UK’s biggest insurer backs disliked new accounting system
Britain's largest insurer Aviva has said it will continue to use the controversial Market Consistent Embedded Value (MCEV) accounting standard despite a forum of chief financial officers delaying its industry-wide implementation until 2011, the Telegraph reports.
European Insurers had been set to adopt MCEV for the year-end 2009 results. But the CFO Forum agreed MCEV could lead to confusing results during periods of economic turbulence, as they had been designed during stable market conditions.
Denis Duverne, chief financial officer at French insurer Axa, one of MCEV's founding fathers, has admitted MCEV is not understood. Mr Duverne was the forum's chairman until January.
Aviva shares fell 43% on the day it showed a full-year MCEV loss after tax of £7.7bn in March.
Philip Scott, Aviva CFO and current chairman of the forum, said he was optimistic that insurers who had not adopted MCEV would do so before 2011.
The Guardian reported that Aviva’s shares rose 13.5p to 348p yesterday.
