Daily Insurance Industry News
 
 
Daily Insurance Industry News
Tuesday 17th of July 2018
April 22, 2009

Insurer shareholders nervous ahead of budget

by David Masters

Story link: Insurer shareholders nervous ahead of budget

Insurer shareholders nervous ahead of budget Insurer shareholders nervous ahead of budget

Aviva shares tumbled 7.5% to 253.5p after HSBC analyst Kailesh Mistry warned that dividends could be slashed in half this year.

Concerns that tax changes to pensions in today’s Budget announcement also helped to fuel the shareholder exodus from Britain’s largest insurer.

Reports in the Times newspaper suggested that the 20.5p drop in share price was due to Mistry’s dividend cut warning as Aviva’s management seeks to shore up the company’s capital.

The Guardian and the Telegraph reported that shareholders’ confidence has been shaken by rumours that Chancellor Alistair Darling plans to abolish the higher rate of tax (HRT) relief for pensions contributions in his budget today.

Other insurers that saw their share price slide yesterday included Old Mutual, dropping 3.3p to 56.5p, Standard Life, down 8.7p to 178.2p, Friends Provident, which fell 2.4p to 63.6p, and Legal & General, sliding 1.9p to 47.2p.

Merrill Lynch warned that abolishing HRT relief for pensions would be ‘bad news’ for the UK insurance industry.

 

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