European Insurers Share Prices Fall After Regulator Asks for Dividend Suspensions--Update
By Pietro Lombardi and Adam Clark
The European Union's insurance regulator has asked insurers and
reinsurers in the region to temporarily suspend dividends and
consider a postponement of bonuses amid the coronavirus pandemic,
knocking stocks across the sector.
The European Insurance and Occupational Pensions Authority late
Thursday urged insurers to have a prudent approach to shareholders'
remuneration and variable pay. It wants insurers and reinsurers to
preserve their capital position and ability to absorb potential
losses, as well as ensure the continuity of their services.
The advice sent insurers' share prices dropping across the
continent. Among the biggest fallers were France's CNP Assurances
and the U.K.'s Legal & General Group PLC, which closed around
10% lower. Also hard hit were Dutch companies NN Group NV and Aegon
NV, which lost 6.5% and 8.5%, respectively. The U.K. still follows
European insurance regulation during the Brexit transition.
Some major European insurers have recently said they continue to
expect to pay their previously declared 2019 dividends, including
Germany's Allianz SE and Munich Re, which also closed in the
France's insurance giant AXA SA decided on Friday to postpone
its shareholders' meeting to have more time for talks with
Insurers and reinsurers "should ensure that their assessment of
the overall solvency needs is forward-looking, taking due account
of the current level of uncertainty on the depth, magnitude and
duration of the impacts of Covid-19," the authority said.
"In such context, the variable part of remuneration policies
should be set at a conservative level and should be considered for
postponement," it added.
Write to Pietro Lombardi at Pietro.Lombardi@dowjones.com and
Adam Clark at Adam.Clark@wsj.com.
(END) Dow Jones Newswires
April 03, 2020 14:04 ET (18:04 GMT)
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