Direct Line Insurance Share Discussion Threads

[spob] 29/11/2012 15:38

money supermarket very useful website lots of good tips/info on there aswell

saved 55% on my car insurance renewal this year

[tyranosaurus] 28/11/2012 09:52

I`ve just got my house and contents renewal from Direct Line at £419.

I`ve just checked on MoneySuperMarket and 81 of the 82 quotes are cheaper than this.

63 of the quotes are less than half the price of this Direct Line quote.

They appear to have been ripping me off for years, but no longer as I am moving my insurance elsewhere.

Now I know why they don`t appear on price comparison sites. They just don`t compare,

[zcaprd7] 24/11/2012 12:40

Technically, a nice finish to the week as well...

[zcaprd7] 23/11/2012 09:54

As intersting as the micro analysis is, how relevent is it to DL - they seem to be throwing off lots of cash and are still under valued compared to peers...£2 a share now and was priced to go in the IPO, in the FTSE100 next month where the funds are desperate for yield.

[dr biotech] 22/11/2012 11:36

As I now move insurers most years, another thing I have noticed is that when I ring up to cancel the old policy I am normally offered a discount to try and retain me. Generally I can't be bothered to do this beforehand - for the £20 or so its not really worth the hassle, but if you like doing that sort of thing there is certainly some discounts to be had. FWIW I pay about 190 for House insurance and 220 for car insurance so neither are big ticket items.

[topvest] 22/11/2012 11:27

My experience with Direct Line is that they are normally pretty competitive anyway. If I'm not happy I ring them and re-negotiate the best I can. I would rather do this than move to another company as the service is fantastic and 100% reliable. I suspect they have quite a loyal following.

[gorilla36] 22/11/2012 10:53

spob/Dr. Biotech, good posts from both of you and I agree with one caveat. In this age of internet access, it is surely not hard for people to take the ten miutes to go to a comparsion website. My default setting is that there is no such thing as customer loyalty, banks ans insurance co's (and others) will always try it on if you let them. My own current favourite is trying to cancel cotinuous credit card payments.

[spob] 22/11/2012 10:50

that is not true

i know affluent and less well off folks and they all shop around for the best motor insurance

and if by affluent you mean the top 1% well that is a different ball game and would make up a very small percentage of the total revenue of these big insurance firms

[iconoclast] 22/11/2012 10:45

I am always surprised by the lack of appreciation by investors, politicians and media commentators concerning the competition aspects of businesses. Particularly with phone companies and energy providers. Why do they all not understand the affluent consumers are simply not that price sensitive? They are more concerned with an easy option and persistently renew services in the face of apparent price competition.
The truth is, that until individuals are forced to address costs they always take the easy option and pay what is asked without really checking. This is why a large customer base is so valuable. It does not change despite all the pressures e.g. BT and British Gas who both have the highest prices in their sector but are still dominant providers despite all government interventionism.

[dr biotech] 22/11/2012 09:51

Seems that I should have held these for a bit longer - most of the doom merchants in the papers had it wrong. Still I was only after a short term gain.

I used to have my house insured by DL some years ago. We were with them from when we bought the house (at the start they were the cheapest, and they were good when I had a minor car shunt).

After a few years our premium went up from 250 to 300 - we had made no claims in 5 years. So I put my details into their website and it gave me a quote of 190, and it was even less on others. Taught me a valuable lesson - loyalty to any insurance company means they will screw you over. I now check every year - confused.com etc.

[snatander] 12/11/2012 14:08

Looks ready to sink like the General Belgrano, as the IPO stabilisation comes off and markets tumble and overhang of 60% of the stock to be placed in a year

[zcaprd7] 10/11/2012 17:36

Doubt it, still pretty good value compared to peers...

[gymfit] 08/11/2012 21:07

wil this go under the float price

[eaaxs06] 02/11/2012 11:25

I'm very surprised the volume of shares traded has been so low since floatation?

The last week or so they've only been averaging only 3m shares, which seems abysmally low for a share valued at around £3b.

