Aviva Share Discussion Threads

[1robbob] 26/7/2020 13:03

Catastrophic events are usually good for Insurance: The need for Insurance is emphasised, Rates harden and margins rise. As you say good news until new capital enters the market, causing downward pressure on rates and margins. If only QE didn't continually reduce long term yields resulting in pressure on Solvency ratios on long tail lines.

[harleymaxwell] 26/7/2020 12:45

last time we had a catastrophic event that affected multiple lines of insurance was world trade centre and rates went through the roof for 2/3 years until new capital came into the market - think we will see similar here

[samwn1] 26/7/2020 12:24

One of my motor policies went up 20%. £125 to £150, still better than I could get elsewhere.

[harleymaxwell] 25/7/2020 11:01

I agree . Claims costs shud reduce too less driving less burglary people at home etcThink a merger with another big boy could happen improves balance sheet etcThink capital will be the biggest challenge for insurers going forward cost of it and amount needed to maintain solvency levelsLet's see

[1robbob] 25/7/2020 10:10

Surely that is significantly good news on the hardening of premium rates and should give the board reassurance in paying last years' and this years' divis. RSA should set the trend with their Interims on Thursday

[cjac39] 25/7/2020 10:04

And if that’s the case now is also the best time to invest in insurance

[harleymaxwell] 25/7/2020 09:57

Well I'm an underwriter on the reinsurance side and increases of 25-40% were not unusual - my buildings insurance has just been quoted with a 25 % increase no losses, !The market is on a significant upward rerating curve

[action] 24/7/2020 15:39

This is not participating in uptick but never fail you in downtick.

[sam9092] 23/7/2020 11:19

AVIVA increasing all their motor & property rates by 5%. Definitely a harder market.

[cjac39] 23/7/2020 10:28

That’s interesting edshaw. I’ll take a read. I’ve been trying to understand immunology and it’s really really complicated. Insurance companies are much easier

[1robbob] 23/7/2020 10:24

Does anyone have any information of current premium rates, ie hardening or
softening since Covid and the potential impact on Aviva

[cjac39] 23/7/2020 10:20

hxxps://www.bloombergquint.com/business/swiss-re-posts-1-1-billion-loss-in-first-half-on-covid-claims

That’s low. Augurs well for primaries

[leedslad001] 23/7/2020 10:06

No it's a really poor share price performance. Need to be split up or taken over

[edmundshaw] 23/7/2020 09:42

@cjac you will enjoy this article:
hxxps://www.theatlantic.com/science/archive/2020/05/covid-19-kids/611728/

Essentially, scientists started out hypothesising more ACE2 receptors were a bad thing as that was the virus entry point into cells, and only later realised the opposite was the case (essentially because the main severity of the disease is not breathing problems but inflammation and clotting, which ACE2 receptors counter in several ways; I have a keen interest in molecular biology, so have been following this learning process in some detail). Kids have MORE of those receptors, which is actually a GOOD thing.

[uppompeii] 23/7/2020 08:54

This really isn't recovering well as everything else.

[cjac39] 22/7/2020 20:29

Edshaw for once I agree with you. It is spilt milk.

They missed all the data available since feb and beyond to avoid lockdown and lockdown is now provably unnecessary but the damage is done. The direction is set, the masks are on, they are irrelevantly testing children and thousands of people.

More importantly for this board is what is economic outturn of this.

Personally I think second wave super unlikely for same reason first wave collapsed without interventions being required - cross immunity and asymptomatic cases and children not having receptors for virus to attach to and excess T cells stopped it naturally. Given more immunity built now and excess deaths have left the field it has much less chance to take hold again. 1918 second wave was a mutated virus but influenza affects everyone undera certain age (in that case since 19th century Russian influenza) but as I understand it that’s not so clear a coronavirus will do that.

So for me macro picture is orientated into no second wave.

However there are clearly economic impacts from first wave that still haven’t been felt and also the reasonable chance that govts freak out with next seasonal flu or other virus and we have second lockdown frenzy.

