Direct Line Insurance Group PLC's (LSE:DLG) capital markets day on Wednesday, July 10, will see a focus on three areas according to UBS, with dividends likely to be central to the discussion.
“We anticipate a progressive dividend strategy and target a c. 80% dividend payout ratio by 2026E of which we assume a 30% special regular payout to offer flexibility,” said analysts.
The Swiss bank also expects Direct Line to increase its solvency target range to 160-200% (from 140-180%) and coupled with the dividends assumed, "we expect 40% of the market cap to be distributed over the next three years".
Finally, JP Morgan expects actions to improve competitiveness and add credibility to the delivery of the cost-saving plan.
A distribution channel shift to PCWs for the Direct Line brand should enhance the credibility of the revenue base.
Shares rose 1.8% to 198.5p on Friday.