It will obviously go into the FTSE100 at the next review, so surely the fund managers will have to start buying them at some stage.

Or will they wait until the next tranche of shares are sold off?

[caribbeanrob] 02/11/2012 08:29

Thanks Jamie - I should have spotted that

[jamielein] 02/11/2012 08:05

They paid a huge dividend to RBS (£1bn last year) so that would probably explain the discrepancy.

[caribbeanrob] 02/11/2012 07:54

I can't see any explanation for the discrepancies in those comparatives. Am I missing something obvious to do with the change in the capital structure?

[spob] 02/11/2012 07:29

Net asset value per share of 187.2 pence and tangible net asset value per share of 159.7 pence per share (31 December 2011: 240.9 pence and 216.5 pence, respectively)

[barefoot141] 01/11/2012 17:50

Me thinks I should have cashed in earlier today.......

[disc0dave] 01/11/2012 16:06

anyone watching this - up before results, down tomorrow? Wouldn't be surprised...

[spob] 25/10/2012 17:43

Challenges ahead for Direct Line

Investors Chronicle


What's new:

■ Direct Line successfully floats

■ Making underwriting losses

■ Trading update due on 2 November

After much speculation about insurer Direct Line's (DLG) final flotation price, its shares finally began trading earlier this month (11 October) at 175p - a shade above the group's reported net tangible asset (NTA) value of 168p a share. That's not pricey by insurance sector standards but, with plenty of trading challenges ahead, such undemanding pricing was probably needed to make the flotation a success.

After all, Direct Line is hardly the sector's best performer. At the half-year stage it reported a combined ratio (of claims to premiums) of 101.1 per cent - which means underwriting losses. In contrast, core UK rivals RSA and Admiral are both profitable at the underwriting level with 95 per cent combined ratios. What's more, 41 per cent of the book is in motor cover and premium rates there are dropping fast. Reversing that trend will prove hard going, too, now that the Competition Commission has launched a probe into the motor market that could take two years to complete.

Still, that weak earnings outlook may be mitigated by self-help measures - management plans to cut £100m of fat from the cost base by end-2012 and a return on NTA of 15 per cent is also targeted. The group's investment portfolio, focused on cash and bonds, isn't in bad shape either - that delivered a 3.4 per cent return at the half-year stage.



Panmure Gordon & Co says

Reasonably priced. We've yet to issue a formal recommendation - but believe that the shares are reasonably priced at current levels. The initial public offering (IPO) was priced at a level to make it successful and that objective has been achieved. We also think that the company will be able to achieve its cost savings and return on net tangible assets targets - which are not, in any case, that demanding. But, with over 40 per cent of the book in UK motor cover, the real concern is the trading environment - motor rates are falling and the Competition Commission's probe into the motor sector won't help sentiment.



Numis Securities says

Add. To focus on the restricted growth prospects implied by Direct Line's large UK market share is to miss the point that significant profit upside can be delivered from actions to improve margins. The shares currently trade on 9.2 times our 2013 earnings estimate of 20.6p, and on 1.17 times June 2012's net tangible asset. That PE ratio represents a 20 per cent discount to Admiral's ratio - yet we see Direct Line's near-term earnings growth prospects as similar to those of Admiral and therefore think there is a strong case for Direct Line's shares to trade at a similar PE ratio multiple. Expect pre-tax profit of £284m for end-2012, giving EPS of 21.8p and a dividend of 12p. Our price target is 215p.

IC VIEW:
Direct Line releases a third-quarter update on 2 November but, with rates under pressure and with Numis forecasting a (loss-making) combined ratio of 100.2 per cent for the year-end, don't expect great news. True, a prospective yield of over 6 per cent is attractive - although not that special for an insurer. But the shares, which have risen 8.6 per cent to 190p since the IPO, now trade on 1.2 times Numis' full-year NTA estimate - in line with the share rating of some profitable Lloyd's insurers. Hold.

[0micron] 19/10/2012 12:24

Thanks flyfisher and jamielein. I got a bit worried as I had just sold my stake right before the announcement and I thought I missed out on some cheap shares :)