Direct Line launches online brokerage

DIRECT LINE, the home and motor insurance arm of the Royal Bank of Scotland, which pioneered telephone-based selling of financial services products in the UK, goes online today in an attempt to capture the lion's share of Internet-generated personal insurance business.

Directline.com will operate for 24 hours of every day. Direct Line claims that by substantially reducing the amount of information that users are asked to provide, it has been able to cut to 2 minutes the 10 to 15 minutes needed to get cover from existing Internet insurance services.

Ian Chippendale, the group chief executive, said yesterday he expects that by the year 2003, 15 per cent of motor insurance will be bought over the Internet, 70 per cent by telephone and only 15 per cent in branches.

"Direct Line's new website will irreversibly alter the insurance market in the same way as Direct Line shook up the traditional players 15 years ago," he said.

The launch of Directline.com follows yesterday's announcement by Donaldson, Lufkin & Jenrette, the New York-listed brokerage, of a research- based Internet stockbroking service for private clients in the UK.

The service, DLJdirect.co.uk, is modelled on the US online stockbroking service which the firm launched 10 years ago. Unlike execution-only online services like Charles Schwab, DLJ aims to provide up-to-date market and company data, and broker forecasts and analysis.