Brit Insurance Share Discussion Threads

[essentialinvestor] 20/10/2009 22:15

Simon

I have held off buying SGH so far as I wanted to see how the
National Express bid unfolded.

I backed SGC at flotation and I have huge respect for Souter,
on a professional level at least.
When he and Ann Gloag buy in the quanties they did late last year,
its time to take notice imo.

jtcod made an exceptional call on SGC a number of years back,
he knows this Company like the back of his hand.

BRE is in a sector that I know very little about, so I have so far
stayed clear.

I have noticed his comments on BNC and my Dad has made a large long term investment.

My main trade recently has been a large purchase (for me) 54,000 shares
in Kofax epic KFX.

The Chairman, CEO, FD and non execs have been buying heavily recently.

On first glance I could not see the attraction, then I looked in more
detail at their recent US aquisition and the huge amount they have spent on
R and D over the last two years, I bought this on a 2 year.

When I see multiple buying like this, it may be an early indication
of a very exciting couple of years ahead, at least that is what I hope
to happen.

I remain mostly is cash and find many stocks more than fairly valued.

I am kicking myself for not buying into IQE which I recently looked at in detail over a numer of days before deciding against buying - wrong call.

[crawford] 16/10/2009 11:26

Tipped in an email sent out by Money week this morning:

And at 211p, Brit Insurance (LSE: BRE), sponsor of the Brit Oval and of England's cricketers for four years from 2010, is on a current year multiple of ten, expected to fall to just over six in 2010. The price/book ratio is just 0.8, and the yield is over 7%.

[jtcod] 28/9/2009 13:44

Always hard to call the markets reaction over a short time frame like 18mths simon but I value the company at more than double the current share price Hopefully that will be realised sooner rather than later.

[simon gordon] 28/9/2009 13:05

Hi JTC.

180p to 200p looks like the area to accumulate. The yield is excellent, with a forward p/e of 5x. A gentle re-rating could take them past 250p. Margin of safety looks sound. Just a matter of sitting and waiting.

I am impressed by their strong marketing push to elevate brand awareness.

How high do you think the share could go over an 18 month timeline?

[jtcod] 28/9/2009 12:31

Hi Simon
Thanks for setting up the thread. That is an interesting chart. The last big dip was at a time when perhaps there were bonafide concerns. This time round I think the company are in a far stronger position.

[simon gordon] 27/9/2009 12:31

Hi Guys

I've started a new thread with some new links and a long term chart:

[junior21] 26/9/2009 10:30

Small mention in Tempus, second from last paragraph

[jtcod] 23/9/2009 09:47

Thanks for that Simon.

"KBW analyst Chris Hitchings did voice some concern about Brit, warning that the insurer's commitment to its UK growth ambitions will "leave the group either looking very clever in a few years' time or in as much trouble as it was post 9/11"."

I think the the strategy is sound. When the leading UK commercial insurer Aviva pulls out of certain UK commercial sectors's and hikes their premiums significantly in others it seems to me to be a very good time to take advantage of the opportunities that creates. At the same time BRE have reduced exposure where they have seen falling premiums. I like their business strategy along with their prudent investment strategy that has secured a good rating for the company and further business on the back of that rating. Their strategy should bear fruit in time imo.

[simon gordon] 22/9/2009 18:20

Insurance Day - 17/9/09:

Lloyd's insurers given positive response to KBW presentations

MAJOR Lloyd's insurers have received a broadly positive response to their presentations at this week's Keefe, Bruyette & Woods European conference.

KBW analyst Chris Hitchings did voice some concern about Brit, warning that the insurer's commitment to its UK growth ambitions will "leave the group either looking very clever in a few years' time or in as much trouble as it was post 9/11".

Commenting on Brit's future ambitions, Hitchings said: "While Brit no longer talks openly of its specific gross written premium target, Douetil still emphasises that he sees Brit as a 'leading international' insurance group which requires 'size, scale and diversity' and he wants 'sustainable' business, which he explained as in contrast to 'opportunistic' Lloyd's business.

"The expansion into UK commercial has been re-accelerated and Douetil argues strongly that the people, the network and the permanent cost advantage he has created in the platform will generate substantial profits once the cyclical upturn is under way.

"While he sees commercial motor rates up and property flat, casualty rises are still just a 'hope' and he confided disappointment at how AIG remains a competitive disruption in the UK.

