Aviva and L&G to cut dividend

Aviva and Legal & General (L&G) will cut their dividend payment by as much as half this week, the Telegraph reports.

Nic Clarke, an analyst at Charles Stanley, said: "By returning £1bn of capital to shareholders in 2007/08 management has exposed L&G to lingering concerns that it is not adequately capitalised, given the group's sizeable exposure to CDOs and asset-backed securities and to fund profitable new business."

Aviva announces its interim figures on Thursday amid concern that the dividend will be cut.

EU rules play a part

Along with oil companies, the insurers are among the largest dividend payers in the FTSE 100, the Telegraph said.

EU rules on insurer solvency are adding to pressure to cut dividends and boost balance sheets, the Telegraph said.