrap its final dividend. Within weeks of announcing the results, it parted ways with chief executive Penny James.

It was then forced to pay out £30m to customers who were overcharged for renewing their home and car insurance policies.

The company returned to profit in 2023.