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Daily Insurance Industry News
Saturday 17th of November 2018
October 28, 2008

Aviva seeks to reassure investors

by David Masters

Story link: Aviva seeks to reassure investors

Aviva seeks to reassure investors

London-based Aviva Plc, the biggest insurer in the UK by assets, sought to reassure investors today as it posted sales results for the third quarter.

The insurer told shareholders that its capital reserves are ‘very strong’ and reported a 12% rise in life and pension sales during the first nine months of 2008.

New business for the nine month period to 30th September was £25.7 billion, compared to £22.9 billion in the first nine months of 2007.

CEO Andrew Moss said in addition to the company’s ‘very strong’ capital position, Aviva has made sure it has ‘extra protection against equity market falls’.

The company has around £1.3 billion of surplus capital.

Although this sounds strong, it is £600 million less than at the end of September.

An additional 20% drop in equities would reduce this surplus by a further £400 million.

Aviva has lost more than half of its market value on the stock markets this month as investors fear that the company may be forced to take asset markdowns and raise capital.

The insurer, however, says it has increased its hedge protection against a fall in equity markets.

Following the reassurance Aviva’s share price climbed 10% to 271.5 pence, the largest increase in over five weeks.

This leaves the company with a market value of £7.2 billion.

 

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