We would love to hear your thoughts about our site and services, please take our survey here.
** A sudden spike in Direct Line shares fuels vague
chatter among traders of a potential takeover move for the UK
insurance company
** Deals website Betaville denies talk it has published any
report on Direct Line, and adds: "However, one assumes if there
is anything going on from an M&A perspective then some sort of
announcement is imminent."
** By 1344 GMT, Direct Line up 6.6% after surging as much as
13.4% earlier. Volumes so far 2.4 times 90-day average
(Reporting by Danilo Masoni)
Sell now and buy DLG
Dlg similar profit to admiral but 10% divi and valued at half of admiral
genuine post - what is the purpose of the share buy back?
how unusual is it to short a company who is in the process of a share buy back scheme?
if this carries on then within 5 years - and share price stays same - the value of the company will be about 3.2bn
genuine post - what is the purpose of the share buy back?
how unusual is it to short a company who is in the process of a share buy back scheme?
if this carries on then within 5 years - and share price stays same - the value of the company will be about 3.2bn
Where have they gone? Perhaps driving behaviours have altered and there are fewer crashes, but it wouldn’t explain such a big drop.
It is possible – though unlikely – that some who might have claimed a year ago might not bother now the potential damages are so much lower. This would apply especially to those who might have been prepared to exaggerate their injuries.
If we assume that traffic and therefore accidents are not much greater than a year ago, the only explanation must be that people are less able or inclined to make a claim. The number of firms offering their services in lower-value claims has dwindled, and those that have stayed in the market have had to grapple with technology issues on the new portal.
The biggest concern is the relatively small number of unrepresented people making claims. Just 10% of cases were from this group, despite considerable efforts to make the system user-friendly. It was envisaged that this proportion would be much higher, so potentially thousands of injured people with a legitimate claim are not able to make it.
The MoJ is pretty content with how the new system has worked on a technical level. Officials won’t admit it, but they must be happy too with these numbers. Claims have fallen, and insurers are sated. Whether justice is being done is another matter altogether.
The whiplash reforms were really about one thing only: reducing the number of claims and in turn the costs of car insurance. Any pretence at cutting fraud was undermined by the almost total lack of evidence that fraud was a particular problem. Any attempt to paint the changes as benefitting consumers was highly questionable – and in any case the mooted insurance savings won’t be scrutinised for years.
If the purpose was to reduce claims, then the MoJ should pour itself a glass of bubbly (perhaps the insurers could supply the booze). In the first three months that the Official Claims Portal – the site for all whiplash claims valued less than £5,000 – has been in operation, it received 45,718 claims overall. It’s an eye-catchingly low number.
Comparisons with pre-portal years are fraught, but we’ll have a go anyway. From June to September 2020, 104,782 motor claims were recorded by the Compensation Recovery Unit (CRU - the government’s yardstick for claims figures). Some of these will have been worth more than £5,000 and so would not have qualified for the portal, but not many – and certainly not enough to account for the 50,000-plus difference. This period of higher figures was, it should also be noted, the height of the pandemic when roads were relatively empty and car crashes were accordingly reduced. This year’s opening three months of the portal covered a period in which more vehicles were back on the road, and many more people than usual were driving to UK-based holidays than would have done before, yet the numbers are low.
The comparison with pre-pandemic figures is staggering. From June to September the CRU recorded 168,217 motor claims. Set against the numbers accessing the claims portal (and appreciating this is far from an exact comparison) suggests that claims figures have dropped significantly
I have been reviewing the buyback
Based on low share price DLG are going to cancel about 35m shares this year. Based on an annual divi of 25p this will save them about £85m every ten years based on current year divi
If they continue with £100m pa buy back over 10 years this will canc 350m shares saving £85m per year in divi
Re current claims level see link - rta management - below, Dlg current saving I est at £250m pa - they have too much cash question is what they do with it - I suspect they will use it to sweeten new deals with Sainsbury’s and nationwide which are up for grabs next year from rsa - unless of course they are taken over by BlackRock which would ruin my plans as I aim to live off Dlg divi
https://www.claimsportal.org.uk/about/executive-dashboard/
A better point is that this company has paid more than 220p in dividends in less than 9 years - I’ve reinvested all divi since the ipo the value of my holdings is up more than 150% - not a bad return - the great thing is the company holds 1.5bn in cash with little debt and a rising profit with the pandemic and whiplash reforms
DIRECT LINE INSURANCE GROUP PLC
Direct Line Group to partner with Motability Operations Ltd
Direct Line Insurance Group plc (‘Direct Line Group’) announces that it is to enter into a new partnership with Motability Operations Ltd (‘Motability Operations’) to provide insurance to the Motability Scheme, supporting its more than 600,000 customers.
This partnership is expected to grow Direct Line Group’s Motor customer base by approximately 15% to over 4.5 million, adding further scale to Direct Line Group's leading claims management service. This allows Motability Operations' customers to benefit from the investments Direct Line Group has made in vehicle repair and customer service, including its strong digital capabilities. Together with top quartile indemnity control, Direct Line Group will support Motability Operations' objective to provide market leading customer experience and value.
The new arrangements are expected to take effect in approximately 18 months and be for 10 years. The Scheme’s Gross Written Premium is approximately £500m per annum and, similar to Motability Operations’ current structure, Direct Line Group will reinsure 80% of the risk back to Motability Operations via Motability Operations’ reinsurance captive.
Penny James, Chief Executive Officer at Direct Line Group, said:
‘I am delighted that we are partnering with Motability Operations whose work so aligns with our purpose of helping people carry on with their lives, giving them peace of mind now and in the future. Our digital capabilities and strength in vehicle repair, combined with Motability Operations’ fleet of modern vehicles, means together we are ideally placed to deliver a first-class service at a time of rapidly changing motor technology. We look forward to welcoming the colleagues from Liverpool who will be joining us to deliver that exemplary customer experience.’
Andrew Miller, Chief Executive Officer at Motability Operations, said:
“As well as future-proofing our service, the new insurance proposition will offer the potential to grow the Scheme and provide increased flexibility to customers. We are confident these arrangements with DLG position us well to support the continued delivery of worry-free motoring and value for money to our customers.”
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. The person responsible for arranging the release of this announcement on behalf of Direct Line Insurance Group plc is Neil Manser, Chief Financial Officer.
For further information, please contact:
Paul Smith
Director of Investor Relation
There are two savings / whiplash damages ie injury to neck back shoulder are tariffed with about a 50% reduction compared with current awards / lawyers now receive no costs in cases that are settled at 5k or less - in terms of saving there are about - pre pandemic - 550k claims per annum - Dlg has 14% of market therefore deals with say 75k claims - average current pay out is 3k with £600 to lawyer - so approx saving pa is £2k per case or about £150m - however some big lawyers are no longer dealing with these claims so claims may reduce - calculating enforcing a reduction in premiums is impossible