Chief's mystery exit takes esure staff by surprise

Founder assumes control and warns of job cuts

Peter Wood, the multi-millionaire founder of the car insurer esure, has taken over the role of chief executive of the business after the sudden and unexplained departure of Peter Graham, who has run the business for the past five years.

The move comes only months after the launch of the company's women-only insurance business, Sheilas' Wheels, an attempt to replicate the success of Admiral Group's Diamond operation.

The first that staff at esure, which is owned by the banking group HBOS, knew of Mr Graham's departure was when an internal memo was circulated at the beginning of the week. It stated that Mr Wood was assuming Mr Graham's responsibilities "with the resulting departure of the existing chief executive". At the same time, the memo said, there would be a reorganisation of the company, with "a number of high-level management changes", a closer integration of esure with its high-risk sister operation First Alternative, and the loss of an unspecified number of jobs.

"Efficiency is key to keeping us at the leading edge of our markets, esure and Sheilas' Wheels," said Mr Wood in the memo.

A spokesman for esure denied the changes meant there were operational or financial problems, but admitted that the car insurance market was going though a difficult cycle. He would not comment on any pay-off for Mr Graham, who it is understood does not have a job to go to.

Mr Wood previously founded insurance group Direct Line.