Superbrands case studies: Direct Line

Originally published in 'Consumer Superbrands Volume V', March 2003. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.

Case study provided by Superbrands.


There are 35 million private motorists in the UK, all of whom are legally obliged to insure themselves and their cars as well as other people against injury and damage. Most motorists prefer the security of comprehensive cover, rather than a basic Fire and Theft policy. A total of £8 billion is spent annually in the UK on motor insurance with 40% of drivers opting for comprehensive insurance policies (Source: Mintel 2002).

The price war of the 1990s within the industry helped to push premiums down for many motorists but resulted in a battle for supremacy among the growing number of companies in an overcrowded market.

The introduction of direct selling, which cut out the middleman, helped to change the face of the insurance market. Growing use of the internet -- by 1999 there were an estimated 12.3 million internet users (Source: National Opinion Poll 1999) -- added to changes in the structure of the market.

The approach to selling insurance over the telephone was pioneered by Direct Line. The simplicity of its selling methods modernised the world of motor insurance and revolutionised the insurance market across all sectors from motor to home insurance, pet cover to life assurance. It also raised the expectations of millions of consumers in terms of value for money and customer service.

Today, Direct Line is the UKs leading direct motor insurer and the sixth largest home insurer. The Direct Line Group operates in five geographical territories -- the UK, Spain, Italy, Germany and Japan -- it employs over 10,000 people and has over ten million policyholders. In 2001, it reported record pre-tax profits of £261 million an increase of 30% on the previous year.


Direct Line is renowned for having transformed financial services in the UK following its arrival in the motor insurance market in 1985.

By dealing direct with consumers over the telephone and using sophisticated computer technology to streamline processes, it was able to pass the resulting cost and efficiency benefits on to consumers in the form of cheaper premiums and faster service, delivered at a time to suit customer needs.

Since then the company has gone on to use the same business model in a wide range of other markets -- from home, travel, pet and life insurance to mortgages, loans and savings -- and has quickly established itself as a leading player in each sector.

The introduction in 1999 of Direct Lines internet site, directline.com enabled the company to capitalise still further on its advanced technological skills while bringing the benefits of one of the fastest and most efficient quote and buy services to millions of UK internet users, 24 hours a day, 365 days a year. Today, the company is the UK's leading internet insurer.


Direct Line is a wholly owned subsidiary of the Royal Bank of Scotland. When it launched in 1985, Direct Line was the first insurance company to use the telephone as its only method of selling motor insurance policies direct to customers. Using the advantages afforded by its technological efficiency, it was able to reduce premiums for millions of motorists while offering a faster, more efficient and convenient service than had been available ever before.

Such was its success in the motor insurance sector, that in 1988, Direct Line went on to use the same business model to challenge the grip that mortgage lenders exercised on the home insurance market, introducing buildings and contents insurance as its second core product. During the 1990s, the company added other financial services, including mortgages, loans, pet and travel insurance, to its portfolio of products, quickly establishing itself as a leading player in each new market.

In 1998, Direct Line entered the roadside recovery service, mounting a direct challenge to the traditional motor breakdown companies. Its individual approach enabled it to price 20% lower on average than existing companies and as a result Direct Line Rescue has grown to become the UKs fastest growing breakdown service.

Building on its reputation for providing a fast and efficient service, Direct Line began operating via the internet in 1999. With the launch of directline.com, it was able to deliver a quote and buy service to customers 24/7 and quickly grew to become the UKs leading internet insurer gaining over 30% of the online insurance market. Key to the success of Direct Lines web operation is its full integration with services offered by telephone, ensuring a seamless customer service.

In July 2000, the company launched www.jamjar.com, a telephone and web-based car retailer providing an online showroom and fully integrated call centre access. Within a year, it had become the leader in its field, with over 40% of the UK online car market.

