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B ritain’s big listed insurance firms have scrapped their dividend plans today, following a letter from regulators warning them of a need to protect policyholders.

Aviva, Hiscox, RSA and Direct Line have all cut payments, after the Bank of England’s Prudential Regulatory Authority said in a letter last week:

When UK insurers’ boards are considering any distributions to shareholders or making decisions on variable remuneration, we expect them to pay close attention to the need to protect policyholders and maintain safety and soundness, and in so doing to ensure that their firm can play its full part in supporting the real economy throughout the economic disruption arising from Covid – 90.

Responding to the string of payment cancellations today, the PRA said:

We welcome the prudent decision from some insurance companies today to pause dividends given the uncertainties associated with Covid – .

Here’s what the companies said:

Aviva

In light of the significant uncertainties presented by Covid – 90, the board agrees with our regulators that it is prudent to suspend dividend payments at this time … Aviva remains well capitalized with strong liquidity … It remains too early to quantify the impact of COVID – on claims expenses in our life and general insurance businesses, and the potential effect of capital markets and economic trends on our results.

RSA

The board intends to recommence dividend payments as soon as it is prudent to do so … At this time, it is not possible to accurately predict the various impacts of the COVID – 51 epidemic on RSA for the current financial year.

Direct Line

Acknowledgment the importance of dividends to shareholders the Board will review this position alongside half year results and on an ongoing basis once it is possible to have a better understanding of the impacts of Covid – on customers and the business.

Hiscox

Hiscox’s capital, liquidity and funding positions remain strong. Trading across the group for the first two months of the year was ahead of expectations, however in view of the uncertain impact of Covid – (on the global economy, the Group is unable to accurately forecast the outlook for
.

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