I think former for me has grown in concern particularly around metropolitan areas like London. So many companies are saying no one back in earnest till 2021 it could be devastating. Latter looks less likely given damage first lockdown will have caused that we will be stressing about 7-10mln unemployed rather than seasonal illnesses.

[harleymaxwell] 22/7/2020 15:40

got to think M & A is likely in this segment - more capital needed probably post Covid will force the hand of some - maybe RSA and Aviva get together or the reinsurer + insurer model kicks off - interesting times in this segment

[edmundshaw] 22/7/2020 13:14

All the comparative data on deaths and cases is dodgy - not comparing like with like, and a lot of the numbers are suspect anyway. But it is all spilt milk/sunk cost (of lives sadly), and the future is much more important.

I saw something yesterday that is very hopeful (e.g. for kids going back to school). IF PHE and other decision makers can actually do lateral thinking and are prepared to admit they were wrong: CHEAP tests (less than £1 per test, results in 10 minutes) would enable kids to check themselves with saliva each morning before going to school (and adults before going to work). The downside is supposedly the low sensitivity of these tests (not much better than 50%) though the specificity is good. But the point is that the vast majority of the antibody load that this test misses are small loads tha almost always come from a recovered infectee (small loads very quickly escalate to large ones after infection, so the small load window is only a matter of hours). Thus the missed cases are not important from the point of view of infection control. It is this aspect that has been missed until outlined out in a very recent paper.

[edmundshaw] 22/7/2020 12:43

My apologies, I mistyped UCL for ICL. You are correct UCL is a good college (I actually attended KCL as an undergrad, but a long time ago...)

[cassini] 21/7/2020 23:39

The Imperial College simulation showed 'up to 500,000' deaths. Well I suppose that covers all other eventualities down to zero deaths as well, so technically, not wrong...

Ah, but the lockdown saved us! Well, the Swedish experience doesn't seem to bear that out. Work and restaurants, bars etc stayed open. Only mass events were cancelled yet they fared better than the UK. Plucky little Belgium on the other hand went at lockdown hard and early, the full business, flying drones to check on people etc. Even worse results than the UK. I wonder if the computer model can explain all these differences? The fact is, you can get anything you want out of a computer model depending on how you tune it, if it is modelling a complex system.

Back in the sixties a young Freeman Dyson went to see Enrico Fermi, the great physicist to present his paper on a new sub-atomic theory to explain an observation. Dyson and a team had been working on some problem to do with the strong/weak forces but they had proposed a theory and developed the mathematics and simulation behind it that agreed fairly well with observed data. Fermi accepted the paper from Dyson but barely looked at it then put it on the desk. He asked Dyson how many free parameters he had used in his simulation. 'Four', Dyson replied. Fermi remarked that a friend of his, John Von Neumann, used to say that with four parameters he could 'fit' an elephant and with five, he could make him 'wiggle his trunk'. Fermi rejected the work. Turned out he was right - the real answer was the existence of Quarks, which no one knew about at that time.

Random fact: I was at Imperial a couple of years ago for a 'Tiger Team' meeting on a space project. I went to the loo and was greeted with bold instructional posters that explained that people were meant to sit on the loo, not squat on it with their boots.

[wba1] 21/7/2020 17:04

I have been tied up and am yet to get to the various FCA papers but I agree with the general point made by cjac39 about being unsure about the process being undertaken by the FCA in court. I have never come across an approach which tries to identify broader principles which can be applied to different policies. Usually specific wordings get tested and even minor deviations result in new cases. But we live in strange times. I will try to have a look at the other stuff at some point.

One slightly OT comment. I was a bit surprised at the dig at University College. Partly because the government expert was Imperial College and secondly, if I had to choose one place in this country on the same level as Oxbridge and Imperial it would be UCL. My daughter went there and I commissioned work for Allianz by UCL experts - they were good.

[leedslad001] 21/7/2020 16:36

Poor show today