Aviva Share Discussion Threads

[lord gnome] 13/2/2021 10:55

Good post muscletrade. With the City in general being such an important element of the British economic economy and with so many MPs having City connections, I strongly doubt that the current situation concerns them greatly or that we would be where we are without the City being party to it. Rather like Blackadder, I am sure that it it part of their cunning plan. Have faith people.
If the City was at all concerned, you would hear the roars of anguish in Every MPs ears and across all media. Opportunity beckons.

[muscletrade] 13/2/2021 10:09

Spud. The following is not an attempt to increase tension with others on this BB. This is a Bona fide article on Financial Equivalence that directly effects Aviva and other UK Financials.

Courtesy Daily Telegraph AEP

The EU risks violating international law if it continues to deny the UK "equivalence" in financial services already granted to a string of other countries.

Selective treatment of one state for political reasons breaches the non-discrimination principle of the World Trade Organisation. It is strictly forbidden.

Lorand Bartels, an expert in international trade law at Cambridge University, said: “A good lawyer would reach for Article VII of General Agreement on Trade in Services (GATS). It is not a slam dunk but it would be a good case.”

Switzerland explored legal recourse under WTO law after the EU singled out Swiss exchanges for punitive treatment, although it ultimately stopped short of pulling the trigger.

Equivalence is a normal courtesy among developed OECD states and even some that are not. The EU grants Brazil recognition in areas such as insurance, auditing, credit institutions, exchanges, investment firms, though it would be a stretch to argue that Brazil’s regulators have higher standards than their British counterparts.

The UK has unilaterally granted equivalence to the EU across 28 sectors. Brussels has refused to reciprocate except in two areas, chiefly in counterparty clearing where the European financial system would otherwise have been in danger.

Andrew Bailey, Governor of the Bank of England, suggested this week that Brussels is weaponising equivalence to lock Britain into its system as a regulatory satellite. “I'm afraid a world in which the EU dictates and determines what rules and standards we have in the UK is not going to work,” he said.

The EU says its ties to the UK are fundamentally different from ties to any other third country, and that equivalence was never designed for such circumstances. It cannot safely outsource financial stability - and 80pc of its capital markets - to a hub outside its legal nexus.

But that is a political argument and cuts little ice under WTO rules. “All WTO members with equivalent standards have to be treated equally. Refusal to do so goes against the whole Most Favoured Nation principle,” said one expert advising the Government.

Article VII states that members “shall not accord recognition in a manner which would constitute a means of discrimination between countries ... or a disguised restriction on trade in services. Unless an exemption applies, a WTO member must treat service suppliers from all other WTO members equally.”

The EU case is hollow since the UK has rolled over existing European regulations and is 100pc aligned at this point. Where equivalence is granted, it can be withdrawn within 30 days. Under any reading, the EU is engaging in a “disguised restriction on trade in services”.


The EU grants broad equivalence to Canada, Australia, the US, and others. It lets US clearing houses serve investors on the Continent (it had little choice) on an open-ended basis, but has not offered the same terms to the UK. This would be hard to justify in court.

Any case would go to an arbitrage panel, or to a WTO tribunal. While the process would take a long time, such a complaint would put the EU in the dock, entailing reputational cost. The EU is assiduous in cultivating its image as a law-based system, justified or not.

Filing a discrimination case would be well-calibrated action. It would be a better course of action than tit-for-tat retaliation that stoops to the same protectionist level. The UK has more to gain by rising above the issue and remaining open to the world.

William Wright from the New Financial think tank says London should stop worrying about business that has already migrated to the EU. “That is a sunk cost of Brexit. It’s gone so we should just take it on the chin,” he said.

The refusal to grant equivalence on derivatives and foreign exchange trading can be turned against the EU. “If the UK teams up with the US we will together have 75pc of the global market. We’ll set the de facto global standard,” he said.

In a sense, the EU’s belligerence clarifies the issue. It is not offering enough to make compromise attractive. Hanged for a lamb, hanged for a sheep, the UK might as well go all out for the policy freedom that the City needs to compete in the financial 21st century. The EU’s regulatory Acquis is 20th century, pre-digital and very hard to reform.


