Aviva Share Discussion Threads

[boystown] 30/3/2020 22:02

Well they've just given the Red Cross an "additional donation of £10 million"
hxxps://www.aviva.co.uk/services/more-from-aviva/british-red-cross-partnership/

I'm sure everyone is hugely sympathetic to the Coronavirus crisis cause, but it isn't the directors' money to give - it's ours. So if they pay the divi, we can decide if and where we want to donate.

This additional donation equates to around 0.25p per share, so isn't insignificant. It would be a travesty, therefore, if they couldn't or decided not to pay the dividend in light of this additional donation.

[whatsup32] 30/3/2020 22:01

Aviva’s Business is on line , when was the last time anyone went to an agent in a store to take out insurance for car , home or business . And most insurance is mandatory so no skimping and I would guess most would go for premium insurance with bells on it due to fear.

As for travel insurance you won’t be surprised to hear but there are a lot of things you may think you are covered for but aren’t . Their main loss will be repatriation of people that have the virus . No cover for travel ie flights , cars , hotels

Only reason for cancelling dividend would be if they had massive losses , I don’t know where that would be.

I also think they will be racking it in with car and home insurance cover. Hardly any cars been driven and homes are occupied

[edmundshaw] 30/3/2020 21:41

Companies cutting dividends have reasons for doing so - their businesses are at a standstill. Manufacturing, much retail, entertainment and travel, etc etc. Mostly financial companies are not in that position - many are still operating, insurance is still active, pension funds are still sitting there and hedging is still taking place... and mostly regulatory cpaital buffers are intact.

I cannot see a good reason for Aviva to cut the dividend right now... but never say never...

[mountpleasant] 30/3/2020 21:37

It could happen yet.
HMSO was already XD, and today they cancelled the upcoming dividend.

[cjac39] 30/3/2020 21:20

the more i hear about dividend cuts the more i think it will be pervasive. if banks and every corp using gov funds chops divs it would be a brave non exec at an ins co that sanctions a divi. nonetheless this is priced for 3+ years of div cuts but i am now not expecting a divi in june of 21p

[whatsup32] 30/3/2020 21:19

Good close USA and finally some positive news on virus . It seems deaths are stabilising and a cure may be available by next year

hxxps://www.businessinsider.com/coronavirus-outbreak-appears-to-be-slow-in-europe-and-us-2020-3?r=US&IR=T

[cjac39] 30/3/2020 12:12

of course not 100% but my point all along has been there is a chance this will positively affect annuity writers. as to the reserves point if you put a simple model of an annuity company into xls with the following assumptions you;ll see the depletion of capital : £100k, annuity outgo £5k per annum or 5% which is about the right level for 65y old male single life annuity, positive returns of 1.5% per annum which is about right for av A bond portfolio less expenses and the qx's from here ( applied to the annuity outgo to reduce this by expected deaths and you will see the capital sum depletes somewhat slowly.

[spcecks] 30/3/2020 11:56

LINTON5 agree very good update and an increase in dividend.

[edmundshaw] 30/3/2020 11:46

It absolutely won't infect 100% of the population. I might not be an expert in economics or biology, but maths yes. A population behaving homogenously, the maths of epidemics is given by the simplified equation:

1 - 𝜏 = e^(R₀𝜏)

Where 𝜏 is the final epidemic proportion. Even with an R₀ of 3 (which would imply no-one was acting differently - just carrying on as normal) 94% of the population would be affected. With a realistically heterogenously behaving population you can chop 10-20% from that number.

Get the R₀ down to 1.5 and you tend to a number closing in on around a 50% final infection rate (58% with a (non-realistic) homogeneous population). Of course that requires continued social distancing/handwashing to some degree. And new infections would continue to pop up with little surges here and there... but the NHS would cope and everyone who needed one should by then get an ITU bed...

[dr biotech] 30/3/2020 08:41

Mortality rate of 10% is also unlikely. Whilst that may be the rate if those that get infected in this age group it’s highly unlikely to infect 100% of the population.

[linton5] 30/3/2020 07:56

Very good update from chesnara today

[fenners66] 30/3/2020 00:55

I would also have thought in terms of annuity based upon a fund created with earnings for 80 year olds going back 15 to 20 years ago that the sums would be smaller .

[wba1] 29/3/2020 21:58

The FT article on US business interruption insurance is interesting. If insurers were forced to comply the effect would be to make many insurances unobtainable in the US when this is all over. No foreign insurer with a US subsidiary would write new business knowing it could be, effectively, nationalised without compensation; and most US insurers with substantial CL business would be left either bankrupt or so financially weak that they would be forced to cede business to reinsurers beyond US reach.
And a complicating factor is that insurance is regulated at state level. So any attempt to implement this nonsense would be challenged not only on contractual grounds but also on the issue of jurisdiction.

[wba1] 29/3/2020 21:47

cjac39;
could you expand on your maths for the 20% of annuity reserves being held for annuitants currently over 80? Having checked with my contacts I am told that the reserving level for the same amount of pension is approximately halved at age 82 compared to a 65 year old. This would imply that for the 80+ age group to account for 20% of all reserves, they would need to represent a much larger proportion of annuitants, which seems surprising. In an ideal world we would have reserving development triangles along with an age profile of Aviva annuitants, but I have not seen either. I appreciate that you may have dug them out of PRA returns (although I have not looked to see if these are included).

Not trying to be difficult, but I like to have as good an understanding as possible when valuing my investments and I agree that there is some potential for a positive effect in annuity reserve releases.

[uppompeii] 29/3/2020 21:26

I mentioned this a few days ago. I will personally put off drawing on my pension until there is significant recovery, far better to take cheap money out of the property in a few years time.

[spud] 29/3/2020 21:10

No chance! Gov attempting shifting fiscal responsibility . Good luck with that!spud

[cjac39] 29/3/2020 20:26

i agree, you cant rewrite law after its written and thats what would need to happen.

[whatsup32] 29/3/2020 18:55

US legal battle looms over Coronavirus insurance claims.

Seems Government will try to force insurance companies to pay businesses for their losses due to shut down even though their policy states they have no cover for it.

They are estimating $600 billion payout which would put most insurers out of business .

Most policy’s specifically exclude pandemics , if the insurer required such cover they had the option of approaching underwriters for such cover or alternatively find a provider that did not exclude pandemic.

I see little chance of government been successful in this.

[whatsup32] 29/3/2020 17:58

hxxps://www.aviva.com/investors/dividends/

Yes eeza. Remember been a month out last time so a day out is an improvement:)

[eeza] 29/3/2020 17:01

@whatsup

XD is Thurs 23 Apr.

[tfergi] 29/3/2020 16:46

The measures that they have and are taking are extreme and they have been going on for 2 months. Long way to go

[yf23_1] 29/3/2020 15:59

Things won't return to 'normal' until they test evryone and keep testing possibles to isolate new cases earlier.
By 'normal' I mean a lot lower deaths and not increasing figures. We'll just have to live wth the risk until a vaccine comes along.
How this affects air travel is anyone's guess.

[careful] 29/3/2020 15:53

Aviva is big in equity release.
After the hardship caused by the virus I would think equity release business will surge.

[whatsup32] 29/3/2020 15:34

Xdiv 24th April 21.4p , let’s see if it gets paid . I can’t see why they wouldn’t