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Ephemeral. I only know of one fund - Polar Capital Global Insurance - so would be interested in any others. PCGI has only about 8% invested in the UK. It is doing ok. I am not aware of any tracker funds or ETFs focussed on insurance.

There are very few “pure” insurance companies and LGEN is no exception - as pointed out by others - being a complex mixture of retirement (annuities etc), fund management, investment management and insurance. Their accounts are complex and few PIs, or fund managers for that matter , will able to understand them. So unless the fund managers are expert and experienced in the field, trackers may be a good option.

Article in the latest Economist. Bullish. ‘People spend more money on pets than kids nowadays. Best to have a dog in the fight”

This in spite of “private-equity firms have poured so much money into buying and consolidating vet clinics that they have caught the attention of antitrust regulators in America and Britain.”

Nothing new, but good to have , what to me, is reaffirmation from The Economist that CVSG is a good long-term bet in spite of the investigation.

‘...that is far from the case for most banks at present”

Hopefully this will remain the case. But banks are hugely levered/geared and are, as such, fragile and too dependent - in my view - on the trust/confidence of their lenders/depositors. I remain wary after 2008 and the more recent US and Swiss bank failures. These banks failed because of a loss of confidence -because of a deemed short term solvency issue (forced sell of loss making bonds even though long term there was no problem.)

I no longer invest in banks for this reason. I see them as too risky as they can get into trouble overnight even though they are in principle solvent. The increased equity holding required by regulators is of course helpful in mitigating the risk, but ……….

D27 To understand the metrics of LGEN you need to know the consequences of the change from IFRS4 to IFRS17. Then you need to get your facts right regarding the dividend payments as this years payment is 5% above last years, which in turn is 5% above the year before that.

Of course she was aware of what was going on. Are you saying that she controlled the BoD? If so my thesis stands - the BoD was useless as it should not have been her sole decision to make. Neither her renumeration nor the decision to sell was hers alone. It is the responsibility and accountability of the BoD to propose those BoD deliberations to the shareholders. The shareholders approved both the renumeration reports and the take-over.

Tichtich

I see where you are coming from but you are using terminology that is not in line with IFRS17. IFRS17 does not, for instance, recognise “own funds” ) but equity and CSM.

I am no expert on insurance accounts - very complex - but AEGON have produced two very good - IMO - easy to understand videos explaining how it all works for IFRS 17 and may answer your concerns. CSM is, I suppose, is what others have referred to as the future store of profit - is recorded as a liability on the balance sheet.

Poppy did not set her renumeration - the BoD did. It was the BoD that shafted the shareholders, not necessarily her alone., And I am not convinced that the BoD realised that their primary reason for being was to represent the shareholders and look after their interests. Whatever, they did a very poor job IMHO.

Antony901 “ They must go after the oilers $80 a barrel and £1.40 at the pump, daylight robbery”

What a lot of nonsense.

Per litre at pump

Crude price with refinery crude loss: 44P

VAT:23P

DUTY: 53P

Pump price : 140P

That leaves 20p to cover the cost to transport, refine, and market petrol/diesel and provide a few p profit for the oilers. The daylight robbery is by the government not the refiners/marketers.

But the government is are going after the motorists by increasing the duty by 5P.

NICTRIMS - “I ask this because other non insurance companies have dividend cover e.g. X2 or more?”

A good and important question, and I waited to see what others thought, but there has been no response. So why do insurance companies pay out more of their earnings as dividends than other companies? My thoughts.

I guess to answer the question, one needs to understand how insurance companies make their money. Firstly the premiums they get generate revenues higher the cost of the claims. And secondly, and more importantly, they get the premiums in advance of the claims - sometimes a long term in advance - and they make fistfuls of cash investing this money in many of the things we could invest in (stocks, bonds, property…….). . So if they keep their profits how do they use it to grow their business?. Aquistions? Or just more investments in stocks, bonds property………? This is how Buffett made his money in Berkshire Hathaway, but he was very astute in those investments.

So the question I pose is whether we the shareholders would be better of the company investing the profits for us in things we could invest in ourselves, or giving us the money in dividends so we could invest it, or use it for other purposes, as we saw fit. I like being given the cash in this case, and that is what the BoD (our representatives) of insurance companies generally recommend to us for approval at AGMs.

Non insurance companies are different and may be more capable of growing their business with the retained cash. So if these companies can use the money more productively than I could, I would prefer them to hold the profits in the company and reinvest the business with a high return on capital employed. These companies either payout less in dividends, or no dividends at all. Again this would be my choice, and it is what the BoD (our representatives) of these companies generally recommend to us.

I’m sure others may have a different view.