Jullian Jessop, a fellow at the Institute of Economic Affairs, said City business lost to Europe is irritating but not worth much money. “It is mostly low-margin like trading in equities. There is no profit in this, and not many jobs. If the EU wants to play this game, let them. We should focus on the cutting-edge areas of fintech where the UK already has a huge advantage,” he said.

“The EU is hamstringing itself and sending a poor signal to the rest of the world. To borrow from Napoleon, if your competitor is making a mistake, don’t interrupt him. It is absolutely the right thing for us not to retaliate on equivalence. We should focus on other things, and I’m convinced we’ll end up the net winners in the long run.”

Finance and services are not part of the EU-UK trade deal, but the Political Declaration commits the EU to “balanced arrangements”, “liberalisation” in services trade, mutual treatment in a “non-discriminatory manner” and respect for “regulatory autonomy”.

The Tusk-Juncker letter of January 2019 stated that the Declaration had a quasi-legal status and would be interpreted as such by the European Court. The UK signed a goods trade deal that greatly favoured Brussels on the assurance that the EU would behave with a minimum of good faith in services.

Clearly it is not doing so. Given the EU’s parallel breach of the Good Friday Agreement - by disregarding loyalist interests - and nastiness over UK food and fish exports, pressure is mounting for a unilateral abrogation of the trade agreement. That would be a mistake (though it may come to that).

Shanker Singham from Competere argued the UK should instead make a clean break and redesign its whole system. “We should be super-aggressive in pushing for global trade deals elsewhere. Only that will get the EU’s attention,” he said.

Singham said there is a chance of a swift trade deal with the Biden Administration - perhaps even this year - that would include a financial chapter, paving the way for a transatlantic "Nylon" zone as the core of western finance.

Britain’s best hope is that accession to Asia’s free trade bloc (CPTTP) brings in the US and ultimately India, turning the pact into the world’s biggest trading zone by far. The EU would become the smaller outsider. Its attempt to impose its regulatory ideology would fail.

Since the EU intends to treat the UK as an apostate rather than a trade competitor, the condign answer is to become exactly what Brussels fears: Singapore-on-the-Thames.

That does not mean a race to the bottom. Singapore is a highly-regulated manufacturing and financial economy. But it is also well-regulated.

It means a race to technological modernity. Europe is inadvertently pushing us to do exactly what we should do.

[muscletrade] 13/2/2021 08:50

French mutual insurer Macif has emerged as the frontrunner to acquire Aviva Plc’s insurance operations in the country, according to people familiar with the matter.

Macif is seen as the most suitable buyer because it’s a local player, the people said. The unit could fetch more than 3 billion euros ($3.6 billion), according to the people, who asked not to be identified because the information is private.

The company is competing against French private equity firm Eurazeo SE, said the people. Eurazeo was a latecomer to the auction and there could be some hesitation to sell to private equity, they said.

For Macif, a purchase of Aviva France would be its biggest-ever deal. Eurazeo has been holding talks with Italy’s Assicurazioni Generali SpA about potentially teaming up, the people said. Eurazeo, one of Europe’s few listed buyout firms, sees Aviva France as a strategic investment that would elevate its 18.8 billion euros in assets under management, according to one person.

A consortium of Allianz SE and Athora has been sidelined amid resistance to the latter firm’s links to American private equity, the people said.

Aviva, which hasn’t yet decided on a winner, could reach an agreement as early as this month, the people said. The French business generated 13.4 billion pounds ($18.5 billion) of revenue in 2019, about 20% of the group’s total, according to data compiled by Bloomberg.


The sale is part of Aviva Chief Executive Officer Amanda Blanc’s plan to improve the London-listed insurer’s struggling share price by offloading non-core assets. Blanc has wasted little time since taking the helm in July, agreeing to sell a majority stake in its Singapore business for about $2 billion and pushing ahead with the disposal of its units in Poland and Italy. She’s also exploring options for Aviva’s joint venture in Turkey.

