AVIVA announce £11.2bn pre-tax loss

RichardJW1

Having just read this and considered the possibility that they will be the next to go down the pan a lump has just come to my throat having just invested in one of their 'Core Funds Bonds'.
I don't have the full copy of the contract in front of me (travelling abroad now) so can't recall what the security is, only I have read that 100% of the saving is inflation protected guaranteed.....tell me I am wrong but that isn't the same as covering if the company goes bankrupt.

Anyone else invested with them?......guess someone will pipe up saying that I was mad to work with them in the current climate.

What happens if they do 'go', have I lost everything?

yours in eternal hope

Richard

dunstonh

Having just read this and considered the possibility that they will be the next to go down the pan

There will be a others in the queue before they go down.

having just invested in one of their 'Core Funds Bonds'.

Not heard of that product.

only I have read that 100% of the saving is inflation protected guaranteed.....

That fund is available in their portfolio step down bond and porfolio level bond. Is that what you have?

Anyone else invested with them?......guess someone will pipe up saying that I was mad to work with them in the current climate.

I am putting clients with them every week and will continue to do so. They are one of the most financially secure insurers in the UK. A loss doesnt suddenly make them a basketcase. The product you have is heavily in demand and the capital guarantees it has along with a bonus rate that is typically 2 to 3 times higher than average savings rates makes it a good product for consideration. If you were lucky enough to get in before the January changes (which saw the allocation rate drop from around 108% to 100-102%) then even better.

tell me I am wrong but that isn't the same as covering if the company goes bankrupt.

You are wrong.

What happens if they do 'go', have I lost everything?

No. On the assumption that it is one of the portfolio bonds, you have FSCS protection of 100% of the first £2000 and 90% of the rest with no upper limit.

RichardJW1

It's called a Core Funds Bond, Life version....tied for 5 years.

It was only that I'd seen the name on the 'net and all of a sudden things came a lot "closer to home"

Thanks for the clarification on this, Dunstonh. I feel easier now.

dunstonh

It's called a Core Funds Bond, Life version....tied for 5 years.

Ahh, I have sussed it. You bought the offshore version not the onshore version.

Now for a bit of bad news. FSCS protection only applies to the onshore version. Not the offshore version. However, there will be some potential protection in place from the offshore location. That said, this is Norwich Union. I know the same would have been said for AIG in the US but NU is a victim of being a big name and getting media coverage that most of the smaller names wouldnt get for the same thing.

NU going down could do more damage to the UK economy than Northern Rock or Bradford & Bingley so you would expect the Govt to step in if required. However, NU have said they have enough to survive another 50% drop in the markets. Plus, they can always cancel (outright) the reattribution and use that money to shore up the reserves.

mrposhman

That was the restated loss. The accounting loss was £885m. I know still big but not into the billions.

I have shares in them and I was gutted at watching the slide yesterday as I felt there statement and accounts were not as bad as some so would not have expected the fall that we got, but hey we live to live another day i suppose, just unfortunately with a lower net wealth.

soulsaver

RichardJW1 wrote: »

Having just read this and considered the possibility that they will be the next to go down the pan a lump has just come to my throat having just invested in one of their 'Core Funds Bonds'.
I don't have the full copy of the contract in front of me (travelling abroad now) so can't recall what the security is, only I have read that 100% of the saving is inflation protected guaranteed.....tell me I am wrong but that isn't the same as covering if the company goes bankrupt.

Anyone else invested with them?......guess someone will pipe up saying that I was mad to work with them in the current climate.

What happens if they do 'go', have I lost everything?

yours in eternal hope

Richard

There are a few final salary schemes invested with them, not least of which is their own. I wonder how they are protected?

RichardJW1

dunstonh wrote: »

Now for a bit of bad news. FSCS protection only applies to the onshore version. Not the offshore version.

I just had a massage from the investment manager he tells me that it's covered in full for the first 100% and 90% thereafter.

I also found something on the web which would substantiate his statement


http://www.bmas.co.uk/mxselect/content/bma/FSCS-Factsheet.pdf

nzseries1

RichardJW1 wrote: »

I just had a massage from the investment manager

Is a massage a typical service from an investment manager? If so, I need to find a new one!

Reaper

There is an error in your link. Here is the correct one:
http://www.bmas.co.uk/mxselect/content/bma/FSCS-Factsheet.pdf

dunstonh

RichardJW1 wrote: »

I just had a massage from the investment manager he tells me that it's covered in full for the first 100% and 90% thereafter.

I also found something on the web which would substantiate his statement


http://www.bmas.co.uk/mxselect/content/bma/FSCS-Factsheet.pdf

I suggest you go back to that investment manager and ask him why all the people using OFFSHORE investment bonds for deposits in Iceland have not been protected under the FSCS.

sabretoothtigger

Aviva has made £11.8bn of commercial loans, the income from which it uses to help pay the pensions it has promised to policyholders.

The insurer on Thursday set aside another £250m for potential defaults on UK commercial loans, taking the provisions to £670m. But some analysts question whether this is enough, given the loans have an average loan-to-value ratio of 103 per cent after recent falls in property values.

“The thesis is that this is nowhere near enough,” says Roman Cizdyn, analyst at Blue Oar Securities.

http://www.ft.com/cms/s/0/f206909c-09c3-11de-add8-0000779fd2ac.html?nclick_check=1

Hopefully not as bad as it sounds. Also they offloaded 600m of property which has to be a positive