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(Reuters) — French insurer Axa SA said on Wednesday it would pay a 2019 dividend to shareholders, ignoring calls from EU regulators to pause the payments and conserve cash to better weather the coronavirus outbreak.
The European Union's umbrella body for regulators, EIOPA, has urged the temporary suspension of dividends, a move its head told Reuters was backed almost unanimously by the bloc's individual country watchdogs.
German insurer Allianz SE and Italian insurer Assicurazioni Generali SpA have also announced dividend payments in recent weeks, further eroding the standing of one of the EU authorities set up in the wake of the financial crash.
However, Axa said it would cut its dividend to 0.73 euros per share ($0.82) from a planned payout of 1.43 euros.
It did not immediately reply to a request for further comment.
French watchdog ACPR declined to comment on whether they supported Axa's decision.
Axa added it could consider proposing an additional fourth-quarter payout of up to 0.70 euros per share if financial market conditions improved.
The company said last month that the crisis would hit its 2020 earnings, adding it could face claims of about 500 million euros ($560 million) for event cancellations.
It suffered a fresh setback last month when a Paris court ruled that it should pay a restaurant owner two months of revenue losses caused by the pandemic.
Axa had argued its policy did not cover business disruption caused by the health crisis. The ruling prompted it to say that it would meet the bulk of business interruption claims from some restaurant owners in France.
Before Axa's decision, EIOPA Chairman Gabriel Bernardino told Reuters that there were "different views" on dividend restraint and that the final say was with national authorities.
"These are not normal circumstances," he said. "We are under unprecedented circumstances."
More insurance and risk management news on the coronavirus crisis here.
KC Suri, director of U.K.-based cinema chain Reel Cinemas Ltd., said that French insurer Axa SA has refused to pay up to £7 million ($9 million) for claims related to the coronavirus lockdown, The Telegraph reports. Axa had indicated in March that the chain's "denial of access" cover would pay out for losses if a statutory authority ordered screens to close, Mr. Suri said. U.K.'s prime minister Boris Johnson forced theaters to shut down on March 20 to contain the spread of the virus.