Insurers Admiral, Direct Line tumble on premium financing woes.
Insurers Admiral and Direct Line tumbled on Wednesday amid concerns of a potential clampdown on premium financing.
Source: Sharecast
Traders pointed to a report in the Insurance Post which quoted the head of insurance at the Financial Conduct Authority as saying that premium finance was a "poor product".
In an interview with the Insurance Post, Matt Brewis warned that the regulator has "talked about it enough", hinting at potential action surrounding the practice in the next 12 months.
Brewis said he "wholeheartedly" agrees with those who label premium finance as a "poverty premium".
Premium financing is a practice whereby customers borrow money needed to pay an insurance premium and pay interest on the loan.
At 1230 GMT, Admiral shares were down 5.7% at 2,567p, while Direct Line was 5.6% lower at 169.47p.
Halifax is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
