Apr 8, 2020
Aviva, RSA, Direct Line and Hiscox pull dividends
UK insurers Aviva, RSA, Direct Line and Hiscox have scrapped plans to pay dividends, bowing to pressure from the Bank of England as the coronavirus pandemic hits the economy and financial markets. The move risks upsetting shareholders for whom dividends are one of the chief attractions of insurance companies. Not all of Britain's biggest insurers have yielded to the pressure from the Prudential Regulation Authority, which last week stopped short of banning dividends but in a letter to chief executives urged them to "Maintain safety and soundness" when considering payouts. In a brief statement on Wednesday, the PRA said: "We welcome the prudent decision from some insurance companies today to pause dividends given the uncertainties associated with Covid-19.". Last week Eiopa, the EU's insurance regulator, urged insurers not to pay dividends so that they could protect policyholders and absorb potential losses.
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