Shares in Aviva drops
Tuesday, March 3rd, 2009Aviva’s shares have fallen more than 33% on concerns over the company’s financial strength after it posted a net loss.
Its losses for 2008 were 885m pounds, after a profit of 1.5bn pounds in the previous year, as it was hit by the downturn in the financial markets.
The shares had their largest drop in over 20 years to 190 pounds, after what the firm described as a “tumultous year”.
Aviva said it would be maintaining its dividend to shareholders.
The insurer said its loss was “predictable” and that is underlying business remained strong.
“Maintaining our capital strength has been a priority for us and remains so this year”, chief executive Andrew Moss said. We have undertaken a thorough review of the value of our assets and liabilities and have made cautious provision for future losses.
The company wrote off 8%of it’s total corporate bond holdings because of requirements to report the debt as its market value. “In current conditions, market values are very low”, Aviva said.
