Aviva to Book GBP385 Million Charge to Post-Tax Profit After Ogden Change
February 28 2017 - 9:53AM
Dow Jones News
By Ian Walker
LONDON--Aviva PLC (AV.LN) said Tuesday it expected to book a
charge of 385 million pounds ($479 million) on its 2016 post-tax
profit, after the U.K. government's change to the personal-injury
damage awards, known as the Ogden rate.
The change will shave two percentage points off the insurance
company's Solvency II capital ratio, a measure of financial
stability, Aviva said. The Solvency II ratio as of June 30 was
174%, with a capital surplus of GBP9.5 billion.
The company said the change wouldn't affect operating profit or
its dividend policy.
The U.K. Lord Chancellor announced plans on Monday to lower the
discount rate to -0.75%, from 2.5%. The rates calculate future
losses in personal injury and fatal accident cases. The calculation
tables take into account life expectancy and provide a range of
discount rates from -2.0% to 3.0%, in steps of 0.5%.
Aviva plans to report 2016 earnings on March 9.
-Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
February 28, 2017 09:38 ET (14:38 GMT)
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