Direct Line Insurance Share Discussion Threads

[fenners66] 04/2/2023 09:30

If they do a capital raise (though not paying the final dividend as said above is an effective capital raise) after the higher priced recent share buy-backs its another on to add to the list of incompetent , expensive and ultimately useless buy-backs.

Unfortunately though , despite the evidence , there will still be plenty of acolytes who will continue to advocate and support buy-backs, trotting out Warren Buffett does them.

He also runs companies that can be successful - does not mean Every company is successful !!

[laurence llewelyn binliner] 04/2/2023 07:05

#Woodhawk, they have just effectively done this through cancelling the dividend to shore up the balance sheet.. (+GBP200M)

My bet is that note was talking their own book and looking to buy..!

DLG will recover over time, look at the dividends they have paid out over the last decade, they are a power brand here and fresh leadership will turn the ship around..

Reinsurance now in place has already improved the SCR by 6% going forward from 2023..

[woodhawk] 03/2/2023 19:30

"The bank also downgraded Direct Line Insurance to 'underweight', noting that it believes the group's recent CEO change, strongly restricted solvency capital and "stiff competition" in UK personal lines all increased the likelihood of a capital raise."

Going to have to be a cheap raise isn't it? Who'd want to plough in more money after the recent debacle?

[wba1] 03/2/2023 10:09

I am surprised at Barclays. It must be aware of the stories around BE Group circling Ageas, which is an indicator that takeover interest has returned to the sector with current valuations. It is hard not to see DLG as under analysis by both trade and PE at the current level if Ageas is considered a bargain.

[cwa1] 03/2/2023 07:40

Direct Line Cut to Underweight at Barclays; PT 173 pence

[yump] 02/2/2023 14:31

Top end recruitment rarely involves consulting the people that worked for the applicant or their peers. There isn’t any comeback on the agencies afaik. The quicker they can place people the quicker they pocket their fat fee. As a third party they don’t care about the appointment as they get their money anyway.

Like Uber really - they can over-fill an area with cabs, but it makes no difference to their revenue - they get it whichever cab picks you up.

[diku] 02/2/2023 12:40

Too many variables out there to class as failure...all they have to do is stay within the legal framework...the rest is all noise outside their control...hence the golden hellos and golden goodbyes...

[wba1] 02/2/2023 12:34

I received a consultancy request from Third Bridge this morning (they are a 'broker' for telephone consultations) for a 'global investment firm' looking at the UK motor insurance market. This is the first I have seen since before the pandemic and on past occasions it has been from parties looking at acquisitions. It may be coincidence (and since I no longer take such calls I cannot find out) but the timing seems interesting.

[encarter] 01/2/2023 08:37

Not really. If the driver says a wall fell on their car.

[petersinthemarket] 31/1/2023 10:16

Tks skinny - your link works fine - odd case - difficult to understand why DLG is defending the driver.

[scobak] 30/1/2023 19:54

In that case I should be rewarded in abundance.
Failure becomes a way of life I am sorry to say.

[chachacha] 30/1/2023 13:45

Rewarding failure is the norm these days.

[skinny] 30/1/2023 10:54

Try this link :-

[petersinthemarket] 30/1/2023 10:49

Times articles are behind a pay wall - can you copy it, or extracts?

[diku] 30/1/2023 08:47

Performer or a non performer or due to outside factors beyond their control is the norm so golden hellos and golden goodbyes are normally engraved in the contracts...water tight...and the agency probably get their fees as well...a merry go round set up...what do shareholders actually own?...a company or a moving mechanism called the share price?...

[pete160] 29/1/2023 22:35

With a c. 1 million pound severence package, she's not that poor!

[chachacha] 29/1/2023 17:49

Female ceos are just as poor as male ones. So much for positive discrimination.

[laurence llewelyn binliner] 28/1/2023 10:57

08.11.2022 - the full year 2022 combined operating ratio, normalised for weather, is now expected to be around 98% or moderately above, based on current economic conditions and actions we have already taken and others in progress, our 2023 and medium term targets and the outlook for dividend capacity remain unchanged..

11.01.2023 - taking all these factors into consideration, our initial expectation is that the Group combined operating ratio normalised for weather for 2022 will be around 102% to 103%, therefore, the Board no longer expects to pay a final dividend for the 2022 financial year..

26.01.2023 - Direct Line Insurance Group plc announces that its principal underwriter, U K Insurance Limited, has entered into strategic reinsurance agreements, that together comprise a 3-year structured 10% quota share arrangement. The contracts incept with effect from 1 January 2023 and are expected to increase the Group's year-end 2022 solvency capital ratio by around 6 percentage points.

27.01.2023 - Direct Line Insurance Group plc announces that Penny James has agreed with the Board that she will step down as Chief Executive Officer and as a Director with immediate effect.

The BOD have taken action, but it could be a long journey back for the SP, disappointing to learnt the groups finances were not as resiliant as we were lead to believe only 2 months earlier, however retained earnings do shore up the balance sheet and get us better positioned ready for the next dividend..

[wba1] 27/1/2023 22:38

marksp2011; I agree that the management of profit in an insurer is a black art (because it is so easy to pull various levers to give a false impression) but the core business is not a black art. Reinsurance for a relatively simple primary insurer model focused on retail business is pretty basic. In the absence of multiple separate events at or just below the retention level it is just a case of buying protection to a level which satisfies the risk appetite. And given the scale of DLG a high retention, say £50m, is reasonable. It is, of course, more complex where very long tail commercial business is involved but that is irrelevant in this case. And DLG have always been pretty good at the pricing models which are highly complex but easily understood by those who specialise. That leaves reserving - which I agree is very definitely a black art and where I am convinced there has been failure. The other area which concerns me is distribution. I believe the fastest new business growth has been from the Darwin brand which is focused on price comparison sites. These sites produce the worst quality business. If DLG have been replacing high quality, renewing direct business with low quality first year aggregator rubbish it will have an impact on the COR.

Having said all that, if Esure fetched £1.2 billion in 2018 for a business a quarter the size and with even bigger performance issues then DLG is materially undervalued - and that is without taking account of the added value of operations like Green Flag which Esure did not have or the benefit of a decent commercial business in NIG.

[isis] 27/1/2023 22:18

Well we were told last year that the Dividend was safe or as good as. There does appear to have been some mismanagement here.

[growthpotential] 27/1/2023 22:16

Not a holder but she should have seen this coming. She has to step down. She gotta go

[bodgeman] 27/1/2023 16:59

Similar mistakes to SABRE so I'm expecting a similar share trajectory. They still haven't recovered the ground a year later. This is going to be a medium/long term hold to get to breakeven. Good to see changes in personnel happening and still more to come I hope.