Aviva Share Discussion Threads

[whatsup32] 24/9/2020 17:45

Confusing article . Headline says, ‘in advance talks’ , Aviva says at the bottom of article ‘early stage’

[eurofox] 24/9/2020 17:35

Sounds good to me and gives time for the other Directors to show their real commitment by topping up their miserable holdings

[whatsup32] 24/9/2020 17:19

Aviva said ‘at very early stages of developing it’s strategy’

[whatsup32] 24/9/2020 17:16

Can you provide link that works please.

Ahh got it thanks

[tresham] 24/9/2020 17:00

The share price just follows the market, down 1.5%
Over 15% of my portfolio in what I see as quite safe.
Down side is their bonds and property investments they hold against their liabilities, but continually being audited.

[eurofox] 24/9/2020 16:23

also added at 278.3

[whatsup32] 24/9/2020 15:29

Added more with my dividend @£2.782 , more upside then down . Expecting interesting next 3 months.

[leedslad001] 24/9/2020 14:12

Mines in account

[carpingtris] 24/9/2020 08:38

Mine will get auto-reinvested.

[uppompeii] 24/9/2020 08:29

Still awaiting my much reduced divi..

[whatsup32] 23/9/2020 15:24

Burbelly.

At Aviva it’s payday everyday. :)

[burbelly] 23/9/2020 14:57

Payday tomorrow

[samwn1] 23/9/2020 13:47

Standard Life Aberdeen is no longer an insurance company.

[spcecks] 23/9/2020 11:51

Thanks spud for sharing I hold all three.

[spud] 23/9/2020 11:32

Shares in insurance companies are holding firm despite a high court ruling this month that they could have to pay out thousands. In the judgement, the court ruled that some insurers would have to pay out to businesses claiming business interruption due to the pandemic.

However, as City AM reports, investors in Legal and General [LGEN], Aviva [AV] and Standard Life [SLA] “shook off the ruling”. What’s more remarkable is that many had predicted the insurance sector would be one of the hardest hit by the outbreak, paying out on both business and life insurance policies.

Yet, while half-year profits have seen sharp falls, the sector seems resilient. Unlike banking, which has seen share prices suppressed since the outbreak, insurers have by and large managed to claw back some losses.

So, what’s the outlook for heavyweights Legal and General, Aviva and Standard Life’s share prices for the rest of the year?

Legal and General’s share price

While Legal and General’s share price has been on a downward trajectory since mid-August, it's still lightyears above the 138.6p it was trading at on 23 March. Causing the late summer slip were first-half pre-tax profits of £285m, a steep 73% drop from the same period last year. Weighing on earnings were historically low-interest rates and payouts on life insurance policies, both due to the coronavirus.

£285MILLION
LEGAL & GENERAL'S HALF-YEAR PRE-TAX PROFITS - A 73% YOY DECLINE

Still, that didn't stop Legal and General from paying out a 4.93p per share first-half dividend. While that's less than some analysts were expecting, considering that the regulator has been pressuring insurers to freeze payouts to shore up capital, it’s better than nothing.

For income-seeking investors, some analysts reckon dividends will be back to strength sooner rather than later. Gordon Aitken, an analyst at RBC Capital Markets, said: “We see this dividend caution as merely temporary and not an indication that dividend growth will slow.”

Among the analysts tracking the stock, Legal and General's share price carries a 288.79p price target, which would see a 59.6% upside on 21 September’s closing price if hit.

“We see this dividend caution as merely temporary and not an indication that dividend growth will slow” - Gordon Aitken, RBC Capital Markets analyst


Aviva’s share price

Two months into the job and Aviva's new CEO Amanda Blanc has picked up £1m worth of the insurer's stock. Picking up 324,887 Aviva shares at just over 300p certainly shows self-belief in her own turnaround strategy.

Having replaced Maurice Tulloch in the top spot after the former CEO resigned for family health reasons, Blanc has the task of turning around Aviva's share price, which has fallen 30% since the start of the year.

30%
AVIVA'S YTD SHARE PRICE DROP

To do this, Blanc has pledged to focus on Aviva’s core UK, Ireland and Canada markets, while reducing its European and Asian operations. Already Blanc has overseen the sale of Aviva's Singapore operations to Singapore Life for $1.98bn in one of the biggest insurance deals in Southeast Asia.

“The sale of Aviva Singapore is a significant first step in our new strategy to bring greater focus to Aviva’s portfolio,” said Blanc.

The deal also got the blessing from analysts at Jefferies, who described it as constituting “exceptional value creation” for Aviva, while commending Blanc for showing “decisive action”.

So, a promising start from the new CEO, with the possibility of having picked up Aviva’s share price at a bargain? Analysts tracking the stock on Yahoo Finance have a 551.33p average price target. Hitting this would see an impressive 95.3% upside on Aviva’s current share price (as of 21 September’s close).

