Insurance company Aviva has announced the suspension of its dividend payments amid the coronavirus pandemic.
In a statement, issued today (8 April), Aviva said: “The board fully recognises the importance of cash dividends to all of our ordinary shareholders, and expects to reconsider any distributions to ordinary shareholders in the fourth quarter of 2020.
“The board has taken this decision in the wake of the unprecedented challenges COVID-19 presents for businesses, households, and customers, and the adverse and highly uncertain impact on the global economy.”
It added: “Regulatory authorities, including EIOPA (European Insurance and Occupational Pensions Authority), the PRA (Prudential Regulation Authority), and supervisors of other Aviva subsidiaries, have responded by publicly urging restraint on dividend payments by insurers to shareholders.”
Aviva said it remains capitalised with strong liquidit. By retaining the final dividend, the estimated group capital ratio will increase by 7% to approximately 182% (as of March 13, previously disclosed date).
The insurance giant added: “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.”