Direct Line Insurance Share Discussion Threads

[lord gnome] 11/2/2019 16:24

Good recovery after a biggish fall first thing. Broker downgrade?

[lord gnome] 23/1/2019 08:19

HSBC today reaffirms its buy investment rating on Direct Line Insurance Group PLC (LON:DLG) and raised its price target to 424p (from 410p).

[jrphoenixw2] 10/1/2019 14:25

Does anyone know what has hit the share price today?

[essentialinvestor] 27/12/2018 14:03

Marked underperformance re the Admiral share price

Admiral taking market share.

[speedsgh] 19/12/2018 14:49

This announcement obviously affects DLG's core markets...

CMA tackles loyalty penalty charges -

The CMA has today announced a package of reforms to tackle the substantial loyalty penalty impacting millions of people.

The Competition and Markets Authority (CMA) has investigated concerns raised by Citizens Advice in a 'super-complaint', that companies penalise existing customers by charging them higher prices than new customers.

The CMA has looked at the 5 markets highlighted by the super-complaint - cash savings, mortgages, household insurance, mobile phone contracts and broadband - and found that there is a total loyalty penalty of around £4 billion a year in these markets. It also found that vulnerable people, including the elderly and those on a low income, may be more at risk of paying the loyalty penalty.

The investigation has uncovered damaging practices by firms, which exploit unsuspecting customers. These include continual year on year stealth price rises; costly exit fees; time-consuming and difficult processes to cancel contracts or switch to new providers; and requiring customers to auto-renew or not giving sufficient warning their contract will be rolled over.

Millions of people are affected - from around 1 million in the mortgage market to nearly 12 million in the insurance market. The loyalty penalty is also likely to arise in many other markets, where people's contracts are rolled over to a higher price.

A number of recommendations are being made to regulators and government to help stop loyal consumers being ripped off. These include:

· Cracking down on harmful business practices using enforcement and regulatory powers to clamp down on harmful practices that stop people getting better deals. The CMA has today opened a consumer law enforcement investigation in the anti-virus software sector. This is a first step and further action may be taken by the CMA and regulators against other companies.

· Setting out clearly the principles businesses across all markets should follow, such as people being able to leave a contract as easily as they enter it. The CMA will also be looking at whether consumer law should also be reinforced.

· Firms should be publicly held to account for charging existing customers much more; regulators should publish the size of the loyalty penalty in key markets and for each supplier on a yearly basis.

· Targeted price caps to protect the people worst hit by the loyalty penalty, such as the vulnerable, where needed.

The CMA has also made recommendations to the FCA and Ofcom in each of the 5 markets, where work is currently underway. These include:

· Mobile: providers must stop charging pay-monthly customers the same rate once they've effectively paid off their handsets at the end of the minimum contract period. Ofcom should continue its work to challenge this practice and bring it to an end. More should also be done to make people aware of sim-only packages.

· Insurance: there is evidence of firms continually raising prices in this market. The FCA must look closely at these pricing practices in its current market study and take action to prevent people being exploited by firms. This should include considering pricing interventions.

Other recommendations have also been made in the mortgages, cash savings and broadband markets on ways that regulators can tackle the loyalty penalty and protect those being hit the hardest.

The CMA considers urgent action is required. It will be taking forward these recommendations, along with government and regulators. If sufficient progress isn't made, it may take further action.

Andrea Coscelli, Chief Executive of the Competition and Markets Authority said:

Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated. They shouldn't have to be constantly 'on guard', spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.

Millions of loyal or vulnerable customers are being taken advantage of each year by firms - and end up paying much more than they should do. This must come to an end.

That's why we have today recommended a robust package of reforms. There must be a step change to protect the people being hardest hit, including targeted price caps where necessary.

Together the CMA, regulators and government must act more promptly and powerfully to hold firms to account, stop them exploiting their customers and restore people's trust in markets.

[scrwal] 19/12/2018 13:36

Sky are reporting that DLG may be interested in buying the general insurance arm of LGEN for c£400m.

[scobak] 13/12/2018 21:02

Indeed - if the specials are factored in, then the return is north of 10%.

