Car insurance premiums set to soar says Credit Suisse as it upgrades Direct Line

DATE: August 8, 2017

AUTHOR: admin

Premiums for motor insurance have hit record highs recently, which is bad for motorists but good news for Direct Line PLC (LON:DLG) says Credit Suisse.

Upgrading its rating on the insurer to ‘outperform’, the Swiss broker predicts more misery for drivers as it expects motor premium rates will jump by 9% compound over the next three years as claims continue to rise.

By comparison, home insurance rates are tipped to stay flat as competition intensifies.

For investors, this motor/home trend is broadly favourable says the broker though along with the upgrade to Direct Line it downgraded Esure PLC (LON:ESUR) to ‘neutral’ on the back of strong share price gains recently.

One uncertainty is the timing of the changes to the whiplash thresholds, which may curb the rise in premiums though the broker still expects rates rises to outpace claims inflation.

Admiral PLC (LON:ADM) is its major dislike as it is fully priced, while on business fundamentals Credit Suisse sees RSA PLC (LON:RSA) and Hastings PLC (LON:HSTG) as the most appealing.

Direct Line shares rose 1.4% to 366.4p while Esure eased to 293.1p.

 

source http://www.proactiveinvestors.co.uk/companies/news/180764/car-insurance-premiums-set-to-soar-says-credit-suisse-as-it-upgrades-direct-line-180764.html

CATEGORY: Uncategorized


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