Aviva Plc - Update on COVID-19 and 2019 Final Dividend
This content has been sourced from: https://www.investegate.co.uk/aviva-plc/rns/update...
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.