Direct Line Insurance Share Discussion Threads

[nellynell] 22/3/2024 18:44

Excellent news lovely jubbly over to you Mr Winslow :-)

[hades1] 22/3/2024 17:26

Given the high risk of failure and current interest rates shareholders should take any reasonable offer
250p?

[nellynell] 22/3/2024 15:42

And he should be buy and put away in drawer come back in 2026 results and £3 share price. No sale to Ageas!!!

[triktrak] 22/3/2024 13:41

Transcript of analysts' Q&A with Adam Winslow is now online. As would be expected, he seems very upbeat about DLG's prospects:

hxxps://uk.investing.com/news/stock-market-news/earnings-call-dlg-proposes-4p-dividend-targets-13-margin-by-2026-93CH-3397605

[boonkoh] 22/3/2024 12:45

Wonder if we'll get any new bidders coming out of the woodwork over the weekend, Via Sky News.Ageas will use the weekend to digest and probably come back with a best and final offer, but as others said... Unlikely to be 270p which is what the bod will recommend to accept.Maybe they'll get enough support from top shareholders, and go hostile?

[stevensupertrader] 22/3/2024 11:52

Ageas deal is off otherwise after DLG fairly decent result with dividend reinstated . Ageas knows £2.50 won’t be accepted now .
DLG share price will start to go back down as takeover no longer on the table

[pete160] 22/3/2024 11:37

If Aegas return with 250 it will almost certainly be rejected by the DLG BOD and they will need to go hostile. Will Aegas be prepared to do that? At 250p I think it would be touch and go whether enough shareholders will sell out.

One thing seems sure, the market price will react up or down hours /days before anything is made public.

What we really need is another bidder to come along this next week, even at 260-275p, to liven the job up a bit.

[pander45] 22/3/2024 10:59

I have said this for a while, 250 and it's theirs. Can they get the funds?

[speedsgh] 22/3/2024 06:52

Dividend won’t solve Direct Line’s problems -

Direct Line (DLG) has reinstated its dividend after swinging to a profit last year, but Hargreaves Lansdown says investor confidence won’t be restored overnight.

The Citywire Elite Companies A-rated insurance group reported a swing to a £277m pre-tax profit last year after suffering a £302m loss the year before, allowing it to reinstate its dividend at 4p per share.

Analyst Matt Britzman said the dividend was a ‘welcome relief to investors’.

‘Things have picked up, but there’s a long way to go before this turnaround is complete,’ he said. ‘It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market.’

However, a new chief executive and an improving market means it is back to writing profitable business and changes are underway, including a £100m cost saving plan.

‘Recent takeover news has propped up the shares, and they’ve remained at those elevated levels despite the board rejecting the offer,’ said Britzman.

‘Yes, performance is improving and guidance at least offers a glimpse of hope for better things to come. But there’s still a question about whether that’s to do with a better market in general than Direct Line’s own doing.’

The shares were unchanged at 211.7p yesterday but have gained 14% this year and 44% over the past 12 months.

[leopoldalcox] 21/3/2024 23:31

DLG can be understood in this way. Historic premiums have been too low. The cost of claims was much higher than forecasted. Premiums have risen heavily.The cost of claims in the future will be lower than the recent past. The premiums will be higher. I expect that over 2-3 years the profits will come through and this company will be very profitable

[pete160] 21/3/2024 23:05

Certainly if there wasn't already a bidder in the wings, the share price today would have been going through the floor.Losses worse than expected, dividend lower than analysts predicted (with caution that it might not last) expenses still to be cut - at some unknown point, a strategy statement not until another 3 months on, implemented when? results of actions when?It all sounds quite dire.No wonder Aegas only raised their original indicative bid by 3%Unless another potential bidder appears soon to get the price up, dlg is theirs for the taking at probably 250p

[ajr171166] 21/3/2024 18:35

It's more for investment to move to digital platforms and comparison sites

[jrphoenixw2] 21/3/2024 16:37

ElbRuss55 @ #1317:
'Holding back capital well above 180pc target implies they are concerned about further losses in 2024.'

Or, they're putting a cash/capital fat-$uit on their balance sheet to make themselves much harder for a predator to swallow?

