Amid the ongoing efforts by companies to preserve cash, few sectors have been spared from dividend cuts. Investors in banks, housebuilders and even some utilities have been left nursing losses to both equity and normally dependable sources of income. By some estimates, up to half of dividends could end up slashed this year.
One industry that is yet to fully face this reckoning is insurance, where the impact of the coronavirus is neither clear nor likely to be uniform – given the diversity of business models and product lines within the sector.
However, shares in well-followed income stocks including Aviva (AV.), Legal & General (LGEN) and RSA (RSA) have whipsawed in recent days as investors have struggled to form a consensus on whether final dividends already declared for 2019 are safe. Recent weeks have provided numerous examples of blue-chip boards cancelling payouts that had already gone ex-dividend.