Direct Line Insurance Share Discussion Threads

[mackie] 08/4/2021 15:23

usual setback for ex-d day but ultimately this has only one way to go. Up
IMHO

[wolansm] 08/4/2021 11:26

Happy to be here looking forward to divi

[fenners66] 08/4/2021 09:11

14.7p xd and down 14.5p?
With stamp duty and trading costs
So far....... the dividend was the better option.
After that of course it is just red or black....

[saltaire111] 08/4/2021 08:59

Ex-D today...

Salty

[wba1] 08/4/2021 08:44

There are 2 reasons to hold rather than trade DLG. Either to tuck away for income (a decent divi is very safe going forward, even if core performance declines, due to the large surplus claims reserves they have tucked away for future release) or in the expectation of possible takeover. Putting these to one side there are better long term plays as DLG is a very focused UK retail insurance play in a sector under regulatory attack. I prefer to trade this share but can understand those who hold it - both approaches should deliver a return. I would just caution that DLG is not an exemplar in the insurance business (too focused, regulatory pressure, pricing tech easy to replicate except dataset).

But the wider insurance sector remains significantly undervalued and DLG may ride up with it.

[mister md] 08/4/2021 08:20

Recent days/weeks have shown value investing is back - look at the great rebound in most FTSE dividend paying stocks whilst the (US) Tech & growth plays have started to retreat a bit. Shares like DLG are easy buy and hold plays, IMHO of course.

[stockready] 07/4/2021 22:29

eaax

Thanks mate
Can't stand this deranged dummy
Truly psychopath she is,

[eaaxs06] 07/4/2021 22:20

Just filter them, stockready, it works a treat.

Good luck everyone, Sid.

[linton5] 07/4/2021 11:45

Yea I did same yesterday Porsche at 320 that sudden drop to 295 last week put me on alert so it might visit there again from tmmw

[chess123] 06/4/2021 13:01

Very disappointed at rise up to dividend, wish i had just topped up sabre, thats rising nicely.

[porsche1945] 06/4/2021 11:04

Doesnt seem to be getting its usual bounce to 1.37 ish prior to ex dividend, will offload tomorrow at 4 regardless before ex dividend anyway as it will get whacked all the way down to 2.70 in coming months once its gone ex, more return to buy it then and sell when it pops up before next ex dividend. Market didn’t like the fall in profits, yet another shrinking ftse 350 dividend stock, do wonder if this is now moving to a lower trading range. U.K. indexes are scary bad, trail even Argentina which has had a debt crisis for gods sake, what will dopy boris and his brexit loonies do next, more lockdowns in the autumn maybe....ooow err.

[chess123] 06/4/2021 08:51

Hopefully will rise in the run up to dividend i also hold sabre there dividend couple of weeks abiut 12p

[yf23_1] 02/4/2021 16:17

Coming to the end of the wedge by looks of it.

[wolansm] 02/4/2021 09:40

Plus the other small upside is them cancelling shares, what's the alternative Nationwide Building Society

[wolansm] 02/4/2021 09:22

I'm quite happy to take 7% all day long. Might drift in and out but recently added a lot.

[sinzu] 31/3/2021 08:43

I worked for DL some years ago in business support under their then parent company, RBS. I still have friends there. They are the smartest, innovative and most forward thinking people I have ever worked with. I think it could be a mistake to underestimate them and what they are capable of.

[wba1] 30/3/2021 22:29

I am with you trading the range. It is the safe and easy method with DLG. The Israeli contribution to insurance tech is pretty old. I recall working with Earnix on behavioural pricing many years ago, and Highway (a name from the past) were playing with behavioural claims management at least 15 years ago. Don't think UK insurers are blind to the opportunities of tech, including various forms of AI - there were tests with neural networks and genetic algorithms for pricing as long ago as the 90s. The main driver of the expense ratio in the UK has always been acquisition costs. If Lemonade really have a sustainable advantage they should find it easier to succeed in the USA where pricing sophistication is low and agent channels are dominant. The balance of pricing and acquisition in the UK is a particularly tricky problem if you lack the data to start.

[wba1] 30/3/2021 16:34

Porsche; you may be right, but when insurers get acquisition fever and have a pile of money burning holes in their pockets (which is certainly true at present) management can forget basics. And that is without even considering personalities! I came across Mario Greco (Zurich CEO) at Allianz and he is not exactly known for listening to advice!

I am interested as to the nature of the Lemonade 'chassis'. In UK retail you can win short term through other routes but ultimately you need a cutting edge pricing model or it will end in tears (unless you compete for retail to absorb fixed costs in an insurer with a big commercial book or other interests). My doubt about Lemonade was based on US retail insurers not having such models suitable for the UK market (and certainly not the dataset). So where do Lemonade have an advantage?

[tomleafs] 30/3/2021 13:00

Porsche you don't need much growth to get a reasonable return with the yields on offer in the UK. Using Direct Line as an example, imagine you bought in early 2013 shortly after IPO for £2 a share, as long as you re-invested your ordinary and special dividends you would have grown your money at just under 15% a year as of today's price i.e. turning £1,000 into slightly over £3,000 during those 8 years. This compares favourably to average UK inflation of 2% a year during this time. The danger of just looking at the share price graph is that you can miss the bigger picture. ATB

[porsche1945] 30/3/2021 12:23

@wba1

I understand the points you make but just cant really see why anyone would bid for it ( hope I’m wrong!!) when it operates in such a saturated heavily regulated market. RSA wasnt taken over for its UK stuff. Firms like Lemonade ( that will soon be operating in all US states if not with entirely the same products as laws v different state by state) are a game changer, the “ chassis “ of their business built around technology, I think legacy companies everywhere are in real trouble and the ftse 350/UK has nothing but tired legacy businesses with static or declining business models, the shares never go anywhere for any of this stuff becos there is zero/zilch growth. Really worried about UK plc in general tbh, looks really challenged in every respect, so does europe.

[wba1] 29/3/2021 22:39

Porsche1945; I don't disagree with your sentiment but my comment about possible acquisition was (1) entirely speculative with no specific knowledge and (2) driven by the wider behaviour of the large players globally. Allianz, Generali, Zurich, Chubb are all currently active in major takeovers and there has also been PE activity. This is more than I have seen for many years. DLG is not my favourite insurer, but it does have a strong brand and a core expertise which could be used more widely by a global insurer with limited direct skills (for which read all of the previously named). Add in that the price would not be excessive and that, say, £6 billion is no issue for those named or PE, and the possibility (no more than that) of DLG coming into play exists. Of course, if the potential bidders get tied up with other big takeovers (such as the current Hartford auction) they may not want to look elsewhere.

I tend to be less concerned about the likes of Lemonade. I wrote a big retail p&c book in the UK and worked with the US subsidiaries (Hartford and Firemans Fund)of both of my last 2 companies. The big difference between the US and UK is that pricing in the UK is much more complex (ignoring the 50 separate US jurisdictions which is a big complication). The DLG dataset and understanding of UK customer online insurance behaviour gives them a big head start, even if Lemonade bring outstanding IT and marketing. I recall when Swiftcover grew in the UK. The reason they are no longer material (not sure if Axa even use the brand today) is that they lost the pricing war - made huge UW losses because they lacked data and analysis (and were run by salesmen who made Shyster and Flywheel look like saints, and sold Axa a massive pup).

But it will be interesting to see how things pan out. Absent a bid I can only see DLG as range bound.