“The sale of Aviva Singapore is a significant first step in our new strategy to bring greater focus to Aviva’s portfolio” - Aviva's new CEO Amanda Blanc


Standard Life Aberdeen’s share price

Like Aviva, Standard Life’s share price has seen a steep drop off since the start of the year, followed by a mild recovery since the start of the pandemic.

In half-year results, adjusted pre-tax profit came in at £195m, down 30% from the £280m seen in the same period last year. The sharp downturn in profit can be notched up to both the coronavirus and the loss of its business with Lloyds bank. In total, net withdrawals came in at £24.8bn, causing fee revenue to drop 13%. Despite the losses, Standard Life rewarded shareholders with a 7.3p interim dividend.

£195MILLION
STANDARD LIFE'S HALF-YEAR PRE-TAX PROFITS - A 30% YOY DECLINE

Presiding over his last set of results, the outgoing CEO Keith Skeoch commented that “the long-term consequences of the crisis will be profound,” and predicted that any economic recovery would be W-shaped without a vaccine.

While that struck a gloomy chord, Standard Life actually saw overall outflows slow, excluding the withdrawal paid to Lloyds. If the asset manager continues to reduce outflows, Standard Life’s share price may have already been through the worst.

Analysts have pinned a 380.07p average target on Standard Life’s share price, which would see a 75% gain on the current share price (through 21 September’s close).

spud

[hhhold2] 23/9/2020 11:23

Aviva selling off Turkey India JV, , Italy , France , Indonesia, Poland, Singapore,

going to be a cash rich company,


would they be looking to buy up profitable competition in Ireland Canada & UK or

pay off debt & return it cash to shareholders ?

how would they avoid being swallowed up themselves?

Interesting months ahead.

[wba1] 22/9/2020 22:43

cjac; just saw your post as I loaded mine. No, I would not invest on that basis. Insurers rely on getting business from a spread of positions in terms of competitiveness. Some business will be the best rate on the market, but some will be average price. No intermediaries (aggregators or traditional brokers) have rates from all insurers and this alone drives the average premium realised away from the market lead. It is also why traditional broker business (the small amount remaining) is so much better, as they may only have a panel of 5 or 6 insurers. There is also the problem of pricing outliers. Even with all the improvements in pricing models there are still insurers with weaker models or who are pricing off limited data. If you match prices you risk aligning with these outliers.

Of course, Direct Line did do something similar, but they used it as a means of making their marketing spend more effective and leveraged a market leading expense ratio - and they added a whole lot of small print ( such as only matching if you had been claims free for several years and been with your existing insurer for a minimum period - in which case the dual pricing regime had already pushed your renewal price above the profit point).

[wba1] 22/9/2020 22:33

The banning of dual pricing is a double edged sword. Motor (and home insurance to some extent) have been used as loss leaders in recent years with industry combined ratios of over 100% (and sometimes over 110%) in many of the last 20 years. So it has been entirely wrong to say that motor insurance has been overpriced; if anything it has been the opposite, but has been used as a vehicle to attract customers and intermediaries to more profitable products. Whether this change will alter the dynamics of that model and result in a general increase in prices is an interesting and unclear issue.

What is clear is that in the absence of dual pricing (cheap intro rates), prices for new business will increase (balanced partially or wholly by reductions in renewal premiums). But what this means is that all of us who shop around every year and take advantage of the (present) lower intro prices will see a significant hike in our insurance costs. Until now we have, in effect, been subsidised by those who have not looked around at renewal - and that subsidy will no longer exist. So I just say, do not complain if you are one of those who shop around and will now have to pay more. You asked for this change and now will have to pay the price.

The new system may be fairer, but there will be losers as well as winners - and possibly more losers than winners.

[cjac39] 22/9/2020 22:30

i know youll tell me about claims and admin and many other things but intrinsically i think it make sense for generic insurance

[cjac39] 22/9/2020 22:29

interesting view. ive always wondered about setting up a co called hindsight ins that has no actuaries and just prices at mkt rate less 2% with a much lower cost base. wba would you invest?

[waterloo01] 22/9/2020 18:53

I moved from Aviva insurance this year after 3 years as they wouldn't lower the price. Got it 50% cheaper with Direct line. I guess one result will be all the new deals will increase closer to what they will lose by offering the same price to all, so not sure if there will be that much negative effect on insurers, net slightly negative, but will cause an issue with the aggregation sites. Time to short moneysupermarket?

[whatsup32] 22/9/2020 18:30

Very much doubt it , 4 billion coming in from disposals plus 700m from cancelled div.
Why would they

[mountpleasant] 22/9/2020 18:09

They could still pull the dividend.
Similar happened earlier this year with Barclays.