Vehicles on the M4
(Picture: PA Archive)Admiral and Direct Line are expected to reap the benefits of Brits returning to the road, post pandemic.
Investors are being advised to up their holdings in the FTSE-listed insurance firms as analysts anticipate more claims and higher insurance premiums.
The UK motor insurance market had shrunk during the pandemic, while fewer claims were made, and many insurers issued part refunds to customers forced to furlough their vehicles during Government-instigated lockdowns.
In a note to investors, Barclays said Admiral was well placed to profit from an expected increase in claims frequency. Admiral was up 2.58% at 2,601.5p.
Although Direct Line’s business model makes it more vulnerable to customer churn, its shares were also up 0.14% at 276.5p.
While insurance rules introduced earlier this year were expected to drive down the cost of car insurance, insurance premiums for younger drivers have jumped nearly £100 since July 2021.
Optimism for a diplomatic solution to the war in Ukraine with Russia dropping its baseless demands for Ukraine’s “denazification” helped to lift sentiment on the FTSE 100 which was up 71.93 points at 7,545.07.
Oil prices were also slightly up with Brent Crude rising 0.3% at $112.94 as markets sought reassurance a lockdown in Shanghai might not be so devastating in terms of supply issues.
Betting firm 888 rose 0.74% at 190.3p following confirmation of the joint venture 888 Africa with five “industry veterans”. The online betting and gaming company explained that it has invested a minority stake in the joint venture, which will expand its brand in Africa.
Miner Rio Tinto was down 1.38% at 116.84p despite completing its $825 million (£630.5 million) acquisition of the Rincon lithium project in Argentina.
The London-based miner had announced it was buying the project from Rincon Mining in December. Rio Tinto explained that the project is a long life, scalable resource capable of producing battery-grade lithium carbonate.
Property firm McKay Securities is apparently being wooed by Slate Asset Management, whose competing bid comes as McKay contemplates Workspace’s £272 million cash and shares offer.
Slate was reported to be considering a cash offer for McKay, although no formal bid has been made. McKay said if Slate made a bid it would “carefully consider its terms” but that it continued to “recommend unanimously” the Workspace bid, which is subject to a shareholder vote on 27 April. Slate has until 20 April to announce whether or not it plans to make a firm offer for McKay. Shares rose 3.52% to 294p.
Barclays was also a FTSE faller, down 3.45% at 154.94p. The bank was forced to delay a share buy back plan after issuing more exchange traded notes in the US than it had permission to do. The mistake, which took place in 2019, is being investigated by US regulators.
