Life insurance: Norwich Union bonus with-profits payout
Norwich Union £2.3bn special bonus for policyholders
Tuesday, 05 Feb 2008 11:44
Norwich Union with-profits life insurance policy holders are to share in a £2.3 billion windfall from the insurer.
The windfall from two with-profits funds means £2.1 billion will be shared by 1.1 million policyholders – around £1,900 each – and £230 million will go to share holders.
Aviva, owner of Norwich Union, made it clear the payout will not affect normal policy returns nor will it hit policyholders' security.
To receive the bonus – enhancing policy values by ten per cent in total – a policyholder will need to have a qualifying policy invested in the CGNU Life or CULAC with-profits funds on 1 January 2008.
Mark Hodges, chief executive of Norwich Union Life, said: "As a result of the funds' financial strength, performance, and the changes made to our investment strategy we can release around half of the inherited estate – 90 per cent to our policyholders and 10 per cent to shareholders.
"This special bonus is a major boost to policy values. We continue to believe that well-run, open, with-profits funds deliver real value for long term investors. Over the course of the next few weeks we will be writing to qualifying policyholders to give them more detailed information."
A typical with-bond will see a total bonus of £4,500 – based on a £30,000 investment in 2001, while a 25-year endowment policy taken out in 1885 with a £50 premium will see a bonus of £3,735.
The bonuses will be paid in three installments.