Direct Line Insurance Share Discussion Threads

[essentialinvestor] 13/11/2019 13:44

Yup, I've been tempted but resisted, whether that's the right decision or not.

[skinny] 13/11/2019 13:40

I've been dithering over these for a while - I think I'll leave my hands in my pockets until the 20th.

[risa5] 13/11/2019 13:27

GOLDMAN CUTS DIRECT LINE INSURANCE PRICE TARGET TO 290 (320) PENCE - 'NEUTRAL'

[essentialinvestor] 13/11/2019 13:05

Thought they had developed a comparison site product,
all be it would represent perhaps a small % of their brands.

[yump] 13/11/2019 12:55

The other issue with DLG is possibly chart-based and nothing to do with the business.

On a long term chart, there is no obvious support level. That in itself imo makes investing very difficult, both for people and algorithms.

[eaaxs06] 13/11/2019 12:51

Yes, it doesn't look too hopefully for the update, next Wednesday.

I was looking to get back in here, given that the 270p low had been challenged, but not broken.

Luckily I held off.

[yump] 13/11/2019 12:51

smithp1

I think there are other factors at work here. They've done fine for years now without the comparison sites.

Without seeing the internal costings, have to assume that not paying commission allows them to pay for their own marketing.

The interesting thing is that comparison sites, voucher code sites and cashback sites all 're-routed' big volumes of sales through them quite fast in the early days. DLG did not join in.

Once those sites got a decent proportion of volume, the other insurers, loans and loads of other sellers were too scared to drop them, because they'd have an immediate and probably disastrous volume drop.

DLG having not signed up, were insulated from that potential drop in volume.

Those comments apply to loads of retailers not just insurance.

[smithp1] 13/11/2019 12:19

Hard to see anything but bad news coming up given the timing of that TU.

[smithp1] 13/11/2019 12:16

Can they really take on the comparison sites indefinitely ?

Reminds of the early days when Ladbrokes tried to take on the Betfair exchange the outcome was inevitable .

[peteret] 13/11/2019 11:47

Maybe all the flooding is making everyone nervous about a high claim cost.Though it doesn't seem to be affecting other insurers

[meek] 13/11/2019 11:20

Seems to be strong support around this level. Can't actually believe we are at these levels, to think this company paid nearly 30p dividends last year.

[essentialinvestor] 13/11/2019 08:53

Will the algos not take this further down in the run up to the update?

[cwa1] 13/11/2019 08:40

Clearly a lot of "ifs", "buts" and maybes about but getting slightly tempted to join the fray at this sort of level. Hmmmm.

[essentialinvestor] 06/11/2019 14:05

Is there going to be a profitability reset lower for the sector with
the FCA looking at pricing for customers automatically renewing?.

I think that is the key question to ask.

It may be on those long standing customer policies where a good deal
of their underwriting profit comes..?

[renewed1] 03/11/2019 16:45

Thanks for your insight FT

[essentialinvestor] 03/11/2019 14:35

DLG's underwriting has usually appeared conservative.
Rather than chase business they seem to focus more on the quality of the underlying book

Their advertising campaign may need a reboot.

[fllegend] 03/11/2019 14:28

Building on the point scrwal was alluding to and my earlier reference to the Ogden discount rate change in 2017, a massive part of insurance company results is the forward looking projections. Insurers have to calculate how many claims they are likely to incur in the next year and how much these claims will cost them (refer to as frequency and severity), and this in turn informs their pricing for the next year. The part of the price of an insurance policy that is for covering cost of claims is called the technical price, and you apply a profit margin and commission to price comparison sites or brokers on top of the technical price.
Of course, as no one can predict future claims with 100% accuracy, this is where the role of the actuary and their use of mathematical modelling comes in. These models are complex and changing one variable will require the whole set of results to be run again. This is why something like the FCA pricing study, which could turn existing price models upside down, will take a long time for an insurer's own actuaries to calculate and digest.

[essentialinvestor] 03/11/2019 13:40

May be a valid observation, however the delay is unhelpful in that context.

[scrwal] 03/11/2019 12:14

There maybe some news that at first glance looks bad but when you read into it the longer term outlook is much better - if this was disclosed during the day the initial market reaction would be to reduce the price but then it recovers the rest of the day to a neutral position once everything is digested. So there may be nothing sinister and the board are doing it to avoid a big intraday price movement.

[smithp1] 01/11/2019 19:57

If it were bad news would they really want a crashing share price on their capital markets day might they not do that the day before or sooner ?

[risa5] 01/11/2019 15:44

Direct Line Insurance Group (LON:DLG) PT Lowered to GBX 280
Posted by ABMN Staff on Oct 31st, 2019 // No Comments
Direct Line Insurance Group (LON:DLG) had its price target dropped by analysts at UBS Group from GBX 330 ($4.31) to GBX 280 ($3.66) in a report issued on Thursday, ThisIsMoney.Co.Uk reports. The firm presently has a “neutral” rating on the stock. UBS Group’s price target suggests a potential upside of 1.73% from the company’s previous close.
Several other analysts also recently commented on the company. JPMorgan Chase & Co. reduced their target price on Direct Line Insurance Group from GBX 360 ($4.70) to GBX 345 ($4.51) and set a “neutral” rating for the company in a research note on Monday, July 8th. Shore Capital restated a “buy” rating on shares of Direct Line Insurance Group in a research note on Monday, September 16th. Canaccord Genuity restated a “sell” rating and issued a GBX 280 ($3.66) target price on shares of Direct Line Insurance Group in a research note on Monday, August 5th. Barclays restated an “equal weight” rating on shares of Direct Line Insurance Group in a research note on Thursday, October 24th. Finally, Deutsche Bank restated a “hold” rating on shares of Direct Line Insurance Group in a research note on Tuesday, September 3rd. Two research analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have assigned a buy rating to the company. The stock currently has a consensus rating of “Hold” and an average target price of GBX 344.83 ($4.51).
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Shares of DLG opened at GBX 275.25 ($3.60) on Thursday. The company has a debt-to-equity ratio of 16.68, a current ratio of 0.55 and a quick ratio of 0.34. The stock has a 50-day moving average of GBX 290.46 and a 200-day moving average of GBX 313.77. The company has a market cap of $3.80 billion and a PE ratio of 8.82. Direct Line Insurance Group has a one year low of GBX 270.70 ($3.54) and a one year high of GBX 366.60 ($4.79).

[risa5] 01/11/2019 15:01

UBS Cut their TP from 330 to 280 yesterday,
just wondered if they had any comments with that recommendation?

[scrwal] 01/11/2019 13:56

Shot in the dark here - the delay is due to Brexit not happening on the 31st and that the forward looking statement needs revising for better or worse. Maybe they have decided to take a more pessimistic view and need to revamp figures but need time to minimise things so that the market doesn't get too spooked - it could be likely that the adjustments are higher provisions which in a years time won't be needed and get reversed back.

There may well be some large special dividends down the road. Short term pain for a long term gain.

[essentialinvestor] 01/11/2019 13:39

Good post, points well made.

[cwa1] 01/11/2019 09:42

Had a SLIGHT change of mind and taken a small starter piece at 370p. Given what looks like 5 year lows for the share price I'm hoping that things are not quite as bad as anticipated. I also assume that if there was a known material shortfall they'd have been obliged to 'fess up to it immediately rather than be allowed to put the TS back. Rose tinted lenses now in as you can tell ;-)