Aviva says too early to estimate coronavirus impact

Aviva said it was too early to estimate the potential impact of the coronavirus epidemic on its business as the insurer sought to reassure the market about its capital strength.

The FTSE 100 company issued an update in light of the COVID-19 outbreak and volatile financial markets. It said it was "well capitalised" and that on 13 March its solvency cover ration was about 175% after allowing for payment of its proposed annual dividend.

Aviva said its estimate did not include any increase in insurance claims or other changes resulting from the COVID-19, which threatens to kill tens of thousands in the UK and cause economic chaos.

"It remains too early to quantify the potential impact on our financial performance arising from COVID-19," Aviva said. "The effect on our financial results will depend on a range of factors, including the extent and duration of the period of disruption and the impact on the global economy. At this point, we remain focused on supporting our customers and colleagues while maintaining our financial and operational resilience."

Fears about a global recession caused by the virus have sent stock markets plunging, reducing the value of investments held by insurance companies, and prompted emergency cuts to interest rates, squeezing insurers' profitability. Aviva said it had expanded its hedging and management of assets and liabilities on equities, interest rates and credit spreads. The company's centre cash position at the end of February was £2.4bn.

The company's shares fell 3.3% to 237.70p.