[dhmace] 13/12/2018 10:05

You need to consider that there is a cycle in the level of premiums that can be charged. In soft markets there is much price competition which ultimately produces thinner margins and indeed possibly losses. Then following such pressure premiums start to rise and it is this upturn in the cycle that profitability improves and to the advantage of investors who time the cycle well. Other factors come into play e.g. bad weather causing more accidents, changes in injury awards, release of claims reserves held, investment returns on premiums held, plus the particular underwiring skills and strategies of each insurer. Need to follow industry observers.
At these share price levels DLG would appear to be attractive.

[carer] 13/12/2018 09:18

I always thought insurance companies are cash cows which pay out dividends. At such low share price, it looks very attractive to invest some money in. Of course , insurance is for the unexpected events, sometime you pay out, some time you do not. let us hope the worst is over and better times ahead with better strategy whcih I gusee the company management will have to think about, otherwise what do they get paid for?

[mister md] 04/12/2018 14:04

looking a lot better here now ...

[lord gnome] 29/11/2018 12:57

Ha! Often the case.

[ph1ts] 29/11/2018 11:41

Lord Gnome - Spoke too soon!

[lord gnome] 29/11/2018 09:51

Not yet out of the downtrend, but certainly looking a bit perkier the last few days. Relief rally from oversold, or a real change of direction?

[eeza] 07/11/2018 13:29

"I would be happy in quarterly payments"

Totally agree. Large payments are a shorter's wet dream.

[scrwal] 07/11/2018 12:56

The headlines all refer to the 5.8% drop which is somewhat misleading as the £52.7m fall includes £47.3m relating to exiting Sainsburys and Nationwide. The longer term aims of growing its own brands is still on target which is what we want to see and what some commentators seem to have completely missed.
There may be a decent special dividend but I just wish it wasn't paid out in one go with the final as that causes the price to tank - I would be happy in quarterly payments as this is a long term holding for me.

[jrphoenixw2] 07/11/2018 11:36

'Direct Line reports drop in premiums as competition bites'

[skinny] 06/11/2018 09:02

Peel Hunt Add 315.50 400.00 Reiterates

Shore Capital Buy 315.50 370.00 Upgrades

[sporazene2] 06/11/2018 08:32

that was mainly driven by a reduction in partnerships revenue which was expected. this looks like a fairly resilient update to me given the pressure on pricing.

[jrphoenixw2] 06/11/2018 07:54

Gross Written Premiums -6% YoY, don't see that going down well...

[jrphoenixw2] 06/11/2018 07:50

Since I didn't know this was due here is what's^ referred to....



Direct Line Insurance Group PLC Trading Update for the third quarter of 2018
06/11/2018 7:00am UK Regulatory (RNS & others)... [contines]

[wllmherk] 06/11/2018 07:24

On first glance nothing to get excited about, but, nothing to worry about either. I would expect share price to be broadly flat on these numbers, but, my stocks normally tank these days, at least that is how it feels.


wllm

[speedsgh] 31/10/2018 08:46

FCA launches general insurance market study -

The Financial Conduct Authority (FCA) has today set out the issues it will focus on as part of a market study into how general insurance (GI) firms charge their customers for home and motor insurance.

As part of the FCA's 2018/2019 Business Plan, it said it would conclude a piece of supervisory work on insurance pricing practices, the results of which it has published today. The FCA has decided that a package of measures is necessary following this initial work. These include:

· Addressing conduct by firms

· A market study on general insurance pricing practices

· A wider discussion paper on fairness of pricing in financial services

GI plays a key part in the UK economy, generating over £78 billion in premiums for UK insurers. The FCA's Financial Lives Survey shows that most UK adults (82 per cent) have one or more GI products, with home and motor insurance being the most commonly held GI products in the UK.

The FCA has been concerned that general insurance pricing practices have the potential to cause harm to consumers, particularly those who are vulnerable. The FCA's goal is to ensure that retail general insurance markets deliver competitive and fair prices for consumers.

The market study will give the FCA a deeper understanding of the scale of any harm to consumers from general insurance pricing practices, who it affects and, if required, what actions are required to improve the market.