Aviva Share Discussion Threads

[sam9092] 19/5/2020 11:09

Initial estimates were between cad400mn - cad800mn for 9000 dentist policyholders. Morgan Stanley indicate max CAD 400mn. Compared to Hiscox exposure of GBP40m is a lot of money.

[waterloo01] 19/5/2020 09:29

I thought the loss was capped by re insurance or is that as yet unknown?

[wba1] 19/5/2020 09:16

pvi1; and they were talking rubbish. As a former underwriting director I know full well that they have been receiving estimates of impact (at least on loss ratio) from very early days. I repeat that if a company like Allianz can pull together an impact estimate a month before Aviva then something is wrong with the board. And if a gross loss of probably in excess of 500m C$ does not merit comment when it is being leaked all over the insurance press then I do not know what does.

[tygarreg] 19/5/2020 05:58

I know that car accident repairs have been right down to minuscule levels for two months. They will start climbing now but the insurance savings in payouts will be significant.

[pvi1] 19/5/2020 05:05

It remains too early to quantify the impact of COVID-19 on claims expenses in our life and general insurance businesses, and the potential effect of capital markets and economic trends on our results.  Given the change in the economic outlook, we are reviewing all material discretionary and project expenditure.  We intend to provide an operational update for investors in the second half of May. They've been clear enough. We'll get an update very soon.

[wba1] 18/5/2020 22:42

pvi1; it may have something to do with the absence of any reasonably detailed update from the board on the impact of the current situation - unlike companies such as RSA, Direct Line and even Sabre and Hastings. On a less parochial scale the likes of Allianz and Axa have given clear steers on the impact despite having much more complex operations to look across. It comes to a thing when it was necessary to pick up the news of the Canadian dental scheme problem from press reports.

[pvi1] 18/5/2020 22:22

Aviva doesn't give a toss about shareholders. Explain that statement

[dr biotech] 18/5/2020 21:02

According to IG the update will be Thurs.

Not sure where they got their info from, Aviva website not a great deal of use. But Aviva doesn't seem to give much of a toss about shareholders. Think I will look at the RNS from behind the sofa - really doubt the boards ability to communicate.

[wba1] 18/5/2020 17:57

Low rates do hurt P&C but there are two benefits to offset. Firstly (as we have discussed before) there are really substantial loss ratio benefits on some lines, especially motor. Direct Line estimated a 70% reduction in motor claims numbers in April and my estimate of the loss ratio benefit on motor, based on recent reports and a gradual traffic return, has gone out to 15 points from my initial 10 points - so £150m to the bottom line for every £1 billion of motor earned premium. DL also reported lower household claims (albeit with caveats) and some commercial risks such as liability will also benefit. The second offset is a consequence of the reduced personal injury (PI)claims from motor (and liability). Claims reserves are typically held for less than a year on non-PI claims (known as short tail business) so those lines carry limited claims reserves to be hit by reduced investment return. The big claims reserves occur on PI claims, and the amount of reserves for each accident year declines going back in time. The effect of the sharply reduced PI claims this year will be to reduce claims reserves going forward, giving less exposure to reduced returns. This benefit will be principally felt after 2020, maxing in 2021 and reducing thereafter.

Not sure how this will all balance out long term but I fully expect the immediate loss ratio benefit to outweigh all other effects, including the net loss ratio hit on things like the Canadian dental fiasco and travel.

[waterloo01] 18/5/2020 17:17

I'm building a decent long term holding here. Thankfully from the earlier lows. At some point the liabilities will be seen as quantifiable and hopefully once they have looked behind the sofa, they can reinstate the divi. Maybe one that makes up for the missed one, assuming they come out OK.

[eurofox] 18/5/2020 16:41

very profitable few trading days - core holding remains intact

[cjac39] 18/5/2020 14:50

yes low rates hurt P&C companies especially so will impact Av's general business. UK life mostly insulated from it in terms of rates with the TMTP but for Av i think it hurts a bit in France and Italy gteed int rate products.

[waikenchan] 18/5/2020 13:21

Just an interesting point insurance Co listening to the Berkshire shareholder meeting.

Declining profitability due to low /rate interest rate environment on future profitability.

[ftime] 18/5/2020 12:30

When do you all think we will receive the promised 'operational update?' Surely this will be before the AGM? My guess is Wednesday or Thursday this week.

[ianood] 16/5/2020 18:13

Agreed, and as you pointed out the attitude to mtm is very adult. Thanks again, I for one feel happier.

[cjac39] 16/5/2020 18:06

we ended up loaning to owning a bloomin car wash business it got so cheap! anyway we digress but its illustrative of how in my view whilst the economic data presently is horrible this is way off the gfc outcomes. indeed having studied the science of this i think there is a more than reasonable chance this just blows through from here

[ianood] 16/5/2020 17:55

Yes, particularly if you had a large position in the underlying :)

[cjac39] 16/5/2020 17:47

Yes we used to get 3-4 a day from jpm with yet another hedge fund blowing up. Fun memories now but quite stressful at the time trying to stop a massive clo blowing up

[ianood] 16/5/2020 17:38

cjac39, I do remember them but was not personally involved. From what I recall they were very much the forte of the large investment banks. UK and European banks had all but been wiped out and capital was too precious.

[panshanger1] 16/5/2020 16:43

Spud Not very PC of you !!

[cjac39] 16/5/2020 13:13

Ianood you must also remember the relentless bwics coming out early 2009! Crazy times and for me quite unlike today so long as fed sits on the money and credit mkts

[salver2] 16/5/2020 12:58

Can anyone explain why legal and general which is itself undervalued but appears to be a tad less secure has a twenty percent higher market cap and thirty percent less earnings before tax on the next two years forecasts- is this purely because they pay a dividend- if you apply legal and generals miserable pe of 6 times earnings you get to a share price of north of 3 pounds - surely a normal pe of 8 - 10 times earnings- normal that is unlike some tech cos with 50 times earnings- an 8 pe would put these over 4 pounds and ten times earnings over 5 pounds - barring unknowns are these not near enough half price - yet still there is no bottom?

[edmundshaw] 16/5/2020 12:23

Yes, solvency II was not all bad...