Direct Line Insurance Share Discussion Threads

[risa5] 13/11/2019 16:39

Its not a good sign, GS cut their target today ahead of update next week.

[essentialinvestor] 13/11/2019 16:04

Well in 30 years not sure I can recall one example of a delayed and planned after hrs statement bringing ...good news. Perhaps this will be the exception, or by the time we get to the date it may possibly be largely in the price. All speculation at this point.

[yump] 13/11/2019 15:55

Essential Investor They've probably got access to prices from other insurers and so can put up their own data to show how they compare. The issue will be that is not independent. However, there have been a lot of issues recently questioning the independence of price comparison sites and their rankings. I certainly know that many comparison sites outside insurance were/are not strictly independent, because the retailers offering the same product, but a better commission, get put higher up the comparison chart. Which on a mobile puts them on page 1, instead of page 2. Did it myself. Never claimed to be independent though. Just the same as any sort of incentivised agent selling - you promote the product that pays the best. Also, if some retailers had the same product and offered a stupidly low commission, then they got left off. Public doesn't actually need or want all the suppliers, in order to make a purchase.

[meek] 13/11/2019 15:46

Calm down, the whole sector is getting a beating today, the only reason DLG is worse is because their results are still unknown.

[risa5] 13/11/2019 14:00

It would be interesting to see if Goldman had any comments about their cut recommendation today.

[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.