Aviva Share Discussion Threads

[speedsgh] 30/10/2023 11:55

One of Britain’s biggest insurers has sounded the alarm over the government’s decisions to weaken its climate policies and expand North Sea oil and gas production.

Amanda Blanc, the chief executive of Aviva and a non-executive director at BP, said she was “worried that UK climate action has stalled this year” and warned that Britain’s ambitious climate goals were “under threat due to a lack of practical and detailed plans.

“This puts at clear risk the jobs, growth and the additional investment the UK requires to become more climate-ready.”

A report by the FTSE 100 insurer, pensions and investment company that Blanc, 56, has led since 2020 criticises the government’s recent “dilution” of climate policies and condemns its push to expand North Sea drilling as a “worrying shift”.

The warning comes on the same day that the government hails the awarding of a raft of new North Sea oil and gas licences as “common sense”.

The North Sea Transition Authority, the offshore regulator, said it was awarding 27 licences to allow companies including Shell, Equinor and TotalEnergies to explore and develop oil and gas resources in the central and northern North Sea and west of Shetland. It said it would “work with the licensees to make sure that where production can be achieved it happens as quickly as possible”.

Claire Coutinho, the energy security secretary, said the licences were “a welcome boost for the UK industry” and that using domestic supplies was “better for our economy, the environment and our energy security”.

Britain is Europe’s second largest oil and gas producer after Norway. Aviva argued that “the country’s lack of a policy framework to phase out oil and gas extraction is a major area of concern. While all countries will need to continue using fossil fuels during the energy transition, the UK’s decision to proactively expand domestic oil and gas production is a worrying shift.”

Aviva is Britain’s biggest composite insurer, providing life and general cover. The group is valued at £10.8 billion and has more than £350 billion of assets under management globally. Blanc co-chairs the transition plan taskforce, an initiative launched by Rishi Sunak as chancellor in 2021 to develop a high standard for corporate climate transition plans.

Aviva warns that “the UK’s leadership position in climate change mitigation is in serious jeopardy” as the government “increasingly focuses on short-term energy security over long-term sustainability”. Last month the prime minister delayed Britain’s deadline for ending the sale of new petrol and diesel cars by five years and weakened other targets related to the use of fossil fuel heating.

“The recent dilution in government net zero commitments means meeting future targets is an even bigger challenge and creates uncertainty, potentially risking the opportunity for UK businesses to capitalise on green growth,” Aviva said.

Criticising the lack of policies in place to achieve Britain’s net zero climate goals, it calls for “immediate corrective action” including “phasing out fossil fuel extraction, improving energy efficiency of buildings, and scaling-up renewables”.

Blanc said that UK businesses were “trying to address the climate challenge in greater numbers and putting action plans in place”.

“To support them, we urgently need a UK, whole economy, transition plan which allows us to compete more effectively with the US Inflation Reduction Act and help the UK become the most climate-ready major economy by 2030.”

[skinny] 30/10/2023 10:24

She is also a non-executive director at BP.

[tornado12] 30/10/2023 10:22

Amanda should not be so vocal on climate change. I think most agree we have to change but not at the excess cost to U.K. or our businesses. U.K. emits less 1% of total emissions and yet we lead most of the developed countries on sourcing energy from renewables. As long as businesses need O&G then it’s smart to produce in U.K. and receive the wealth from it. You will never see the likes of US decide that’s it must stop producing O&G. .. Aviva stick to their business plan and SH. Most ESG funds are losers today so that should be massive alarm bells to any company not competitive

[grahamite2] 30/10/2023 10:06

Unfortunately I can't see The Times. I'd have been interested to know just what climate policy has to do with insurance.

[lippy4] 30/10/2023 10:00

climate policy is making this country poorer as we now have to import more oil and gas.

[whatsup32] 30/10/2023 09:51

The Times today. Quarter page in Business
" Aviva hits out at new oil drilling"
Amanda is criticising governments climate policy. Says its weakening.

Not sure Amanda has anything to achieve here

[eeza] 29/10/2023 13:24

Smart meters/appliances = trojan horses.

[willoicc] 29/10/2023 12:59

Everyone can shop around. That is the best way to reduce your own costs.

It will be interesting to see if the Monopolies Commission takes a look to see if the FCA has exceeded its mandate.

