* Direct Line targets solvency ratio of about 180% in medium term

* Plans to pay around 60% of operating earnings as dividend

July 10 (Reuters) - British insurer Direct Line will launch its eponymous motor insurance brand on price comparison websites, it said on Wednesday, in a major turnaround by new CEO Adam Winslow.

The company has long prided itself on not being on price comparison websites by preferring to deal with customers directly in the past, but had drawn criticism from some customers looking to shop for better prices.

"Putting our strongest brand, Direct Line, on price comparison websites, where 90% of consumers shop, means we will be shaking up the motor insurance market once again," Winslow said in a statement.

Winslow, who took over as CEO four months ago, is trying to revive the insurer's fortunes at a time when regulators are tightening scrutiny of the sector and shareholders are looking for management to unlock value after fending off a takeover attempt by Belgian rival Ageas in March.

Over the past few years, Direct Line has struggled with losses and underwriting profitability at its motor insurance arm.

The group said it plans to pay around 60% of its operating earnings as regular dividend, as part of a new capital allocation policy.

The British home and motor insurer is targeting a solvency ratio of around 180% in the medium term, and expects to maintain a ratio above this level as it executes its turnaround plan.

A solvency ratio level above 100% indicates an insurer has sufficient capital.

Shares dropped as much as 3% after the announcement, but recouped some of the early losses to trade down 0.5% at 192.4 pence by 0739 GMT.

"The message from the company that it will seek to have a higher Solvency II ratio in the near term ... likely caps the potential for material share buybacks or special dividends in the near future," JP Morgan analysts wrote in a note.

The group said it would exit or stop investing in original equipment manufacturer affinity motor partnerships and other personal lines businesses and focus on home, commercial direct and rescue outside of motor insurance. (Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman, Mrigank Dhaniwala and Sherry Jacob-Phillips )