Covid-19 losses and macro impact manageable so far. The solvency II coverage ratio declined from 206% to 182% in Q1 (with no final dividend paid). Solvency II own funds per share declined 12% from 423p to 372p per share. On top of the impact of wider credit spreads, lower government bond yields and lower equity markets, the company updated for Covid-19 GI losses, released Brexit property allowance (£440m), an assumed 15% fall in commercial property and 12% fall in residential property, and assumed one letter downgrade on 10% of BBB debt and 5% of A debt. Bar the impact from Covid-19 on FY20E earnings and balance sheet, our forecasts, already materially below consensus, are little changed, post FY19 and Q1 2020. The key impact for FY21E (EPS -1%) is lower growth and lower margins in Fund Management, partly offset by materially lower central costs, with Life better and GI worse. Dividend policy could be resumed, which would be a positive. On our forecasts, the previous dividend policy of nominal growth could be returned to and would equate to a c.80% payout ratio of cash generation after interest costs. We estimate this would be a similar ratio to Phoenix, before cash from management actions and after cash investment in new business. There is risk to the dividend if macro worsens and leverage increases. We estimate that a further 20% fall in own funds would take leverage to unsustainable levels. We therefore move from a yield-based valuation (previously 7.5% target yield) to price to own funds, targeting an 0.8x 2020E multiple, broadly in-line with where Chesnara and Phoenix trade, but below our target multiples for those peers. Management said it would have a clearer view on the Covid-19 impact end-June, which suggests a July trading update.