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Aviva plc Message Board

  • andybreav andybreav Apr 10, 2012 12:43 PM Flag

    Why the sharp decline

    Can anyone explain what has recently happened to this stock? It was doing so well but has plunged of late. The preliminary numbers the company released on March 8 looked good. Is it just the general woes in Europe. I know this board has little activity but I am hoping someone will read this and offer an explanation.

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    • I think the current woes in Europe are the explanation for the decrease in share price. However, it is not just perception, the credit spreads in Europe hVe increased again significantly and this has an negative impact on life insurers book value, which is evident in AV annual report , if you look beyond just the operating numbers.

      My general baser action is that long tail insurers like AV always move inverse to credit spreads and that is what we see happening here.

 
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