International expansion has always been one of Direct Lines aims. In 1995, it embarked on its first overseas venture in Spain with Linea Directa which is now that country's largest direct motor insurance provider. In March 2001, through a joint venture with Japanese life insurer, Yasuda Life, Direct Line Motor Insurance was launched in Japan -- the worlds largest single motor insurance market. During that same year, geographical expansion continued in Europe and resulted in the red phone brand being launched in Germany and Italy at the start of 2002.


Each of Direct Line's products is designed with the same basic philosophy -- to offer consumers a clear, straightforward, good value alternative to products that are sold through traditional distribution channels. Products are designed to be adapted to the needs of individual customers and customer service is at the heart of the Direct Line proposition. All staff members are trained in customer care and sales processes are reengineered to cut out complicated forms and jargon. One of Direct Lines earliest revolutionary actions in this respect was to remove the need for motor insurance cover notes by arranging for all documents such as policy schedules and insurance certificates to be laser-printed immediately and forwarded by first class post to customers, usually for delivery the following day.

Innovative technology also helps to keep down costs and reduce premiums. For example, most customers use credit cards or Direct Debits to pay for Direct Line products so that payments can be processed electronically, keeping staffing levels and overheads to a minimum.

Automated call handling systems also ensure that the company can quickly and effortlessly re-route its fifteen million customer calls each year between its six call centres around the country. As a result, the length of time customers have to wait to speak to an operator is kept to a minimum.

Recent developments

Enhancements to its internet site and the launch of My Direct Line in 2001 meant that for the first time, customers could register and monitor the progress of their motor claim online -- a service that has since been rolled out across other product areas.

In 2002 Direct Line introduced an innovative new service, Direct Line Home Response 24 which provides customers with access to an efficient and reliable 24/7 home emergency service, using Direct Line approved tradesmen to carry work out. The service, which embraces wiring, plumbing and drainage, security and heating, gives customers immediate advice in the event of an emergency. It also organises and pays for emergency assistance, including call out and labour and guarantees all permanent work carried out.


When Direct Line Insurance launched in 1985, its aim was to sell cheaper car insurance direct to customers using modern technology to speed up and simplify the sales process while keeping costs down.

The company's first television advertisements appeared during the late 1980s but its branding breakthrough came in 1990 when the first television commercial featuring the distinctive Direct Line red phone on wheels appeared on UK screens.

The Direct Line red phone and its associated jingle, rapidly established high levels of recall among consumers soon after its introduction, helping to heighten awareness ratings to levels normally associated with high profile consumer brands. With a 95% brand awareness level, the red phone icon already has proved a huge success with UK consumers and has come to represent innovation, value for money and leading customer service. It is now also well on the way to achieving similar recognition overseas.

Today, the famous red phone continues to appear in all of Direct Lines advertising and marketing communications and is a constant cheeky but likeable symbol of Direct Lines brand personality. It evokes feelings of friendliness, fun, innovation and the arrival of a rescuer -- emotions rarely associated with the dry world of insurance.

Sponsorship continues to be an important promotional tool for Direct Line. In partnership with Victim Support, the national charity for victims of crime, it has helped to fund research into improving the support given to victims of burglary. It also sponsors Brake, a not-for-profit road safety organisation that works to stop death and injury on the roads and cares for people traumatised by crashes.

Brand values

Direct Line has set itself a mission to succeed. The company as a whole and the individuals it comprises strive to treat customers in a way that is always trustworthy, straightforward, human and challenging. It is customer-focused, innovative and pioneering. Its level of consumer awareness in the UK is high, reflecting the success of the red phone icon. The culture is non-hierarchical and can-do, allowing the business to come up with new ideas and translate them into concrete benefits for customers as quickly as possible.

Things you didn't know

  • In Direct Line's first three months, it gave 9,000 motor insurance quotes over the phone. It now handles this number in one day alone.

  • Direct Lines first office opened in 1985 in Croydon with just 63 staff. Direct Line Group now employs well over 10,000 people.

  • Direct Line sells a motor insurance policy every six seconds of every working day.

  • A customer notifies the company of a claim every 30 seconds.

    © 2003 Superbrands Ltd