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Aviva share price: ShoreCap weighs in on insurer’s new product

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Shore Capital has placed Aviva (LON:AV) ‘under review’ after the insurer unveiled a new car and home insurance concept, Citywire reports. The news comes after Barclays trimmed its stance on the company last month, having lowered their earnings estimates.

Aviva’s share price has fallen deep into the red in London in today’s session, having given up 2.83 percent to 386.46p as of 09:51 GMT. The stock is fractionally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 2.24 percent lower at 6,766.46 points. The group’s shares have given up more than 22 percent of their value over the past year, as compared with about a 7.7-percent dip in the Footsie.

ShoreCap weighs in on Aviva

Citywire reported yesterday that Shore Capital analyst Paul De’Ath had placed his recommendation and target price ‘under review’ after the FTSE 100 insurer launched AvivaPlus, which guarantees new customers will receive the same price as renewal customers. The analyst said that the key question was ‘what price level the product comes in at’.

“One would assume that in order to make a sufficient profit from the product it will need to be priced higher than the best discounted new business rates currently offered on price comparison websites,” he continued, adding that competitors would be watching to see if “this could be a new dawn for the industry,” while cautioning that “without either regulatory intervention or a collective move by the industry it is unlikely that the traditional competitive discounting will leave the industry anytime soon”.

Other analysts on insurer

The 16 analysts offering 12-month price targets for Aviva for the Financial Times have a median target of 540.00p on the shares, with a high estimate of 636.00p and a low estimate of 490.00p. As of December 1, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group has it that the company will outperform the market.  

As of 09:55 GMT, Thursday, 06 December, Aviva plc share price is 385.10p.

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