Change of how profits are calculated with the new accounting rules. Cosmetically it looks different, but actually not much has changed regarding the robustness of the company. Follow the cash.

Pokerchips - this discussion has led me to look up exactly what the company act says; this from HMRC taxation manual.

Quote

The Companies Acts thus do not provide who shall declare a dividend and, in particular, do not require a dividend to be declared by the shareholders in general meeting. It is possible to lay down in the company’s constitutional documents (formerly Articles and Memorandum of Association, referred to here as Articles) that the directors shall declare dividends. If the Articles are silent as to the payment of dividends, they are payable only when declared by an ordinary resolution passed by the shareholders in general meeting. If the Articles specifically provide that dividends are not to be declared in this way the directors will be entitled to declare a dividend without the sanction of a general meeting under their general powers.

This, however, is not the usual practice. It is usual for the Articles to provide that the shareholders in general meeting shall declare dividends, but sometimes the directors are given power to declare dividends to the exclusion of general meetings.

In practice, a distinction is drawn between a final dividend and an interim dividend, (meaning a dividend paid between annual general meetings). The Articles usually provide that:

final dividends may be declared by the company in general meeting but no dividend shall exceed the amount recommended by the directors (paragraph 70(2) of Schedule 3 to the 2008 Regulations, which is the model for public companies), and

the directors may ‘decide’ to pay interim dividends (paragraph 70(1)).

Unquote

Pokerchips - thanks for the clarification - and I should have added the shareholder approval only normally relates to the final - not the interim - dividend payment . I don’t recall ever not having to vote on a final dividend on any company in which I have a shareholding.

Tophat. I thought the PRA sets the rules that must be adhered to in the insurance business and, yes, minimum capital ratios are part of the rules. But they don’t “approve” dividends - the owners approve dividends through shareholder resolutions. It is one of the few “rights” they have.

SW77 /- I watched a recent interview with Nick Train and indeed he remains bullish. I have held since the Grand Met days (20+yrs ) and has been at least a ten bagger with dividends reinvested, but in my annual review of my forever holdings, I have put it on my “pay closer attention” list. Fabulous brands, but…

ML. Very sad.

‘of course you have to keep up with the level of "deferred operating profit" each year in order to maintain dividend payouts from it...”

In my view the best way to view this is through the free cash flow calculation. Buffett refers to free cash flow as “the owner’s funds” from which dividends, buy-backs and investments are paid and mostly requires shareholder approval.

If I recall correctly, deferred revenue is recorded as a liability on the balance sheet which would lead to a negative change in working capital. And as free cash flow is: net earnings plus depreciation and amortisation minus CAPEX minus change in working capital, a negative working capital will cause the free cash flow to increase relative to earnings (- - = +).

This is how it is viewed with subscription accounting, e.g. with software companies, when you can have negative earnings but substantial positive free cash flows.

According to the latest Factsheet Terry Smith has sold his long held holding. He has underperformed the market for 3 years now so seems to be moving away from his buy good companies and long-term hold strategy as his churn is now much higher than it has been in the past. Not sure what to read into this but my patience I is also being tested.

A few things you need to take into account regarding CGT.

If you give to your partner, you don’t pay CGT but your partner will pick up the CGT liability.

Gifting to your partner is useful to double your combined allowance to £ 6000pa and additionally useful if the marginal tax rate is lower (10% and 20% % for higher rate tax payers).

If your CG takes your total income/gain (income + CG) into the higher tax bracket you pay the higher rate on the amount over the limit.

We were right royally shafted by Hunt lowering the annual CG allowance from £12500 to £6000 to £3000. Reeves is likely to put the knife in further. Very few will now escape the net.

Yes CGT is payable on the £1 - and it would be fraud not to declare if your total capital gains are more than £3000 pa. HMRC is increasingly gaining more information on our transaction and with AI being used …………

Actually only 20 % of those able to vote. Unbelievable really - a quasi dictatorship - certainly there is no mandate from the “people”. Starmer had fewer votes than the previous labour clown. Quite concerning to the point of being frightening IMHO.

If you pay too much for a share, your rewards will be limited (Benjamin margin of safety, Buffett rule 1 & 2)

But if you buy with a reasonable margin of safety, LGEN is a good lower relative risk investment IMHO. If you buy at the current SP, which is more or less the average SP over the last 10 years, and the SP remains flat, but the dividend increases by 2% pa you will get about a 10% pa return pa on your investment over the next10yrs just from the dividend - all other things being equal. Not too shabby when compared with bond yields.

But it is not the sort of share where the SP is going to rise dramatically because of sparkling business performance. Growth shares offer a better alternative if you want SP appreciation.