Direct Line float set to be priced despite insurer probe

 
David Hellier
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THE price range for the flotation of Direct Line is expected to be announced today despite news of a probe by competition regulators into the motor insurance market.

The details of the pricing, which comes a couple of days later than expected, will likely show a range that values the insurer at between £2.2-2.8bn, against earlier hopes of a £3bn flotation.

The price details coincide with confirmation that the Office of Fair Trading, the competition watchdog, is set to decide to refer the private motor insurance market to the Competition Commission, in a move that could lower driver premiums.

“We wouldn’t have written it into the script if we had had a choice,” one of the advisers on the float said yesterday.

In May, the OFT said it had provisionally decided to refer the market to the commission after it found insurers competed in a way that could “prevent, restrict or distort competition”.

The full scale probe by the commission is set to look at the provision of replacement vehicles and the provision for repair services.