Direct Line Insurance Share Discussion Threads

[jubberjim] 10/1/2024 16:20

Irrational markets

You post from an informed ? perspective knowing a lot of technical terms.

All i have to go on are my instincts and the irrationality of the current movements precludes me from having a fixed view.

Does not take much to set nervous investors off hence my own personal trading parameters.
The discrepancies present in the shares I follow tell me to hold back for time being

[jason29] 10/1/2024 16:06

Bought back in. Half a position, so will add if it falls sub 150, but fall seems overdone on known news anyway. Will see how things go, but not intending to trade so ideally will wait for 200+ before reviewing again.

[wba1] 10/1/2024 14:03

Not sure why Lgen would be affected as they sold their GI business to Allianz a few years back and Aviva GI business is only one strand of the wider life, asset management and GI group. But short term responses are often illogical - as can be seen by even Lancashire being down today despite them being a big ticket commercial and reinsurer utterly unaffected by this story.

Coming back to the premium instalment issue; one interesting possibility is true monthly premiums (rather than annual premiums finance funded). Some years back I underwrote such policies for Nationwide and I suspect there are still some around in building society and bank home insurance schemes. The beauty of this approach is that all of the costs and income are part of the premium instead of a separate finance arrangement. Probably better suited to home than motor.

[jubberjim] 10/1/2024 13:19

I expect further pressure to come in next few days across a broader spectrum encompassing more insurers

Not good news for my Aviva an Lgen holdings but these things are sent to try us

On a lighter note cheering myself up by listening to Junior Choice from Xmas Day

On repeat

[wba1] 10/1/2024 12:55

The premium finance comments have been the primary cause (flood concerns were already reflected), but it does show the poor quality of analysts. In 2022 instalment income was £97m. Any change would not wipe it out but simply reduce margins to something the regulator considered market rates so the full year hit would be likely to be less than £40m. The speed of regulators also means there will be no impact on 2023 results, no to minimal impact on 2024 results (due to earnings patterns) and only partial impact on 2025 results even if the regulator acts in 2024 (and with the usual round of consultations that is not certain). And then we have the fact that all retail insurers will be affected - so will look to compensate in rates or other income sources. This is an irritant, but not a short to medium term concern and may even help delay a downturn in the rating cycle which would otherwise be likely to start in 2025/6. It will concern only traders. I am looking to get to 225, which I expect in the next 18 months (if not this year) so short term volatility just provides an opportunity.

It seems odd that analysts are so spooked my a marginal issue. The result is always driven by COR (ex other income) so it is the factors that drive that measure they should focus on. The rating environment and resultant loss ratio (fast recovering). Prior year reserve strength - still the main question in my mind. Renewal rates (because new business always performs worse than business held before). And expense ratio, because a shrinking book usually pushes it up without very strong management.

[crackerboy] 10/1/2024 12:48

The regulator is targeting those insurers and brokers who charge high rates for premium finance. ThisIsMoney published an article on his last year but DLG didn't get a mention.

[deadly] 10/1/2024 12:40

How big is Premium Finance to DLG?

[jason29] 10/1/2024 12:22

Reason for today's fall I expect......

hxxps://www.cityam.com/shares-in-admiral-and-direct-line-sink-after-fca-regulator-takes-aim-at-premium-finance/

Still hoping to get back in sub 150 but a lot will be down to tomorrow I expect.

[jubberjim] 10/1/2024 11:05

Trading update tomorrow I believe added to very few willing investors and nervousness in the market

D Day tomorrow !

[yump] 10/1/2024 10:48

Its not exactly been stable after each substantial rise. Bit of worry about claims probably hasn’t helped. If you like trendlines, its almost hit the bottom one.

[dope007] 10/1/2024 10:48

Floods is a guessInsider information is another

[deadly] 10/1/2024 10:36

So why the big drop today?

[jubberjim] 10/1/2024 10:27

I admire a non binary individual who has the courage of their convictions

but will reassess nearer my initial target of 157

Good luck

[wba1] 10/1/2024 10:11

Just added at 174.2. The fall today is silly.

[wba1] 06/1/2024 16:03

The last weeks floods will impact on the Q1 numbers rather than the Q4 and full year 2023 numbers. However I would expect them to say something in the update - either to confirm expected net losses are within model assumptions, or to quantify any hit, or maybe to comment on Flood Re and wider reinsurance protection. But I would still be surprised if any impact is material. It is worth remembering that the events which hit 2022 were led by a big freeze, which would constitute a reinsurance event (with a big retention) but would not be mitigated by Flood Re. And home cover is also only about 17% of Group GWP.
For me the interesting part of both the Q4 and full year numbers is the trajectory of recovery in numbers rather than the pure 2023 result. The latter will still reflect earnings from business written as long ago as Q1 2022 before serious rate increases started. The other point of interest will be prior year reserves. If they revert to historic release patterns I would take that as meaning the reserve black hole has been filled. Anything else would be a concern. We will need the reserve triangles in the full year report to be sure.
I will be adding if the price gets to 175, even though I am fairly near my preferred maximum in one share after my earlier buys. Given the strong recovery in the rating environment I cannot see 2024 and 2025 results being other than decent for DLG and other insurers.

