Direct Line Insurance Share Discussion Threads

[encarter] 20/3/2023 14:33

Took the plunge. Rally to 200 hopefully.

[encarter] 15/3/2023 12:44

Planning to average down once the dust settles.https://www.ii.co.uk/analysis-commentary/stockwatch-pricing-recovery-bombed-out-direct-line-ii527250

[coxsmn] 14/3/2023 13:23

Good.Increase premiums equals more profit simples.

[laurence llewelyn binliner] 14/3/2023 10:34

I cannot comment for anyone else, but my motor insurance renewal premiums have come in at +25% and +35% so price corrections are getting applied and built in..

It is a long road to recovering the SP, dividends reinstated will be the trigger, hopefully from H1, a new CEO should be 1st, but who knows if a bid might come in..? our brands have good market share and are valuable..

[wba1] 14/3/2023 09:46

One or two slightly odd comments on company value. DLG is a composite of several businesses - the core retail insurer, the commercial insurer and the support businesses including rescue. The latter 2 businesses are doing well and support the market cap to a significant extent. They also represent a real synergistic opportunity for a potential trade acquirer. So the issue is what value to ascribe to the core retail business - and even there the value is in the recovery and brands rather than the current performance.

[che7win] 14/3/2023 07:29

The butler,
Overly simplistic, it’s their Churchill brand that competes at the low cost no frills end of the insurance market - and last time I checked it was competitive

[coxsmn] 13/3/2023 15:40

Drip feeding is a good strategy.

[nickrl] 13/3/2023 13:50

and how much have they paid off those that got this into the mess it now is?

[livewireplus] 13/3/2023 13:27

Time to start monthly drip feeding contributions in to DLG ? Time will tell ....

[smurfy2001] 13/3/2023 13:23

Bad news comes in 3's so there you have it.

[coxsmn] 13/3/2023 13:23

Patience required for next 12mths.

[kibes] 13/3/2023 12:11

Over the last four years they have been very steady performers with profits around £500 million/year. But now suddenly all the profits are gone. 160p/share is much too high a price for the current situation, something sub-100p would be much more realistic. I do not detect any expectation that 2023 is going to be a good year?

[thebutler] 13/3/2023 11:51

The last time I got a quote from Direct Line is was WAY HIGHER than the price comparison sites so I'm not surprised they are struggling.

This reminds me of when I was building up my DVD collection and HMV priced themselves much more than rivals play.com and amazon ... they obviously took customers for granted thinking there were sufficient numbers who didn't shop around and they could cream higher margin profits albeit on decreased turnover. Eventually HMV failed. Is Direct Line the next HMV?

[salpara111] 13/3/2023 11:42

I've been watching this one for a while now as I am looking for income stocks which is what Direct Line has been since it listed.
With no prospect of a return to dividend payments in the near future I guess I will not be alone in taking them off my watchlist.
There is undoubtedly value here at some point but its hard to see what level that is given the uncertainty going forward.

[deanmatlazin] 13/3/2023 11:32

Dividend and outlook

The Group paid an interim dividend of 7.6 pence per share in 2022; however, given the year-end solvency ratio, as indicated at the January trading update, the Board is not recommending a final dividend. The Board understands the importance of dividends to shareholders and will update the dividend outlook at the half-year results.

2023 earnings are expected to be impacted by higher than assumed claims inflation on Motor business written during 2022 and in early 2023, alongside continued macroeconomic uncertainty.

More bad news is coming soon

[wba1] 13/3/2023 10:07

I agree that today adds little to what was already known and changes nothing in terms of the 2 year horizon or an increasingly attractive target for being taken out. The fairly small nuggets of interest I did take were;

* the section on reserving identifies a change in discount rate used for structured payments but not for lump sums awards. It seems likely that this also explains the recent Aviva benefit of £147m, although I cannot quite figure why the Aviva figure is so much higher. This means we will be awaiting the Lord Chancellor's decision with interest.
* the investment return looks to have been kitchen sinked with commercial property write offs and should recover in 2023 absent a global crisis.
* the commercial business is doing better than I expected and is the one really bright spot. Of course, this also explains the good Aviva numbers as they are huge on this side.

2023 will be little improved if at all but 2024 should see the start of the real recovery. Looking at the sector breakdowns I would now ascribe in excess of 50% of the current market cap to the value of the commercial and rescue businesses alone. So make up your own mind what someone would be willing to pay for the combination of brands, infrastructure and controlled business for the rest. I still have a takeout price comfortably over 200p. I have added a few this morning.

[laurence llewelyn binliner] 13/3/2023 08:27

No surprises today really, we knew the dividend was cancelled and profits wiped out, new leadership, new strategy and pricing coming in for 2023..

[encarter] 13/3/2023 08:25

Most of the bad news is already priced in. It's already fallen 50 percent from highs. Looking to average down at some point.

[deanmatlazin] 13/3/2023 08:19

Market is quote generous today to let some of his mates get out at higher price rather than drop 10% at opening price

[encarter] 13/3/2023 08:10

I would take a buyout now.

[deanmatlazin] 13/3/2023 08:07

2023 will be worse than 2022 due to inflation. Ouxh

[dope007] 13/3/2023 07:56

Dreadful. WTF were management doing??