[whatsup32] 29/10/2023 12:28

Smart meters are supposed to save us money . I doubted that claim from day one and refuse to have it installed (it’s not mandatory)

FCA claims that loyal customers will save has also failed from my point of view. I always hated the idea that loyal customers got quoted more than new arrivals and I had to shop around so I supported FCA .

But alas markets are smarter then governments

[whatsup32] 29/10/2023 12:13

Motor insurers endure worst underwriting conditions . It’s an article from June

[whatsup32] 29/10/2023 12:10

In one of the papers last week?
The Times , Guardian or FT

[dhmace] 29/10/2023 11:03

Where did you get 10% from?

hxxps://www.ey.com/en_uk/news/2023/06/ey-uk-motor-insurance-results-analysis#:~:text=UK%20motor%20insurers%20reported%20a,inflation%20and%20lagging%20premium%20increases

[lippy4] 29/10/2023 09:39

do you mean paid out in claims??

[whatsup32] 29/10/2023 09:29

For every pound taken for car insurance pound 10p is paid out.
Also today in FT home insurance to rise by 36%+ over two years due to dire weather.

Probably good idea by Amanda's to invest more in financials to get a Probable guaranteed return. ??

[skinny] 29/10/2023 08:44

"We all know that TR on AV LGEN etc... Has been woeful" - it depends on your timescales - I prefer ROCE.

[marksp2011] 29/10/2023 06:57

Purchase yield and current yield are both usefulWhat is yet more useful is the Total Return and the IRR on your investmentWe all know that TR on AV LGEN etc... Has been woeful and an 5, 6, 9 % yield has merely gone part of the way to offsetting capital losses.

[gco1133a] 28/10/2023 23:09

Klotzak this is just wrong and muddled thinking. Pete160 explained it pretty well but I will have another go.

In some parallel universe two identical companies both have a share price of 100p but one yields 6% and the other 5%. You wisely choose the company that has the 6% yield and invest £10k and earn £600 a year in dividends. A year later the two companies are still identical paying the same dividend but due to the irrationality of the market the share price of the company you have invested in has doubled but the other company is still trading at 100p so you have a £20k investment earning 3% at the current price. If you sell you holding and reinvest in the other company you will now get £1k in dividends a £400 improvement. This a 5% yield on your new investment compared to the 6% book yield if you kept your original investment, but it is obviously a rational thing to do. Yield on book cost is not a useful concept.

[klotzak] 28/10/2023 21:44

Wrong.
If you buy and the price is 200, then the yield is reflective on that price. It is your yield, the book yield is on the market price on whenever you look. If you buy today your personal yield is the dividend compared to the share price.
Let’s not be daft about this.

[pete160] 28/10/2023 16:55

F-jack,
Given the market volatility, but also the opportunities around, I cannot see how anyone could justify going all in on one stock. I hold good % shares of my portfolio in Av. Lgen, Phnx and esp. MNG at present, but even that makes me nervous given the weighting towards financials - and uk financials at that.

Fortunately the dividends on each (which I consider to be relatively safe) help to offset that anxiety, but it's still there.

Though I still curse the weighting of Lloyds and RBS in 2008 because I felt they might be safe banks, and more recently FRES, bought - and still held, as a means of providing exposure to precious metals.

Carp.
True about the nice problem to have.

I may be wrong, but my view is that the price you bought at is not particularly relevant. It is the opportunity cost of the current price.

If the dividend on 1,000 shares is 300 gbp, it's likely to still be £ 300 or so whether your 1,000 shares are worth 3 bgp, 4 bgp or 6 gbp.

But if the dividend is 300 gbp and the share price is 6 gbp, you have an opportunity cost of attaining that, or more, elsewhere.

and if you purchased the 1,000 shares at 4 gbp, whilst your dividend may be the same, the yield percentage is reduced if the price increases to 6 gbp.

[gco1133a] 28/10/2023 16:44

Carpingtris the yield at purchase is a meaningless number, the only thing that matters is the yield at the current price so Pete160 is correct

[carpingtris] 28/10/2023 14:50

Pete160 _ surely the yield depends on the price you've brought at.

I think the issue is then where to place any proceeds for just as good a return/safety.

It's a dilemma... but either way would be a nice problem to have I guess.