Are these 2 car insurance stocks a good buy for 2022?

Highlights

  • Overall average car insurance premiums dropped by 0.6 per cent to £782 during the period between August and November 2021.
  • The over-50 age bracket saw a rise of 0.6 per cent, while those aged between 25-49 saw a fall of 0.5 per cent in their car insurance premiums.
  • Some regions also saw an increase, with Scotland’s average car insurance premium cost rising by 1.8 per cent to £516, amongst other areas.

The average car insurance premiums fell, by about 0.6 per cent, between August and November 2021, some age brackets and regions in the UK faced a rise in the costs, according to the latest research by market intelligence company Consumer Intelligence.

Average car insurance dropped to about £782 during the period, which is still roughly 20 per cent below the high reached in 2017. Yet, the average premiums rose by 0.6 per cent between Aug-Nov 2021 for those aged over 50 years. The annual car insurance cost for this age group was at about £350. However, those aged 25-49 years saw a drop of 0.5 per cent during the period.

Meanwhile, certain geographic areas also saw a rise in the average car insurance price. Some of these regions included Scotland which recorded a rise of 1.8 per cent to an average premium of about £516, East midlands which saw an increase of 0.6 per cent to about £688 and more.

Given this context, let us take a look at 2 FTSE listed car insurance stocks in the non-life insurance sector and their investment opportunities:

  1. Direct Line Insurance Group PLC (LON: DLG)

Direct Line Insurance Group is a UK-based insurance company offering motor, home, and other forms of insurance. It belongs to the FTSE 250 index.

The group’s Q3 2021 gross written premium in motor stood at £440.9 million, down by 1.4 per cent from £447.2 million in Q3 2020.

While its Q3 2021 total group gross written premium stood at £857.1 million, up by 0.7 per cent from £851.5 million in Q3 2020.

DLG’s Q3 total and Motor gross premium detail

© 2022 Kalkine Media®

The group’s shares closed at GBX 297.70, higher by 5.10 points, or 1.74 per cent on 11 January.  It had a market cap of £3,961.53 million as of date.

Comparatively, the FTSE 250 index stood at 23,028.18, up by 26.37 points, or 0.11 per cent.

  1. Sabre Insurance Group PLC (LON: SBRE)

Sabre Insurance Group is a UK-based motor insurance group. It belongs to the FTSE All-Share index.

The group’s gross written premium (for the 9 months ended on 30 September 2021) stood at £126.7 million, compared to £139.2 million in the year before.

During the period, its net earned premium was £108.8 million, compared to £127.3 million in the previous year.

SBRE gross and net and net written premium

© 2022 Kalkine Media®

The group’s shares closed at GBX 198.20, up by 5.60 points, or 2.91 per cent on 11 January.  It had a market cap of £495.50 million as of date.

Comment


Disclaimer