Update on COVID-19 and 2019 final dividend*
Aviva plc (“Aviva”) today announces that the Board of Directors has agreed to withdraw its recommendation to pay the 2019 final dividend to ordinary shareholders in June 2020.
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. Regulatory authorities, including EIOPA, the PRA and supervisors of other Aviva subsidiaries, have responded by publicly urging restraint on dividend payments by insurers to shareholders. In light of the significant uncertainties presented by COVID-19, the Board agrees with our regulators that it is prudent to suspend dividend payments at this time.
Aviva remains well capitalised with strong liquidity. By retaining the final dividend, the estimated group capital ratio will increase by c. 7% to approximately 182% (as of March 13, previously disclosed date).
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.
Supporting customers and employees and the British economy
Aviva has launched a wide range of initiatives to support customers, our communities, and our people during these challenging times including:
- offering customers who are NHS workers additional support such as free car breakdown cover and enhanced home insurance cover for personal belongings;
- for our UK customers experiencing severe financial difficulties as a result of COVID-19 and struggling to afford home or motor insurance, we are helping manage payments;
- automatically extending cover for businesses to give the same level of protection when their employees are having to work from home;
- we have increased the funding to our long-standing partner, the British Red Cross, by £10m to direct help to those that need it most;
- since the crisis began, Aviva’s employees have maintained high service standards to customers across all our markets. Our people continue to be paid as normal and we confirm that Aviva does not intend to use the UK Government funded scheme to furlough Aviva employees.
More information on the support Aviva is providing can be found at: https://www.aviva.com/about-us/coronavirus-advice/
*This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014. For the purposes of Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Kirstine Cooper, Group General Counsel and Company Secretary, for Aviva plc.
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Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
- We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
- We will focus on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. Our International businesses in Europe and Asia will be managed for long-term shareholder value. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience.
- Total group assets under management at Aviva group are £522 billion and our Solvency II capital surplus is £12.0 billion (HY20). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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