Direct Line News Update: Rough Ride For The Insurers

Insurance Direct Line

Direct Line News Update: Rough ride for the insurers. Since it’s listing on the stock market a year ago the company has hit several bumps in the road.

Direct Line who are the biggest home and motor insurance provider in the UK have had far from a smooth ride since they listed a year ago on the FTSE. At that time the company received a boost as the demand from the general public was strong and helped the Royal Bank of Scotland sell off almost 33% of the company before the time of the stock market listing.

But this year things have not been going so well for the insurance giant and the share price has gone down by three per cent. It is thought that this is in part due to a marked decline in the rates for motor insurance that had led several of the company’s major investors to sell off the stock that they owned. But for every cloud there is a silver lining and the new gloom that has descended has been seized upon by some investors as a buying opportunity. In particular the manager of JO Hambro UK Equity Income Fund has been snapping up Direct Line shares over the past few weeks.

Direct Line News Update

The manager James Lowen said that he felt that the rates for motor insurance would be on the rise again after a two-year period in which they have declined. He felt confident that when the shares for Direct Line started to rise again that the rise could be significant. Mr Lowen commented that he thought that the motor insurance sector had reached the bottom of the incline in earnings and that the only way now would be up. He forecast that the rates would start to move again over the next year to eighteen months. When that started to happen, he said, then shares could rise by as much as between thirty and forty percent. When that came about Hambro’s manager said, they would rather have jumped on the band wagon too early than miss the boat completely.

The success of Direct Line will no doubt be able to help it weather the financial storm and come back again. In the mean time it continues to offer its customers the very best in insurance cover across the board. It seems that the end of the bumps in the road may be in sight.

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