[jrphoenixw2] 21/3/2024 16:33

Yahoo 'Trending tickers' this morning, extract:

'Direct Line saw its gross written premiums and related fees surge to £3.1bn, a 27.1% rise from the previous year. However, it still faced a net insurance margin decline of 8.3%, coupled with an operating loss of £189.5m.

Meanwhile, the insurer’s solvency capital ratio before dividends improved to 201%.

Adam Winslow, chief executive, said the insurer had a “strong platform for recovery”, after a return to profit allowed the group to announce a dividend of 4p per share, "and for the group to have a strong post-dividend solvency capital ratio of 197% at year-end 2023.”

It added that its motor business had now “turned the corner” as it pushed up prices, with policies sold in the second half estimated to achieve a net insurance margin of more than 10%.

The firm, whose brands include Churchill, Darwin and Privilege as well as Green Flag rescue policies, has set a goal to reach a 13% net insurance margin by 2026. This will be supported by a strategic initiative to cut costs by a minimum of £100m by the close of 2025, measured on a yearly run-rate basis.

It comes after Direct Line recently shot down two takeover proposals from Belgian multinational insurance company Ageas.

[elbrus55] 21/3/2024 15:28

I sold out today at a moderate loss.Anybody can sell insurance both at a loss and inefficiently. There is an intention to underwrite profitable and efficient insurance but it just an aspiration. Do they have any competence behind this?Really hope Ageas can turn this around but if they withdraw then you could realistically be looking at a 130p share price

[tuftymatt] 21/3/2024 13:07

Thanks wba1 for all your detailed posts and good luck to you too.

My average sits at just under 200 so I am inclined to hang in there but think I would have jumped too if holding at your average.

Good luck all 👍🏻

[wba1] 21/3/2024 13:02

I have taken my profit as I agree that this is, at least over the remainder of 2024, a takeover play. I appreciate I am more comfortable doing this than some having an average under 160. Good luck to all and I hope a 250 offer does emerge for those still holding. I will continue to monitor and look to get back in if it falls without an improved offer.

[nellynell] 21/3/2024 12:51

Kitchen sinked the results as expected.
Solvency ratio very healthy now. Cost cutting measures implemented.Policies now being written at a healthy profit margin. Dividend reinstated and will grow. Onwards and upwards and screw you Ageas :-)

[wba1] 21/3/2024 12:12

Having had a slightly closer look at the numbers one question jumps out. Looking at note 15.5, which are the triangles of ultimate estimates of claims costs showing the development of that estimate for each accident year by year of development, it is clear that the major hole in the estimates (the underreserving) relates to claims received in 2022. Of the £240m of net prior year strengthening in the accounts £168m relates to 2022 and, whilst you expect the biggest moves from the most recent accident years, this is out of proportion. It can only be explained by systematic underreserving in 2022 on receipt of the claims. I also appreciate that the strengthening includes an element for the total loss fiasco. However, taking all factors into account leads to a simple question;

Was the 2022 huge level of underreserving due to incompetence not seen amongst other insurers or was a specific instruction issued to trim the margin above best estimate when setting case reserves. If the latter, who issued that instruction and what did it say? As far as I can tell they removed all margin above best estimate and are now paying the price.

[pander45] 21/3/2024 09:33

Market thinking takeover more likely now? I think so.

[dope007] 21/3/2024 09:18

This is just a takeover gamble if buying here. I sold on the takeover spike a week or so ago, and invested elsewhere. These results confirm to me personally that I did the right thing.

[wba1] 21/3/2024 09:18

Worse than I expected and no obvious route to diversifying risk, although I appreciate we await the 'strategic review'. The comment about no prospect of prior year releases in the short term suggests they did not take decisive action on this front when they found the under reserving. Other motor insurers are still releasing from prior years and even Sabre, which found similar holes, has released in its latest numbers. The numbers are also flattered by an exceptionally benign cat year. I have not gone into detail in the numbers as yet but my first reaction is that I would now take the offer on the table. I am wondering whether to cash in the rest of my holding or await Ageas next move. To my mind the best aspect of these results is that they may encourage others out of the woodwork.

[pander45] 21/3/2024 09:01

Nothing to underpin, value wise, why the two previous offers have been declined. No argument at all presented. When the next one comes in this will be a done deal.