II Editor
04 Aug 2017
NEW ARTICLE: Corporate earnings bring FTSE 100 to life "There's been plenty to cheer over the past few days. A sweep of positive corporate earnings, the likelihood that UK interest rates will remain glued to record lows deep into next year, and a slightly weaker pound all gave stocks a lift.High ..."[link]
Hydrogen Economy
01 Aug 2017
Re: Results and Telegraph report on repa... DS - no I certainly would not expect external auditors to pick up any fishy deals between adjusters and repair shops, as you note they seem oblivious to even the most egregious accounting scams in many industries. Sorry I should have clarified I was referring to internal audit processes for checking consistency and appropriate levels of repair costs agreed etc. Not having worked in the industry I idea what arrangements exist for this but would hope there is something fairly rigorous to discourage employees from straying from the straight and narrow.H2
deepsleeves
01 Aug 2017
Re: Results and Telegraph report on repa... Any idea that auditors in the UK would pick up fraud through kick back or market abuse should be kicked into the long grass by the clean bill of health given to UK supermarkets.Deep
Guitarsolo
01 Aug 2017
Re: Results and Telegraph report on repa... I doubt the insurers were working as a cartel to increase charges (allowing them to ramp up premiums?). More likely that, yes, each company squeezed their garage suppliers to their favour as much as possible. But if push came to shove they would be able to demonstrate to any regulator that their actions have in fact squeezed suppliers so much, to policyholders' advantage, that if there is a bit of the balloon popping out somewhere else it is inevitable but not evidence that consumers have been ripped off. I don't see this as motor insurers' version of PPI........!GS.
Hydrogen Economy
01 Aug 2017
Re: Results and Telegraph report on repa... GS thanks for interesting perspective on this. I guess the article was implying that the insurers were colluding or instigating the overcharge - but unclear why they would, I cold understand if individuals might come to some arrangement for a kick-back but I suspect that would get get picked up by some of the procedures/auditing any competent insurance Co must have in place.Certainly the market agrees with your conclusion that there is nothing to see here and has focused on the good results. H2 Looking forward to an unwind of the Ogden Nash formula.
Guitarsolo
01 Aug 2017
Re: Results and Telegraph report on repair c... Hydrogen, That was happening when I worked in motor insurance claims 20 years ago+!!! The repair bill for the non-fault driver was always at the very top end (or above) what "your" engineer was saying it would cost. Why? Well the repair garages who desperately need the insurers' work (and are contractually screwed by them) know that they will have to repair the "fault" driver's car for a bare minimum of margin, but when they are repairing the non-fault car they can push up the charges knowing that the paying insurer has little push back provided it is within reason. The cost of paying a claims department employee/ engineer to argue a £3k repair bill down to £2.5k doesn't make it worthwhile. There are loads of ways in which motor insurers (and therefore their policyholders) are screwed somewhere in the system. Motor premiums are high because of
i) High (and rising) personal injury costs, including the currently disputed discount rate.(ii) Increased cost of spare parts, integrated parts, technical parts to cars. (It's not just bits of bumper and panels, cars are more computer than mechanical it seems)(iii) High levels of fraud - both fictitious and exaggerated claims(iv) High levels of administration, red-tape etc(v) High costs of compliance etc(vi) Low returns on investmentsNothing to see here. Guitarsolo - ACII
Hydrogen Economy
01 Aug 2017
Results and Telegraph report on repair costs Results look very solid, good to see positive market reaction for once.Saw following article in yesterday's telegraph but don't have premium so unclear if DL is included in the accusation. Does anyone know if they were and any views whether this might blow-back on DLG? Seems a bit far fetched to me.H2[link] driver in Britain is being overcharged for motor cover because insurers are using secret deals to grossly inflate repair bills, a Telegraph investigation has established.Insurers are routinely inflating repair costs by as much as 100 per cent, while receiving undisclosed kickbacks for the difference, it can be revealed.The system is used by insurers representing drivers involved in accidents which were not their fault to rip off rival firms representing the “at fault drivers” for repair work.Across the industry the process is creating a hidden cost layer potentially affecting all drivers, which could be worth as much as £750m, equivalent to around 5 per cent of the UK's 34 million drivers' annual insurance premiums.Motor insurance premiums reached a record high this year, with the average price paid for comprehensive car cover now £462 a year.
Guitarsolo
01 Aug 2017
Re: re-based dividend Morning Deep S, My reading of the update is that the directors are now sufficiently content to pay out the divi as an ordinary divi (interim and final) rather than lower ordinaries topped up with a special when they know the final score. It's a matter of confidence in future returns and thus is a good thing. It probably doesn't mean much of a difference to the total amount paid, just it should be a bit more dependable. A very well run company that knows their industry and has a super-strong brand. I wish I had more (currently about 5% of the portfolio by value) but I am overweight insurers in general (life and non-life) so shouldn't take on more exposure. And this is insurance so a couple of major events can put a big dent in the returns for a particular year. At this price it is a solid hold. Buy (for others) if it drops back below 380p. Guitarsolo
deepsleeves
01 Aug 2017
re-based dividend Sounds good and should give a 5% plus annual dividend going forward. Will it mean an end to the fairly regular stream of specials?Deep
blouson blouse
28 Apr 2017
Views? My reason for being long on these over 3 years has been mentioned in earlier posts.It is flirting with 350 again today, which is almost 360 inc the recent divi which arrives in our accounts in a few days, so nicely off the bottom immediately ex divi and post the Ogden news, as I expected.But is this a sign that the nadir has passed? Or is it misleading?Hastings quarterly update this morning (where I am also a holder) is incredible and whilst DGL is larger, and so a harder beast to add growth to, I suspect they are also making good progress on all KPI's and their next update, unclouded by the Ogden stuff of recent updates, could be very encouraging.Would appreciate intelligent views though.
blouson blouse
05 Apr 2017
Re: reason for rise? Thanks WJ.what is the way you keep across analysts comment and upgrades/downgrades?
WelshJew
31 Mar 2017
Re: reason for rise? Direct Line Group PLC (LON
LG) was the best performer after a JPMorgan Cazenove upgrade following the changes to no-win no-fee rules.The US bank upgraded its stance on Direct Line to ‘overweight’ from ‘neutral’, albeit with a reduced target price of 395p, down from 410p.
blouson blouse
31 Mar 2017
reason for rise? Yesterday DLG spiked briefly to 350 but fell back but today has-so far - held on to most of an even bigger gain. Anyone know why?Two weeks since going ex the 9.7p dividend it has recovered all the ex dividend drop and some- circa 4% gain in 2 weeks. My reasons for being bullish are in earlier posts so I won't repeat. But on a 3 year view I would expect a blended return of at least 10-15% pa with modest material downside risk
EssentialInvestor
23 Mar 2017
Re: Had planned to buy - Essential Inves... Hope so Pref, as I've bought some more.On a 12 month, unless wider markets plunge, risk/reward looks ok to me.As always best to DYOR.
PrefInvestor1
23 Mar 2017
Re: Had planned to buy - Essential Investor Hi,I did eventually buy yesterday at 335.6 at what I thought was close to the bottom after yesterdays drop in the FTSE. It's gone a bit lower today though, at 333.6 as I write this, but whatever - you can never catch the exact bottom. Looking at the charts it looks to me as if the bottom should be around here, unless there is to be a more significant drop for reasons not currently apparent............IMO this looks to be a solid company with good business model and prospects. Ogden rate thing is unfortunate but should benefit the most competitive in the sector and will doubtless be addressed by revisions in insurance premiums in future years. Planning to hold for the attractive dividend yield.As always fingers crossed !! DYOR etc.ATBPref
