Life insurers should keep dividends
UK life insurance companies are sufficiently capitalised and should maintain their dividend payments, according to recent research by Ming Zhu, Insurance research analyst.
The capital positions of insurers are resilient, with sufficient credit default reserves compared with historical defaults in the last 30 years, even in the event of further market turbulence. Ming’s research says any suspension of dividends by life insurers is unnecessary, and any suspension would defeat the purpose of Solvency II.
The regulations were put in place to ensure life insurers could withstand a 1-in-200 year event, such as the one we are experiencing due to the COVID-19 pandemic.