Highway Insurance Share Discussion Threads

[taylor20] 10/5/2007 18:18

SALE OF PROVIDENT INSURANCE TO GMAC

Providing some peer group comparison, sold at a premium to Highway.

[dumpling] 10/5/2007 13:17

Hopefully, we can see 90P again.

[taylor20] 10/5/2007 06:39

Charts looking healthier now as well. Consolidation until Oct, shortly after interims?

[effortless cool] 10/5/2007 06:02

Underwriting slightly down on expectations, broking neutral, investment returns good. It's the last one that's most important so, ovrall, good.

[nigelwestm] 09/5/2007 09:00

Any views on today's news?

[richardbroughton] 11/4/2007 17:00

Bit of a st...st...stutter on the keyboard!!

[dumpling] 11/4/2007 11:37

Got the message Richard.

[richardbroughton] 11/4/2007 09:28

Dumpling, good question, it looks like it! Div. at approx 8% should underpin price at 70 if it falls from there time to go! Watch for Director sells, if you see any get out fast, it went up on Director buys, the opposite could happen.

[richardbroughton] 11/4/2007 09:28

Dumpling, good question, it looks like it! Div. at approx 8% should underpin price at 70 if it falls from there time to go! Watch for Director sells, if you see any get out fast, it went up on Director buys, the opposite could happen.

[richardbroughton] 11/4/2007 09:28

Dumpling, good question, it looks like it! Div. at approx 8% should underpin price at 70 if it falls from there time to go! Watch for Director sells, if you see any get out fast, it went up on Director buys, the opposite could happen.

[richardbroughton] 11/4/2007 09:28

Dumpling, good question, it looks like it! Div. at approx 8% should underpin price at 70 if it falls from there time to go! Watch for Director sells, if you see any get out fast, it went up on Director buys, the opposite could happen.

[dumpling] 10/4/2007 15:51

This chart is starting to look horrible. Does someone know something we don't?

[effortless cool] 31/3/2007 17:07

I've called this so far with unerring inaccuracy. I'm adding to my long all the way down. I'll catch up with Ursus if it keeps on falling.

[nigelwestm] 27/3/2007 14:19

This share is all about the dividend. So, given that it went ex-div last week, I expect they were sells...

[mart] 27/3/2007 12:15

Seem to have been some big transactions going through. Anybody hazard a guess as to whether they are buys or sells?

[dumpling] 16/3/2007 10:11

IC view

The yield is tasty and the prospect of rising rates is good news. But the shares trade at over twice Numis' 2007 net tangible assets forecast - expensive compared to more profitable Lloyd's players - leaving that improved motor-rate pricing outlook looking more than factored in. High enough.

[dumpling] 15/3/2007 17:06

According to the Chairman, 2007 should prove a better year. I hope it is not hot air. "We are well positioned ..." can mean "please buy our products". Let's hope it is not a load of hot air. As my portfolio is quite heavily weighted towards financials since AWG has been taken off my hands I have been hit particularly hard this week, viz. BRE and RBS. HDU have held up though.

[nigelwestm] 15/3/2007 13:46

So, what's the view on where HWY is headed now? Will we see a spike next week as we get close to the ex-div date, or were the results so disappointing that even a 7%-plus yield is not worth the risk?

[l3gend] 11/3/2007 16:18

HWY results ok but not great. Question is whether it will be a consolidation target as we have seen a lot of activity in this sector. I dont see profitability (at the underwriting level) improving much over the next few years as rates will not go up by more than claims inflation because of some structural changes in the market. so the real question is whether someone wants to buy this company but not obvious why they would.

[nigelwestm] 10/3/2007 07:37

Hi EC. All good points. I see that KBC Peel Hunt have changed their view on the share, according to the market report in the Telegraph today:

"Better-than-expected results from Highway Insurance helped the shares up 4 to 79¼p, as the company said it was seeing signs of an upturn in car insurance premiums. KBC Peel Hunt raised its recommendation on the stock to add from sell."

[effortless cool] 09/3/2007 22:10

If you can't beat them ....

These look a good set of results. I was delighted by the relatively small rise that had taken place by the time I got to work this morning, and have closed my short and switched to a long that is twice as large.

The combined ratio of 98.9% is good for a motor business at this stage of the cycle, but I still view their underwriting results with suspicion. Why don't they quantify reserve releases? Why don't they show triangulations of ultimate claim estimates? Why don't they show the unearned premium reserve? Everyone else does all this. It's hard to avoid the conclusion that they have something to hide. My guess is that the reliance on reserve releases is uncomfortably high.

Investments are a different matter. A 5.9% return is excellent and will almost certainly be the best in the insurance sector this year. HWY seem to have established a genuine competitive advantage with their absolute return approach to investing, and it survived last year's Amaranth stress test with flying colours. Higher interest rates this year mean investment income could be more than enough to cover the dividend and any small underwriting loss.

My expectation is that this will overreact to the news, but this remains a difficult motor market. It goes against the grain being long HWY, and I'll likely reverse back to a short position in due course.

EC

[hornets] 09/3/2007 08:11

ex-div date is 21st March

[nigelwestm] 09/3/2007 07:43

So, not as bad as I feared, and how about this statement:

"Whilst conditions in the motor insurance markets remain challenging, there are
now some clear signs that the upturn is emerging. Highway has maintained a
consistent reserving policy throughout the cycle and is well positioned to
increase underwriting volumes as the cycle turns. Our Retail business now has
the potential to make a substantial contribution to the value of the Group. I am therefore optimistic that we will see increased returns in 2007."

[taylor20] 09/3/2007 07:29

The divi has actually been raised! Cover around 1.2x (or 1x before exceptional items).

Ironically only the hedge fund part of the investment portfolio managed to do better than last year.

Tempting

[hornets] 09/3/2007 07:28

Over 7% yield at the current share price, I was expecting last year's 3.7p final div to be held, so an increase of 0.2p is good news.