Direct Line and Churchill: A reflection on a decade old merger

Direct Line phone and mouse

This month marks the tenth anniversary of the takeover of Churchill by Direct Line, then owned by Royal Bank of Scotland.

True the deal was announced in June 2003, but approval was not granted until October. A time when the Black Eyed Peas were number one with Where is the Love? And just days before Concorde was about to undertake its last commercial flight, bringing supersonic travel to an end ... for now.

However, the event is unlikely to be marked with much fanfare given that most of the executives who oversaw the marriage are no longer there, and the parent of both brands, Direct Line Group, is now an independent entity forging its own path.

Speaking to those involved in the deal but no longer with DLG, some remarked that they would not have known the decade was up had I not mentioned it; while others were too busy with their new ventures to look back on the past and get all misty eyed.

Indeed, the anniversary looks like it will pass without Bromley's El Patio having to dust of too much vintage stock from its wine cellar.

At the time though the deal caused something of a stir as Churchill had tactically positioned itself as the ‘maverick challenger' to Direct Line's market leader.

And although the 'for sale' signs had been put up by Churchill's parent Credit Suisse, few initially believed that the once strong rivals would ultimately be bedfellows.

Asked about the respective qualities each business bought to the other, one former executive commented: "Churchill brought a fresh, challenging approach that was underpinned with the very best customer service and highly motivated empowered staff.

"Direct Line brought structure, formality and scale together with an interest in the detailed running of the business from Edinburgh that Churchill never saw from Zurich."

Another added: "Churchill brought - pace, energy, edge, humour, and passion. Direct Line brought - control, rigour, credibility, and Scottish shareholders."

As to what might have happened to Churchill and Direct Line had they not ended up being joined in matrimony within the RBS chapel, those Post spoke to this week indicated the Bulldog could have stolen a march on the Red Phone by being an early adopter of the aggregator channel.

"Churchill was close to implementing a new IT system - sadly not taken forward post integration - that would have allowed it to be a more flexible business. For instance, the operating model would have allowed it to be a strong player in the aggregator market we see today, and whoever owned it would have thrived," one ex-manager suggested, adding: "Direct Line would probably have had to face the 'do we go on aggregators?' discussion earlier and who knows what the outcome of that would have been without the supporting Churchill brand playing strongly in that channel"

Another agreed: "It is impossible to say what the future would have held, though I suspect the Churchill would have had less direct marketing support but would have remained active in the aggregator channel."

I personally would have certainly enjoyed a few more years watching the two compete, rather than sharing IP.

And if that had happened the landscape of the direct market could be very different today. Indeed, without the Direct Line/Churchill merger fall out, we could be asking Where is the LV? Instead as our old friends Fergie, Will I Am et al noted: It just ain't the same, old ways have changed."

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have an Insurance Post account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: