The insurer’s shares closed up on the first day of trading – good news for the industry

Great news for Direct Line Group and it’s flotation yesterday, trading well above net tangible asset value. The stock closed at 188p, 7.4% up on the offer price of 175p. There’s still a long way to go, but at least initial fears that Direct Line Group’s stock would tank on opening have been dispelled.

The stock has been buoyed by USA fund managers snapping up the shares – that’s where the real money comes from in helping companies float. This is greatly encouraging for other wannabe floaters such as UK private motor insurers Esure and Hastings. It’s also good news for Lloyd’s firm Hyperion.

Being a hybrid broker/insurer with a worldwide commercial footprint makes Direct Line Group a very different animal to UK car insurers. The fact that US fund managers have shown such a great appetite and seen the stock appreciate will likely lure them into investing in other UK insurance firms when they float.

But let’s not get carried away. Things can head south very quickly on the stockmarket – Facebook is a good example. But so far, so good.

Continue to support fraud fighters

Good to see a cash-for-crash fraudster jailed for four-and-a-half years today.

AXA, The Insurance Fraud Bureau and the police worked closely to snare accident management boss Asif Mallu. The more that insurers co-operate with each other on fraud to help the police, the more fraudsters will be caught and a strong message sent out.

The IFB, the Insurance Fraud Register, Motor Insurers Bureau and the Insurance Fraud Enforcement Department are proving valuable organisations in fighting crime. Let’s hope the industry continues to invest in them.