Aviva has u-turned on plans to scrap preference shares to investors.
In a statement this morning, the insurance giant said that since it mooted the plans in its annual results earlier this month, it had discussed the issue with investors who had provided “strong feedback and criticism.”
Based on the responses, Aviva says it has “decided to take no action to cancel its preference shares”.
However, the firm must still find a way to meet regulatory capital requirements in the future, since preference shares will not count towards its position in 2026 as rules stand.
The statement says: “Aviva will work towards obtaining regulatory approval for the preference shares, or a suitable substitute, to qualify as capital from 2026 onwards.”
While it had received legal advice that it could cancel the preference shares at par value, based on a business review to balance investor with company needs, Aviva says that both investors and consumers would receive greater assurance now.
Aviva chief executive Mark Wilson says: “I am very aware that Aviva is in a position of trust with our customers and investors . To maintain that trust it is critical that we listen to and act on feedback. The reputation of Aviva, and the trust people have in us, is paramount. Our announcement today means that preference shareholders can rest secure in their holdings. The board and I have a duty to consider not just the financial implications of our actions. We must consider the impact to Aviva’s wider reputation. I hope our decision today goes some way to restoring that trust.”