Hitchings said Brit's wholesale business has, as the insurer has admitted, an indifferent record and more has needed to be culled, notably the medical expenses business and much of the financial institution's professional liability, the latter reflecting that claims uncertainties remain despite rate rises.

Catlin's chief operating officer, Paul Jardine, used his presentation to characterise current conditions as the 'cheating phase' of the cycle where insurers try to pretend that current business is more profitable than it really is.

"In due course, this would be recognised and pricing would move up, but until then, in keeping with its disciplined tradition, Catlin was reserving its own business cautiously and keeping much of the $290mn capital it raised earlier this year to one side," Hitchings said.

Hitchings acknowledged that Catlin is a strong and diversified business, adding: "Some have questioned that the group emphasises this aspect rather than its profitability, but Jardine emphasised that the number of offices reflects that the group is happy to employ the best people where they are rather than insisting they move to London. Its Bergen 'office', for example, houses a small team of experts in fish farms; Innsbruck does the same for a cargo team."

Jardine argued that this development, reflecting Stephen Catlin's mantra that he is building a business for the long term, has undoubtedly cost in the Profit and Loss line, but said many of these offices are now starting to contribute.

Hitchings said Bronek Masojada, chief executive of Hiscox, gave the insurer's familiar story of opportunistic wholesale market exposure, with substantial profit opportunity now in reinsurance. The steadily built retail business is also creating a solid profit stream and long-term growth.

"Hiscox continues to develop its UK brand in homeowners and there is good growth, which the group believes is profitable despite limited rate rises. The significant opportunity has been in piracy covers, which have sold well using the group's marine and kidnap & ransom expertise," Hitchings said.

Another familiar story came from Beazley, where the new chief financial officer, Martin Bride, focused on investment de-risking, the group's continued strong reserving and the impact of the redomicile to Jersey/Ireland.

"Interestingly, Bride suggested that insurance brokers are starting to limit carriers used, so Beazley is focused on developing and strengthening its distribution relationships," Hitchings said.

[oniabsta] 21/9/2009 07:45

Sichuk,

Yes the link worked fine.
Thanks for opinion on Money week, I like the look of it and will probably subscribe.

[sichuk] 18/9/2009 23:15

Yes I do. One of just a handful of publications-gives excellant secular coverage and always seems to go the extra mile to be balanced. Go to their website and subscribe online-costs approx £1 perweek?

Just hoping the link worked? Couldnt remember whether I was logged on or not!

[oniabsta] 18/9/2009 21:13

sichuk

do you subscribe to money week? and if so is it any good?

[topvest] 18/9/2009 20:58

Very odd how non-life insurers have stepped out of the latest rally. They now look exceedingly good value versus the rest of the market. BRE and OIH for example are dirt cheap.

[sichuk] 18/9/2009 19:18

lot of negative stuff around at the moment re insurers it seems?

[masurenguy] 18/9/2009 16:25

What prompted todays 4.5% fall ?

[ursus] 18/9/2009 12:47

not all of them - maybe chaucer will bid for brit?

[simon gordon] 18/9/2009 09:56

Must be a sector note out as most of the insurers are down this morning.

[bazzerp] 10/9/2009 17:09

Positive comment

[jtcod] 20/8/2009 12:53

Yes I noticed their purchases Dave. Always comforting.

[daveofdevon] 20/8/2009 12:46

Welcome aboard JTC, was starting to feel a bit lonely in this one.

These first came to my attention a few weeks ago when I spotted 4 directors had bought a total £200k at about 184p. Very pleased thus far and thinking of adding again.

[jtcod] 20/8/2009 10:34

Been buying the stock recently. I think it is significantly undervalued in terms of historic metrics and compared to the competitors listed above.

Post from my thread.

[evox] 14/7/2009 11:48

Good prediction Simon (well the first bit anyway)!
From yesterday:-
KBW cuts Amlin Plc BRIT Insurance Hiscox to underperform from market perform

* KBW cuts Catlin Group to market perform from outperform

* KBW raises Amlin Plc price target to 355P from 340P

* KBW cuts Beazley Plc price target to 165P from 180P

* KBW cuts BRIT Insurance price target to 220P from 240P

* KBW cuts Catlin Group price target to 420P from 460P

* KBW raises Hiscox price target to 345P from 335P

[simon gordon] 14/7/2009 06:47

I put in a request for a Fingers chart, here is the result: