Aviva said that its 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 the European Insurance and Occupational Pensions Authority (EIOPA), the Prudential Regulation Authority (PRA) and supervisors of other Aviva subsidiaries, have responded by publicly urging restraint on dividend payments by insurers to shareholders.  Aviva said that in light of the significant uncertainties presented by COVID-19, its board agrees with our regulators that it is prudent to suspend dividend payments at this time. 

The insurance company emphasised that it is in a strong financial position with strong liquidity. It said that 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).

Aviva said that it is too early to quantify or estimate the impact of COVID-19 on claims expenses in its 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, the company said that it is reviewing all material discretionary and project expenditure.

Aviva intends to provide an operational update for investors in the second half of May.

The company 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.”

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