Allianz, Generali and Dutch insurer NN Group NV are among parties that expressed interest in the Polish business, which could fetch about 1.5 billion euros to 2 billion euros, the people said.

Representatives for Allianz, Athora, Aviva, Eurazeo, Generali and Macif declined to comment. A spokesperson NN couldn’t immediately be reached.

Meanwhile, Aviva has initiated talks with French insurance group CNP Assurances as well as Allianz, Germany’s biggest insurer, to sell its Italian operations, people familiar with the matter said. CNP is said to be lined up for the life insurance business while Allianz would buy the general insurance portion, they said. Aviva declined to comment on the details. A deal could be reached within a few weeks, the people said.

Mergers and acquisitions in the European insurance industry are being driven by companies looking to bulk up their property and casualty businesses while selling interest-rate dependent life units. Insurance deals worth $64 billion have been struck in the region during the last 12 months, according to data compiled by Bloomberg. That’s up 53% year-on-year, the data show.

[salver2] 12/2/2021 19:59

According to Bloomberg the French insurer Macif is in the lead for France - nothing that wasn’t known already - but I hope the price is nearer 3.9 billion euros than 3.9 billion dollars!

[1robbob] 12/2/2021 17:22

The current daily trading volume seems to have fallen to very low levels, over the last month or so.

Could this be evidence of a move from net sellers to net buyers on a daily basis?

[geckotheglorious] 12/2/2021 15:57

wba1
Post 7122
"Only at that point, after a series of ill informed posts by brexiteers did I respond"

And there's the Remoaner arrogance for all to see.

Leavers are just as well informed as Remainer you'll find, particularly on financial BB's.

Ultimately some are unable to accept the result despite FOUR Votes to LEAVE over the last 4.8 years!!!!

[ianood] 12/2/2021 15:45

£ to a penny that the Shell contracts (particularly historic) are governed under UK law which is probably making it difficult not to recognise the Nigerian claims.

[dbadvn] 12/2/2021 15:37

F Jack,

Hopefully BoE will at least allow investment in infrastructure. I get the impression ( Cjaj or Wba will know more ) that this is where insurance companies can make the greatest long term gains ( co incidentally "hiding" windfall profit , and it would dovetail very nicely with both desire to increase capital in reserve with pump priming the economy .

What's not to like?

[alphorn] 12/2/2021 15:17

karv - it would depend partly upon parent/subsidiary contracts and guarantees etc. IMO though the answer is 'likely' as the parent company has the responsibility of selecting and managing the subsidiary board. Any disposal agreement could ring fence particular issues and potential liabilities so we would not know until any disposal is agreed.

edit: it is a very significant topic for some global groups as the claimant may choose a US court. (Not applicable here).

[wba1] 12/2/2021 14:56

karv1; date for binding offers is 26/2 for France and 22/2 for Poland so, allowing for a bit of tooing and froing (and the need to avoid embarrassment) you really would expect something with the early March results (or even just before).

On the Shell issue we need a lawyers opinion, but I would assume any contract of this sort would specify the jurisdiction and, if that is French, in your scenario it seems to come back to whether a decision of a French court could be enforced against a UK domiciled company and UK assets . The assets of Aviva Investors in France may be an issue.

[father jack1] 12/2/2021 14:54

BoE is not minded to tamper with the Solvency II requirements inherited from the EU. No Brexit dividend for insurers then.

[karv1] 12/2/2021 14:51

Is there any news yet or gossip on when/if the AV France sale is going to happen?
Also on a side note if the GT issue was really bad ie the worst-case scenario that destroys AV France however unlikely this might be.
Would the Shell news that a subsidiary can be taken to court in the UK. (even tho with Shell it involves pollution and poor countries. //
Is it a red line that has been passed that could be a starting point for money owed by a subsidiary to be claimed against a UK based company?

from sky news


"But it also represents a watershed moment in the accountability of multinational companies. Increasingly impoverished communities are seeking to hold powerful corporate actors to account and this judgment will significantly increase their ability to do so."

