Aviva Share Discussion Threads

[wba1] 02/2/2021 15:28

I am pretty sure Keith Morris spent his entire career in insurance. Never heard him mention a banking role and I remember him at Groupama (I think) in the 90s. May have had a spell at Excess but, again, not something I know.

[huncher] 02/2/2021 14:24

If it's who I think it is he was a colleague at Excess back in the day at the start of his carer.

[cyberian] 02/2/2021 14:15

wba1...sorry to ask but was Keith Morris ex Citibank? If so a pretty bright guy.

[cjac39] 02/2/2021 13:25

thankyou thats very helpful

[wba1] 02/2/2021 12:31

Hi cjac. Just been for my run so please excuse if typos and less than clear - I am knackered.

Sabre have built their performance on niches which they know well over many years and where the market does not have the data to model in the usual way - everything from classic cars to military vehicles (for collectors, not the forces). This is supplemented by schemes with brokers where they again have knowledge not always available more widely. Some of the broker business has been sourced (years back) by the connections of the founders who sold out a little while ago. I sat on the MIB board with Keith Morris who bought Sabre with others 20 years ago (from Aviva!) and they were from a broker background. Keith is (or was) one of the very best execs I have come across and his abilities and contacts were central to the strategy and its success. His financial stake also made sure none of the usual big company politics led to stupid decisions. The thing that has surprised me is that they have kept this focus after he departed (even with Snowball as Chair).

Where they have moved beyond their traditional niches they have been clever enough to go into low risk business with an underwriting edge, such as women with Go Girl. Although the wider market has used proxy methods to get around the gender ban this is not 100% and means that generally female business is better margin. Although they have also moved into more general business they have been very selective. The only thing which surprised me was that they were on the Tesco panel (which is a crock of ....), but I assume they wrote little business and, anyway, Tesco are taking all the panel in house this year.

They retain a very good team and on the board they have Catherine Barton, who is one of the best actuaries and should spot any glaring issues (such as the Irish black hole that Culmer either missed or permitted at RSA - depending on who you believe).

So to come to your question. Their performance is based on having competitive advantage in niches and being very cautious in moving into areas where that edge is either not present or eroded. I think they would find it impossible to maintain a sub 90% COR if they wanted to double their GWP (partly because of the relative lack of edge in the new sectors and partly because new business always performs 5-10% worse than renewals - even adjusting for price differentials).

I see Sabre as suitable for two types of investing (as long as they maintain their strategy)

* income. Their divi looks solid, especially with their solvency ratio and they have the lowest risk investment approach possible.

* range trading. This is how I invest in them. They merit a premium to the sector based on performance history and to me that means a range of 220 - 320. I look to buy under 250 (I got tempted at 253 the other day) and sell above 280. No point being greedy and this should be possible 3-4 times a year. If the market recovers substantially the range may need to change. They can also move quite sharply due to size and some interesting US investors, which helps with this sort of trading.

As you probably gather I am a fan of Sabre. Pure motor (in a market with currently suppressed claims) and a track record. I would expect the results to be good in March (albeit smoothed) and equally good next year.

[cjac39] 02/2/2021 10:24

Hi WBA...ive been taking a look at sabre last few days and its very impressive. why do you think they remain so niche given their obviously excellent at uw and cost control ?

apols not AV but they are in same space..

[wadders5] 02/2/2021 09:39

Euro, you topping up on BP?

[adelwire2] 01/2/2021 22:40

Thank you for the bit of a dividend.. Now spent. When the next bit due?

[wba1] 01/2/2021 22:09

Hi Huncher; tbf the L&E IT department were far and away the best I have seen in the industry (although I would never have told them). Peter Bramhill was excellent.

[dbadvn] 01/2/2021 19:59

How to win an IT contract and make money especially for the Government

1. Stick rigidly to the bid.
2. Under no circumstance tell the customer that the system as defined in the bid is probably unworkable and missing many essential features.
3. Bid incredibly low - at cash flow even.
4. Churn out the system as per bid
5. Along the way point out the shortcomings , add at least 50% , possibly 100% to the original contract due to unforeseen “changes”;.
6. Persuade the customer that he needs several consultants to make a review of the system . Charge at least 1400 UKIP a day/consultant for this.
7. The review indicates that much more needs to be done because it was not included in the main contract ...
8 ad infinitum ...

Sorry , off topic , but may be interesting and enlighten why especially government IT contracts are such a mess and always over run.

All the major IT companies ( Accenture, Capita, etc etc ) rely on this to make obscene amounts of money.

[richyggg] 01/2/2021 19:50

wba1

The majority of IT activity has been outsourced to cheap and useless Indian outfits.

[dr biotech] 01/2/2021 19:20

Latest on france, generali and eurazeo may make joint bid

//www.argusdelassurance.com/les-assureurs/vente-d-aviva-france-vers-un-ticket-generali-eurazeo.177169

[huncher] 01/2/2021 19:01

To be fair having had a lot of involvement with IT depts (as a customer) particularly with legacy systems impacting U/W ,Agency ,Accounts, Actuarial, Maninfo and G Knows what else it is normally the user who is incapable of expressing his actual needs (there are no if's, but's ,maybe's) or there are changes to their brief to do just about everything as an afterthought at the last minute. That's in a the private sector with a very good focus on cost, I hate to think what it is like in the public sector..0

[wba1] 01/2/2021 17:46

I have always thought that the IT departments of most insurers are awful (it is our own fault for paying for the dregs), however I have spent much of the afternoon discovering that they are absolute genius level compared with those system builders at HMRC. Trying to submit a (very) simple application for letters of administration for a relative I have found;

* the need to reregister for different parts of the site (such as estate value and application).
* a complete lack of useful guidance tools
* positively misleading claims about what can be done online
* a site navigation which makes the Hampton Court maze look like an open field

Perhaps I will revise my opinion of insurer IT departments. I am now back to submitting the application by post. Imagine the furore if insurance customers had such problems.

[wba1] 01/2/2021 13:44

cjac; tbf, based on the IT people I have known, the correlation between arcade income and computer science doctorates may be worth closer study.

[chinese investor] 01/2/2021 12:50

50p to 390p !

[cjac39] 01/2/2021 12:23

some of these are amusing

hxxps://www.tylervigen.com/spurious-correlations

[whatsup32] 01/2/2021 12:15

1robbob, i posted that link purely for information purposes, agree it’s PR junk.

Hopefully we get some news from AB by the end of this month regarding disposals . I’m getting more confident

[eurofox] 01/2/2021 11:55

.. indeed, there is a very high correlation between smokers illnesses and those who wear underwear

[cjac39] 01/2/2021 11:39

and the tweedie!

many things would be improved by understanding correlation is far from causation...

[muscletrade] 01/2/2021 11:29

Scroll down almost to the bottom of the daily report.

[muscletrade] 01/2/2021 11:27

@RCT France 29.8% as of 14th Jan 2021 compared to UK 71.3%. Source, Covid population behaviour tracker of those countries that would get vaccinated if one available.