[pete160] 06/1/2024 14:15

If they don't provide an update on restarting dividends, even at a low level, it will leave them a sitting duck for a takeover approach or an activist investor to royally agitate for a change of management, strategy or further earlier of assets.If they do announce an update on dividends restarting, it may well provide confidence for a bidder to come forward before the recovery gains too much pace.I.e. win, win - imho

[laurence llewelyn binliner] 06/1/2024 13:45

Around 11th Jan 2023 for the last Q4 trading update
Mid March for the 2023 preliminary results

We will see how close the 2024 news flow follows, and with a bit of tailwind a reinstated dividend payout, the balance sheet should be a lot stronger with the asset sale, but we will it be enough to re-start a payout..?

The Consideration after associated costs and tax together with the regulatory capital release will provide a significant uplift to the Group's solvency capital ratio, and on day one (being receipt of the Consideration) this uplift is expected to be approximately 45 percentage points

[jubberjim] 06/1/2024 13:11

There has to be some impact from the floods we are currently experiencing added to which the absence of any dividend news will weigh on the share price

The absence and no sign of when it will be reinstated says to give these a wide berth for the moment.

Am actually now thinking that the price could drift down to that 150 level mentioned in an earlier post

Will avoid for the moment but continue accumulating my star dividend player Lgen when appropriate but Abdn is starting to look promising (yield wise)as long as it avoids those pitfalls that have eroded confidence in Dlg namely the cancellation of the dividend

I await dividend news before taking any further actions

Good luck everyone

[dope007] 05/1/2024 14:06

wba1

Please re-read my post. I inform the insurer immediately and state it is for information only as the claim is being dealt with by my garage. On every occasion my insurance company have said thank you and logged the information. They also state now it is logged if you need to claim through us then tell us and we will pick it up. They have never needed to because my garage won the claim versus the 3rd party every single time. The most recent was settled yesterday despite the 3rd party and their insurer not admitting fault when it was blindingly obvious it was their fault and I had witnesses.

I should add my chosen garage does a significantly better bodywork job than some of the ones the insurance company sends your car to. And yes these use all OEM parts as on everything as that is a requirement for insurance repairs as far as I am aware due to liability if a part failure causes an accident

[wba1] 05/1/2024 13:35

I understand the frustration in the last two posts but suggest anyone who has a claim does let the insurer know immediately. The insurer has a number of interests, not just keeping the cost down but also matters such as third party recovery and, in extreme cases, reinsurance recoveries. As a former underwriting director I would have refused subsequent renewal for a customer who deliberately delayed reporting. This would have to be declared on an application for insurance to another insurer who would load the price as a result. A failure to declare a refusal of cover would make any new policy void.
On a different matter, there does seem to be a bit of a price reaction to the flood reports. DLG, like the vast majority of insurers, use Flood Re (and will carry cat reinsurance for specific events). So I do not expect the impact of the floods to be material albeit there will be some cost.

[dope007] 04/1/2024 16:31

To cut the story even shorter do what I do and go straight to your preferred garage and if they are good like mine they will deal with the insurance company for you. Had several non fault accidents my insurance would have settled knock for knock or even blame me and my garage won every single one of them. Told my insurance company "for information only" each time after the accident

[luckygit] 04/1/2024 13:59

A bit of advice on insurance, especially vehicles. After almost 50 years accident free riding motorcycles, I had a prang last year when I hit oil on a roundabout. I contacted the insurance company (cowboy outfit) and was informed I hadn't insurance with them. FFS.... After much aggravation I told them in no uncertain terms I would inform my solicitor and take them to court. Miraculously they found my policy. They then wanted to send the bike to be repaired in their "preferred repairer" garage who, after researching, don't do many motorcycle repairs. I insisted it went to a garage of my choice even though they wanted an extra £250. To cut a long story short, do not go for the cheapest company when it comes to insurance but go for a quality company with a long history of looking after their customers who treat them with respect. Also, do yourself a favour and take a look at Trustpilot for reviews.

[wba1] 22/12/2023 10:23

Jason29; I understand. The reason for an increase may even have nothing to do with you. For example, DLG may be overexposed in a particular area. This can impact on reinsurance placing so they will look to reduce exposure to get back to the best balance of geographic risk for the placing. Lots of other possibilities which are not down to any personal factors.

[jason29] 22/12/2023 09:20

I understand that wba1, of course I do. I should have given more clarity in my Post. As a middle aged Driver with no claims or anything else on my record and no changes to circumstances, who pays my bills Annually in advance I would hope I would be seen as a low risk option for an Insurer. To see my Premiums Double with DLG was indeed a shock with no claims or incidents. I was expecting maybe a 30% increase or so and then to have to haggle as we all do.

By Paying similar as last year to Aviva this year, I am, very simply I know, just assuming DLG have gone too far with their repricing of risk. I acknowledge every person will be quoted differently but can only go on my experience.

Having said all that, deanowis may have the shrewdest advice of all however lol

I already hold L&G and Aviva so need to reduce my risk in the Insurance Sector anyway.

I'm not just a whinging Customer who's thrown his toys out of the pram, was just trying to contribute to the board with what little insight I have.