Directors have been actively buying shares in Highway with market sources claiming the shares are a bargain at 63p.

Director Nigel Cosh has twice dipped into the market to buy shares this month, purchasing 94,000 last week and 76,909 the previous week for a total of £109,000.

At the end of September Elizabeth Gamble, the wife of chairman Richard Gamble, bought 50,000 shares for £30,000 while deputy chairman Peter Salisbury also bought 50,000 shares for the same price.

The purchases came despite the insurer revealing a fall in interim pre-tax profits to £7.5m from £11.3m, which was slightly below analysts' expectations

Highway's shares have been under a cloud, with motor premiums reaching the bottom of the cycle earlier this year.

Six months ago they were trading at more than 90p, but have fallen by a third since then.

However, the AA has said premiums are now beginning to rise again, which should provide a boost to Highway.

As Insurance Times went to press, Highway had inched up 0.25p to 63p.

Heavy weight fund manager UBS has also been taking an interest in the company and on Monday disclosed that it had been buying shares taking its total interest to more than 8.1 million, a stake of just over 4%.