Wood won’t buy back ‘his baby’ Direct Line

Peter Wood has ruled himself out of the race for RBS Insurance, saying he has “never bought any company with an eye to consolidate and lay off thousands of people”.

Wood, who recently bought Lloyds Banking Group out of its stake in his Esure business for £185m, set out his plans for the group in an exclusive interview with Insurance Times. He also hinted at plans to develop his Sheilas’ Wheels brand for women’s car insurance, and to move into the over-50s market.

Wood said the sale marked the start of a long period of hard work, and refused to be drawn into speculation over a flotation.

He said: “The weeks after a successful MBO are not the time to even think about floating; people who start out thinking about floating tend to fail because their mind is elsewhere.”

Wood founded Direct Line, now owned by RBS Insurance, in 1985. RBS has been ordered to sell the business in the interests of competition, following its bail-out by the government. Asked if he would consider buying it back, Wood said: “This is a market where business can be grown organically with good brands and enthusiasm. That is my forte.”

He added: “Direct Line was my baby so, no matter what I think of RBSI, I’m not going to slag it off. It sits at the top of a tough market and that’s a difficult place to be when price comparison has introduced transparency that has increased churn. Churn is your friend when you’re small and growing. It’s rather different when you’re the biggest and need to find a way to keep your profits up.”

RBS has until 2014 to divest its insurance businesses. A flotation is thought to be its preferred option.

Read the full interview: Peter Wood: Calm and in control.