Aviva Share Discussion Threads

[waikenchan] 19/4/2020 10:39

Anyone have an idea of the credit quality of avaias assets. Read an interesting article about credit derivatives eg clo and dodgy investment grade bonds which have a significant credit risk.

This will aafecr their solvency ratio if they have a take write down on the collateral I assume?

[whatsup32] 19/4/2020 10:25

Sunday times.
Critical article on L&G executive pay. Article says Aviva executives will not receive bonuses this year and salaries frozen until dividends restart.

Also an article ‘Insurers need a deal’

[eeza] 18/4/2020 14:57

Capone was in the wrong 'profession'.

[wba1] 18/4/2020 14:41

I notice that several of the ambulance chasing law firms are showing an interest in BI claims. Whilst I do not see any great risk from such activities it annoys the hell out of me. Too often I have seen claims departments settle because the cost of going to court, against a straw man represented on a no win no fee basis, is higher than settling (knowing no costs will be recoverable). Such parasitism could be easily stopped by judges if they awarded indemnity costs against the solicitors for the claimant in the case of obviously futile cases which are only taken in the hope of a settlement before reaching court. The judges have such powers. They just adhere to the Law Society ethos of supporting its members at all costs.

[salver2] 18/4/2020 13:06

That will be an interesting conversation unless somethings untoward I can’t see how the shares are this undervalued - they could be almost double and not overvalued

[dbadvn] 18/4/2020 11:45

Thanks cjac39.
That will be an interesting conversation, possibly crucial.
A real litmus test for management.

[dbadvn] 18/4/2020 11:45

Thanks cjac39.
That will be an interesting conversation, possibly crucial.
A real litmus test for management.

[coxsmn] 18/4/2020 08:14

BBC News - Coronavirus vaccine: Target of a million doses by September, scientists sayhttps://www.bbc.co.uk/news/health-52329659

[waikenchan] 17/4/2020 20:34

Good thing they aren't paying the dividend then!

[cjac39] 17/4/2020 19:47

Yes. They didn’t mention Canada at time but that was their estimate overall. I’ll get update in next two weeks as have call booked with them. It seems lost to the share price that credit spreads have recovered enormous ground since the lows of third week March which will have made back multiples of their underwriting losses. Crazy mispriced world we live in

[wba1] 17/4/2020 19:28

cjac39;
thanks. I assume the £150-200m (which I agree is no problem) is a net figure if the Canada reports are right?

[cjac39] 17/4/2020 17:33

I had a run through with the company a few weeks ago and they threw out a number of something like £150-200 on business interruption as an early estimate and of course the positives take longer to manifest through reduced claims. Im going to catch up again in few weeks and they should know more now but it’s really not a big deal and certainly the share price fall is not based on any sensible fundamental assessment of losses they’ve incurred

[waterloo01] 17/4/2020 17:15

wba1 thanks.

[wba1] 17/4/2020 17:14

cjac39;
thanks for that. $2.3 bn should be more than enough unless they have written a whole shedload of similar schemes! I would still like to know what their reinstatement clause says.

[cjac39] 17/4/2020 17:07

WBA article says they have global cat tower of $2.3 non with Canadian retention c$50

[wba1] 17/4/2020 16:53

There seems to be another threat on the horizon. See hxxps://nationalpost.com/pmn/news-pmn/canada-news-pmn/ontario-allows-auto-insurance-companies-to-provide-rebates-due-to-pandemic
It seems Aviva and others are already offering motor premium rebates to policyholders and that dodgy politicians (NDP in the article refers to the New Democratic Party) are seeking to retrospectively change contracts to provide a 50% rebate. All this despite the fact that Canadian auto has been loss making for years.

Putting Canada up for sale when this mess reduces looks like a more and more attractive option.

waterloo;
Direct Line do write a bit of commercial business and could have a little exposure, but only if they made basic errors in policy wordings, which seems unlikely. As far as I know they do not have any large schemes which could be exposed. Admiral are exclusively a retail operation as far as I know, so any business covers will be limited to use of domestic insurances (car/property/travel) for business use. This should mean any exposure is non-existent or trivial. And they are backed by and lay off most of their risk, to Munich Re - who are probably the most professional reinsurers in the world.

[waterloo01] 17/4/2020 16:51

As an 'outsider' ie not invested but interested, I don't think it's a bullet I need to dodge. I'll let the company clarify as wba1 suggests. Need to understand the liability.

Assume companies like Admiral or direct line are unlikely to have similar COVID cover issues?

[whatsup32] 17/4/2020 16:43

USA Dollar buys 1.40 CAN Dollar for reference

[whatsup32] 17/4/2020 16:37

wba1.
My bad, thanks for correcting

[wba1] 17/4/2020 16:29

whatsup32;
I think you have misinterpreted the cover. It is for $1000 per day up to a £20k max (unless they opt for a higher limit). This means they hit the policy limit after 20 days closed. With the numbers in BC and the much higher number of dentists elsewhere the exposure certainly runs well into 9 figures and the impact on Aviva is dependent on their reinsurance cover - hence my previous questions.

[whatsup32] 17/4/2020 16:22

This really isn’t much of a news. Maximum payout is CAD20k per annum or if you paid extra it’s CAD100k per annum . If close down is 3 months it’s only a third Aviva is liable for.

In the grand scheme of things , not a big deal

[wba1] 17/4/2020 16:20

Three points;

The $36m refers only to British Columbia and derives from multiplying 1800 BC dentists by the policy limit of $20k. The reason for the BC focus is that Aviva attempted to repudiate BC claims (whilst admitting them in other provinces) because of the local wording of the order. In addition to this $36m Aviva have already accepted their liability under policies sold in other provinces. The $20k is also misleading. Whilst it is almost certain each policy will hit the policy limit, the policies also contained options for dentists to increase the limit to $50k or $100k. So I would guess the BC liability alone will be nearer $50m.

Secondly; I have not seen the cover above $50m mentioned by cjac39 but am sure he is right. Retention of the first $50m feels about right. However my question would be how high does the cover go to? Unlimited reinsurance is possible but unusual. If they have placed layers up to, say, $200m that is very different to having protection up to, say, $1 billion. The related reinsurance questions are whether the cover is specific to this policy or class, or whether it aggregates liabilities under different policies, classes or even countries. Finally, does the reinsurance have adequate reinstatement to deal with further waves?

Lastly; is the dentist policy unique or does Aviva Canada have similar exposures on schemes for other professions?

I do think Aviva need to clarify these issues as a matter of urgency. If reinsurance cover is limited or set up to cover a wide range of business the potential loss will be large, and certainly big enough to require an RNS under the rules.

[waterloo01] 17/4/2020 15:58

sounds like an insurance company.

[cjac39] 17/4/2020 15:57

is a funny story though and I suspect they will get in trouble for it. denying claims because the wording of a govt notice on shutdown didn't comply with policy terms...

[waterloo01] 17/4/2020 15:34

Oh that makes sense hence the reinsurance