An Aviva PLC (LSE:AV.) first-quarter update offers “more downside than upside risk”, Barclays said, bemoaning “opaque” forecast clarity.
Metrics in life insurance “can swing meaningfully depending on bulk annuity activity”, analysts at the investment bank warned ahead of the FTSE 100 group's trading update on Wednesday, with only around £1bn of bulk annuity flows expected as this is normally more of a feature in the second half of the year.
Elsewhere in the life business only “modest growth" is predicted.
“We expect volumes in general insurance to grow, but the extent of growth is uncertain, and peer results on both volumes and margins were disparate,” they said.
Barclays also notes that the solvency ratio should also decline following the payment of the final dividend and buy-back.
Deutsche Bank issued a similar outlook, believing the FTSE 100 firm’s update should be a prelude to further catalysts in the year.
Analyst Rhea Shah does not expect the update itself to act as a driver to the share price but will nonetheless show “mostly positive momentum continuing for the group.”