Aviva Share Discussion Threads

[cjac39] 24/8/2022 06:29

makinbuks not silly but not quite correct. the problem with the risk margin comes from it not being an economic risk just a regulatory reserve. insurers via matching adjustment portfolios are extremely well insulated to int rates and therefore their int rate risk in the s2 scr is low. but then in s2 they bolted on the risk margin which is a reserve for unhedgeable risks which largely is longevity amongst other things. the problem is the risk margin is tied directly to the size of the liabs so as int rate go down it sends liabs up and risk margin up so scr coverage down. obviously with opposite effect the other way. so insurers struggle with whether to hedge this extra risk or not and the weaker ones do and larger ones dont generally. if the int rate move is large enough they are allowed to revalue the tmtp to offset but this also has other factors that mean its not a perfect hedge to the risk margin change

[dope007] 23/8/2022 15:47

Depends how good your hedge is!! in 2008 most of them were useless

[makinbuks] 23/8/2022 15:21

cjac, might be a silly question, but wouldn't the fact that an insurance company was hedged or not be part of the calculation of its S2 margin? Surely if I'm hedged (counterparty risk aside) I don't need such a high reserve as if I'm not

[p0pper] 23/8/2022 10:21

1robbob, That's very optimistic but must say I love your enthusiasm, lol

[1robbob] 23/8/2022 10:10

Thanks cjac
I remain bullish on AV and expect £1bn shareback to be announced
with the Finals next March. Together with a 15p Special Div in addition to the 31p
annual dividend

Cost: Annual Div £870m: Buyback £1bn: Special £420m = Total £2.29bn
£2.29bn = 30% off the Solvency 2 Margin.
As a result; at the end of the year this should leave the Solvency 2 margin healthily above the 180% BOD comfort level

[cjac39] 23/8/2022 08:25

hi 1rob - as ever with insurers its a complicated position. the main noise in life cos at the moment is the risk margin. this is purely a s2 concept and it is very int rate sensitive. some are trying to hedge it; some don't. eg mng and just definitely do, lgen and aviva I don't think do. as rates fall it increases a lot but if its a large enough move they can revalue the tmtp so they can offset. therefore I wouldn't hedge it but in general terms rates up at the long end is good.

its also good because it allows them to sell annuities at a better rate which is starting to happen and if real yields rise then it encourages more pension schemes to derisk their db liabs.

at the shorter end and in the gi business its good to see higher rates as their av duration of the invested premiums is roughly 2 years say so if they can reinvest at nicer yields they make more money on the asset side.

however as we've seen inflation on cost items can be bad like in motor but don't view that as too impactful as they can reprice into next years cycle.

[1robbob] 23/8/2022 07:38

cjac
Am I correct in thinking that the higher long rates go, the better it is for
the Solvency 2 surplus?

[skinny] 22/8/2022 15:55

The only pref that I hold that's better than that is GACA.

[yf23_1] 22/8/2022 15:06

buzz
Aviva prefs yielding over 6% and AV.B goes ex at start of sept.

[cfro] 22/8/2022 14:59

That is a nice confident purchase buy a non-exec.

Dont forget AV still paying over 7% miles more than the best saving account on offer!

[tuftymatt] 22/8/2022 13:59

buzz24, Zopa is offering 1.85% on a 7 day notice account via it's app. 31 days notice is 1.95%

I have used them since 2012 for P2P lending until they stopped that last year. Was with Marcus and Chase too until this was raised on MSE a few weeks back.

[roguetraderuk] 22/8/2022 13:47

416-425 an area of interest for anyone looking to reload. below there 403.

[buzz24] 22/8/2022 13:38

A non exec Director just purchased 15000 shares at 432p and shows some confidence at least.

I'm not sure we can see 5% on bank interest soon as most are under 3% now for one or more years notice. Most of these are almost non recognizable names and I would be careful some could go bust like some of the utility companies and the only protection is 85 grand if they did...All the main high street brand are extremely poor. I am even considering selling my ISA's now as the interest on them are appalling. Anyone know of any good rates anywhere? Reliable banks that is...

[uppompeii] 22/8/2022 13:25

Any you suggest eurofox?I'm not quite as cash heavy just now, around 40%, but have trimmed back L&G, and M&G post divi.

[cassini] 22/8/2022 13:18

Looks like the market bounce of the last two months may be rolling over, although energy seems OK still.

[tuftymatt] 22/8/2022 13:13

Good for you eurofox and I don't blame anyone who cashes some of their chips in at any point in time 👍🏻
I personally will hold my current winners but am thinking of taking profit in BP. Didn't last time and watched it fall back so maybe will today.

[eurofox] 22/8/2022 13:09

I have to own up to exercising some fairly aggressive risk reduction first thing this AM - sold 50% of each of my holdings in AV. LGEN, MNG and PHNX. Even reduced some of the commodities, all at surprisingly good prices. The future is beginning to look quite dire - if interest rate keep rising then LIBOR+ (or it's replacement SONIA) charges on margined products could lead to a domino collapse of margined positions affecting all of us who put real cash in to the market. I am now over 70% cash, and interest rates of 5%+ could generate a good income stream from fixed income products.

[tuftymatt] 22/8/2022 08:10

I just took a few more and will add if the dip continues.

[marksp2011] 22/8/2022 08:03

Closed the shortsBuys at 420 and 410. On holiday and not watching

[whatsup32] 21/8/2022 11:03

Admiral quoted to renew £478. Axa £239.
Via a comparison site. Half the price.

Admiral can't be reached by phone to cancel renewal sent email to which they replied they will requote. I thought days of us running around trying to find a deal were over

[oldfellowme2] 21/8/2022 10:18

Re car insurance got quoted £762 with Aviva settled for £346 with Axa.

[tried and tested] 20/8/2022 22:03

I sold prior to ex-dividend myself and given where the share price is now I just hope I can get back in at a price that makes this approach worthwhile,.

[whatsup32] 20/8/2022 12:50

Scobak.
Sorry should have made clear .
Article stated L&G cheaper and a BUY

Petrol now 167.9p locally down from peak of £2 . Should be good news all round for inflation.

Admiral car reinsurance quote up 20% from last year despite no claims .

I suspect other insurers quoting 20% higher too. That's good news for Aviva

[cassini] 20/8/2022 11:50

If it gets below the capital return price (424p?) I'd add some more.

I never reinvested that money so it's sat idle.

I wonder what September holds for the broader market though, it's often a crossroads for events, some reality after the silly season.