[wba1] 12/2/2021 14:51

Sorry, not enough. I did not and never have been first to raise Brexit. In this case it was initially and briefly raised by p0pper (post 7088) before muscletrade felt the need to weigh in at 7089. Having let this die down without response from me, muscletrade then decided to renew the diatribe at post 7101. Only at that point, after a series of ill informed posts by brexiteers did I respond.

spud; I appreciate your management of this board, but I will not take being criticised for responding to posts others wrote, and then only after multiple such provocations. It is like being criticised by the Pope for being too Catholic. There is a rather unfortunate tendency amongst some to think that their views brook no rebuttals. It reminds me of Trump.

[lancasterbomber] 12/2/2021 13:14

Ah yes but

[geckotheglorious] 12/2/2021 11:49

Musletrade.
Post 7117
Spot on. From beginning to end. Concur with all you write.
In my view it was the rear guard action of anti democratic Remainers that see us with a poorer deal than we might have had (that or we wouldnt have wasted 4 years pointlessly negotiating with our supposed friends in Europe who simply wanted to screw us for as much money as they could by deliberately dragging the process out with their obstinacy and nit picking)

It all boils down to Remainers thinking the UK isn't good enough, isn't big enough, or whatever else takes their fancy, to be an independent free nation charting our own path in the world.

[spud] 12/2/2021 11:48

A well reasoned and succinct post muscle. Now lets leave this Brexit stuff to a Brexit thread (unless of course you guys want me to create one....)

spud

[muscletrade] 12/2/2021 11:01

Wba1, I respect and value the contribution you make on this board with all things insurance.It is insightful and helpful. I would be even more respectful and grateful if you could stop lecturing us on Brexit and the incompetence of the administration.

Despite what you say it is clear that you are not reconciled to Brexit and in your words "are appalled at the incompetence and dishonesty of our team in the negotiations"

Most certainly the outcome of the negotiations are suboptimal and lest we forget have still not been ratified by the EU parliament. (the way things are going they might never be).
However, many feel they were the best outcome that could be achieved given the hand our team were dealt.(and obviously I mean the Johnson team, not the May team who were a disaster).
The Negotiations might have had a completely different outcome if a determined and bitter remain rump had not spent years from day1 doing their utmost to undermine and overturn a legitimate referendum result that they found almost impossible to accept, and still do.

This rear guard action most certainly encouraged the EU to do their level best using every underhand and dishonest and malevolent tactic available to overturn the result, and if that did not work make it as painful for the UK as possible. The EU are still in denial and pursue the "inflict pain" tactics even though it is not in the best interest of their constituents.

So one could, and I do argue that that the bitter undemocratic remain rump must bare their share of responsibility for the negotiations outcome. Not to understand and accept this is an effort to air brush history.

Despite overwhelming odds Brexit has happened and sooner or later some or all of the most egregious elements of the negotiations will be binned and hopefully common sense will prevail but I suspect it will be a long haul.

As you remind us, no one can complain if the EU or, let's say more particularly France does what it does to protect their interests. That does not mean we have to like it or let it go and play nice. We have interests too and if necessary we should do what we need to do to protect them, and we will.

[dr biotech] 12/2/2021 10:11

For those of us still working, the affects are showing. We are experiencing delays and increased costs in imports, increased cost (particularly when you add in time) of exports - smaller items (less than 500gbp) just aren’t worth it. Think we’ll have to open a European base (and export the jobs) or just stop doing business there.

For our business (80% could be classed as essential in covid terms) brexit is turning out to be mess that we thought it would be. Actually worse than covid. May get better with time, but I can’t see how businesses that are mostly small value exports will survive.

Shame, but it is what it is.

[eurofox] 12/2/2021 10:06

give it a rest gentlemen/ladies ... now, where's my handbag

[father jack1] 12/2/2021 09:42

Whichever way you voted, Brexit is an economic act of self-harm which will lower the living standards of everyone in this country. Misguided notions of British exceptionalism and wilful dishonesty are no substitute for declining wealth and influence.