Aviva Share Discussion Threads

[cjac39] 14/5/2020 16:24

I think it’s the reinsurers wba where the pain is more not the primaries but 107 seems high I agree

[wba1] 14/5/2020 16:21

The 2.5 to 3.5 is Lloyds claims. The 107 is their estimate of global losses across all underwriters (on the P&C side - it does not include life and health business). As I have said, I cannot reconcile the 107 with estimates from other insurers such as Allianz and Sirius (which suggest lower global numbers) and cjac has said he has a similar issue with the investment losses suggested.

[gary1966] 14/5/2020 16:01

This article says Lloyds of London say that claims will be £2.5-3.5bn but further down it says underwriting losses of $107bn and so somewhat confused by this article

[plootocrat] 14/5/2020 15:52

Azalea - increasing taxes in the midst of a recession would in all likelihood reduce the overall tax take as it would disincentivise work, investment and entrepreneurialism. I can only hope that this Chancellor shows more imagination than George Osborne and appreciates that cutting taxes and incentivising investment & the establishment of new businesses to replace those that will inevitably go to the wall, will be the quickest way out of this situation.
Also, remember that the interest being charged on these admittedly gargantuan amounts is at an all-time low.
Finally, if the government start a medium-term programme of raising taxes and cutting funding to public services in 2021 they will be reaching a peak of unpopularity when the next General Election comes around. I can't see the current crowd of shallow, self-interested narcissists getting behind that strategy. In any event, even BJ wouldn't have the brass neck to cut funding to the NHS having stood on his doorstep and clapped them every Thursday*

* Risk Warning. I have frequently underestimated the brass neck of politicians of every persuasion for over 40 years.

[neophytos] 14/5/2020 15:46

Thanks for the analysis paragraph on M&G, cjac..

Always very informative and appreciated.

Neo

[cjac39] 14/5/2020 14:32

retesting the lows again...really bizarre but i guess the market just treats these as beta driven stocks.

i know this is AV thread but i don't have bandwidth for more than one thread so excuse me but ill drop few thoughts on m&g as there is in any case read across.

m&g on the face of it is complicated but actually can be easily compartmentalized into 3 business. An annuity fund that is conservative compared to most in terms of assets (little BBB, low comm prop, low ERM etc) but in any case is about equivalent to the debt and interest and therefore can be roughly ignored. The with profit fund is worth PV to shareholder £2.7bln in their last accounts. this probably undercooks it because it is only based on whats their today and not where it could go and note that over the past few years the runoff has been covered by new biz flows and inv returns albeit that wont happen this year (but they do have extensive hedges on the sh flows). lastly the asset manager which has c£150bln external assets including a very impressive 125 or so in institutional. these are not etf index funds - most of these are active good strategies which carry higher fees. Therefore a valuation of 2% of AUM would be cautious for sure. therefore i can get to 6 quite easily for M&G and it is cash generative and well capitalised and the mkt effects for them are minor at best. so for me its looking decent down here but of course what do i know it will be below £1 again in not time.

[azalea] 14/5/2020 13:52

According to Morningstar data, there is only one major-3%+ holder. The last significant director's purchase as in 2019. With no directors buying since then despite the share price approaching its 5-10 year low; one P.I must draw their own conclusions.

[eurofox] 14/5/2020 13:47

added at 222.5

[spud] 14/5/2020 13:45

Happy to have picked up an additional 5k shares on a limit order whilst food shopping. spud

[neophytos] 14/5/2020 13:40

Thanks all, pete160, yeah it's equally annoying when it goes the other way and you miss the opportunity.

cjac39 - please do relay later the outcome of you M&G chat, as I don't mind adding more at current price but if we feel this will slide down more, i'm happy to wait. Thanks.

Neophytos.

[this_time_its_different] 14/5/2020 13:00

What a dog, never has a bunch like BT, Centrica and Aviva destroyed shareholder capital

[dbadvn] 14/5/2020 12:04

Time in the market, not Timing the market makes money . If you buy the right stock you will be ok.

[dr biotech] 14/5/2020 11:55

Think we have all been there Neo - I've certainly had my fair share of losers and bad timing.

[cjac39] 14/5/2020 11:51

sorry to here that neop! its certainly cheap but can get cheaper. I've got call with M&G later so will let you know . on sotp basis its arguably cheaper than Aviva and if anything less risky but market is hating insurers this week.

[azalea] 14/5/2020 11:39

Dodge Meister -25287

When did the BoE forecast the scenario of lost ground being recovered by mid 2021. If you mean financial and employment numbers?

In my view, not a hope in hell. 2021 should see a rise in income tax and a halt in State pensions, if not a rise in fuel duties. Somehow, he has to get back the £300, Billion he has spent in the overall fight against COVID -19.

[pete160] 14/5/2020 11:35

neo - and I thought is was just me that had the curse, although even more annoying /expensive it seems to be that when I sell, the darn thing goes through the roof. I sold out entirely of sky before it doubled and more recently I reduced my stake in GVC before it then put in a strong recovery.
I never like selling for that reason but sometimes needs must.

[eurofox] 14/5/2020 11:23

neo, could you buy some more here

[essentialinvestor] 14/5/2020 11:22

cyberian, appreciate the view, thanks.

Would be good to see a few of the BOD adding.

[milliethedog] 14/5/2020 11:05

neo...
Could you just give us an idea of what you intend buying into next?

....might be in it, so will give folks chance to sell first.....lol

[cyberian] 14/5/2020 11:02

EI...agree about the current market momentum but AV. is on a very low PE ratio and has a much better reserve ratio (Q2) than LGEN especially after the Divi was pulled, unlike the latter. Insurance/Pension markets are here to stay, unlike some other sectors, and a divi here will likely be re-introduced later this year. I got out of IAG at around 630p when I saw the first China warning and my first reaction was the effect/impact on global trade/travel etc. Now it looks like we have to accept that this virus is something we will have to live with like HIV according to the latest comment from the WHO. HIV has been well treated by drugs...not sure if WHO have drawn the right comparison, and hopeful that the global Pharma companies will find a workable vaccine fot this virus strain. cjac39 is on the ball, I think,so many thanks for some reassurance.

[wba1] 14/5/2020 10:29

Thanks for that cjac. I had missed the previous global estimates for the underwriting hit. But I still have some problems seeing it being that high. $107bn would be circa 50% of annual reinsurance premium globally and the individual estimates I have seen are much lower (eg Sirius at about 10%). Add in losses at primary level and I still cannot see $107bn. After all, the Allianz estimate is losses of circa 1 billion euro, which is 2% of its P&C premium. I agree about conservatism in claims reserves and could not see the scale of losses suggested (other than on a mark to market basis at any point in time - which means nothing in the real world).

[essentialinvestor] 14/5/2020 10:28

All this is by the by, as if markets are heading down again AV. is unlikely to be spared.

[neophytos] 14/5/2020 10:28

cjac39

I know this is the Aviva thread but it's a continuation of prev discussion...
So yesterday I jumped on M and G (£5k worth) at 125p on the nose. It was relatively stable, going up and down a just few pence for a while... the moment i hot the order button, then it all went south. Now its down to 114p. That's a classic for the kind of luck I have.. I tell you, with timing like mine, you don't need enemies!

Just thought i'd share that anecdote.
Neo.