Decision follows pressure from regulatory bodies on insurers to show ‘restraint’ in light of COVID-19
Aviva has announced that its board of directors have agreed to withdraw its recommendation to pay 2019 final dividends to its ordinary shareholders in June 2020.
The decision, made in the wake of the economic challenges posed by COVID-19, has come following public pressure placed on insurers by regulatory authorities, such as the EIOPA and the PRA, to show restraint regarding dividend payments to shareholders at this time.
Aviva has opted to delay its decision about dividend payments until the final quarter of 2020.
The insurer said it remains "well capitalised with strong liquidity" and by retaining the final dividend, its estimated group capital is expected to increase by 7% to approximately 182% (as of 13 March).
Aviva said: "It remains too early to quantify the impact of COVID-19 on claims expenses in our life and general insurance businesses, and the potential effect of capital markets and economic trends on our results. Given the change in the economic outlook, we are reviewing all material discretionary and project expenditure. We intend to provide an operational update for investors in the second half of May."
Among a number of initiatives launched to support customers across its various lines of business, the insurer has automatically extending cover for businesses to give the same level of protection when their employees are having to work from home.
Despite adding COVID-19 underwriting questions to its protection policies and no longer requesting GP reports, Aviva reported yesterday that is has been able to offer terms to 86% of customers (compared to 95%) since implementing these changes.
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