Aviva Share Discussion Threads

[spud] 26/3/2020 11:20

Aviva pays out £21m on Friends Provident advice claims


By Duncan Ferris 25/3/20

Aviva has paid out £21m to customers affected by historic unsuitable defined benefit transfer advice in 2019, its annual accounts have confirmed.

The insurance company said it had a £229m provision for the “product governance issue” relating to defined benefit advice given to Friends Provident customers.

This figure was £21m below the £250m provision from 2018 and concerns advice given by Friends Provident between 1994 and 2002, before it became part of Friends Life and was snapped up by Aviva in 2015.

The company said: “We have completed a thorough and detailed review of the suitability of the advice given, and we will ensure that no affected customers are financially disadvantaged.

"There has been no significant change to the provision estimate or estimation methodology since 31 December 2018.”

Aviva commented that the issue was not expected to affect any other part of its business, adding that the group had notified its professional indemnity insurers and intends to make a claim on its insurance to mitigate the financial impact.

Aviva also reported a pension surplus of £1.98bn at 31 December 2019, down from £2.56bn in 2018.

This decline was due to liabilities jumping from £15.52bn to £16.79bn over the same period, though this was offset slightly by total pension scheme assets coming in at £18.77bn for the year, up from £18.08bn at the same point 12 months prior.

Aviva explained that the primary reason for the reduction in surplus was the bulk annuity buy-in transaction completed by the Aviva Staff Pension Scheme with Aviva Life & Pensions, which saw the premium paid by the scheme exceed the valuation of the plan asset recognised.

spud

[w1ndjammer] 26/3/2020 10:43

Peter Hitchens attacks coronavirus lockdown

WJ.

[montyhedge] 26/3/2020 08:55

When a share has fallen this much, when they go ex div, I reckon hardly any adjustment down, so in effect up on the day, bought a few for the isa dividend tax free of course.

[ialwayswinatmonopoly] 26/3/2020 08:21

I think AV. Will go sub 200 at ExD

[carpingtris] 25/3/2020 20:43

When they see what might happen in the next couple of weeks that'll shock them into line!

Unfortunately they will learn the hard way.. but there is hope that it can be beaten.

[lako42] 25/3/2020 20:36

You must be living in a fairyland chaps. How do you trace an entire nations home testing regime?

We can't even drill it into the thick British public that they should stop all non essential trips from home.

[carpingtris] 25/3/2020 19:55

If home tests work and cases are fully traced and isolated then could be a way out of this mess... globally all were caught out.. but China and South Korea are doing a grand job so far and it gives hope!!

But they cannot become complacent!

[cjac39] 25/3/2020 18:10

yes 15 min home tests and we are home and hosed

[spud] 25/3/2020 17:57

I hope you brought a sleeping bag - Might be a long wait chap. spud

[lako42] 25/3/2020 17:54

On the back of the last two days fickle rises, I have decided to take a wholly negative stance.

These rises will be nothing in contrast with the economic collapse that we are about to see on a global scale.

I am not buying anything at the moment, anyone who thinks the bottom has been reached and that this is some sort of reversal I believe to be wrong.

Now I'm not saying I'm right, I'm not that egotistical. I'm gambling on an outcome, the same as everyone else. I might miss the ferry as it loads up with gold and sails into the sunrise, but either way I'll stand on the Dock with my cash and wait for the next boat.

[cassini] 25/3/2020 15:50

Greta's probably sitting in bed repeating 'How Dare You!' to the Wu Flu ;0)

[cool hand kev] 25/3/2020 13:53

I think that Charlie Boy and Mumsy are more than two meters apart :-)

[crossing_the_rubicon] 25/3/2020 13:27

@Spud

I'd be more worried about Her Maj or Philip catching it myself.

[spud] 25/3/2020 13:23

I think Prince Charles contracting the virus will be a defining moment as he is such a high profile person and the media will be all over it. If he recovers quickly and with little side effects, then I think people will view the current hysteria in a more positive light. We shall see. spud

[wba1] 25/3/2020 10:48

Crossing_the_Rubicon;
I agree at this point. Of course, the increase in spreads will also benefit the profitability of deals like the insurance of the Coop pension scheme which was only announced in January.

[crossing_the_rubicon] 25/3/2020 10:20

@WBA1
Rather there was no pension holiday because the good times can change very fast.
Best to keep paying into the pension fund imo..build that surplus - ensure black swan events are hopefully adequately catered for.

[wba1] 25/3/2020 09:39

My point in raising the Aviva pension fund surplus (and probable increase in that surplus since 2019) was to wonder at what point a pension contribution holiday becomes sensible. Clearly such a move would benefit the bottom line. Probably not something to announce today (bad PR), but the surplus position clearly makes it an option if needed.

[fenners66] 25/3/2020 09:29

The initial fiscal stimulus helps, but that will add a lot of debt to a lot of balance sheets.
After people get back to work , is when the real test for companies begins.
That could lead to the financial shock when companies start defaulting.

[cjac39] 25/3/2020 09:21

yes and they are annuitants > 65 in the p fund.

comparisons with 08 are bit simplistic I think. in 08 it was the insolvency of banks and insurance companies that caused the repeated cycles of down together with credit spreads blowing out to unbelievable levels on IVG. neither of those are true here and between the stimulus of 35% of global GDP between fiscal and monetary together with specifically the central banks buying credit and ETFs they will avert a similar down.

[wba1] 25/3/2020 09:07

One interesting issue for Aviva is the position of its own pension funds. In 2019 they had a surplus of £2.8 billion. This morning United Utilities, in its trading statement, noted the benefit to pension funds of the widening credit spread in the bond market so I would expect the Aviva surplus to have similarly benefitted from this development. This represents a further positive element for Aviva's financial position.

[tfergi] 25/3/2020 08:39

I honestly think that we will see sub 4000 FTSE.2008 had these rises but the bottom wasn't reached for ages

[creme de menthe] 25/3/2020 08:33

Financials seem to be well up today, so perhaps catching up with the market bounce. Can't see the ftse holding this level into next week though.

[tfergi] 25/3/2020 08:21

Not quite that. I'm heavy on finance shares that have hit me hard. It includes my SIIP which I don't need for a while, I can ride it but I will be gutted if dividends are majorly cut. That's the major advantage of holding through a bear market for me - hoovering up all those low share prices with dividend re investment