Special Bonus
We’re paying a special bonus
Great news for around 1 million with–profits policies
In February 2008 I was delighted to announce that over the next three years around 1 million with–profits policies will receive special bonuses.
If you were invested in our CGNU Life or CULAC with–profits funds (excluding stakeholder pensions and Provident Mutual policies) on 1 January 2008, then we’ve got some great news for you – you’ve qualified to receive the first of three special bonuses.
By changing the way we manage these with–profit funds we’ve been able to reduce the investment risk. This means we don’t have to set aside so much money to cover these risks. We are committed to sharing this money with eligible customers over the next three years. The changes to the funds’ management are supported by our With–Profits Committee – the body that advises on the management of the funds. The committee includes a majority of independent members to ensure our policyholders’ interests are represented and addressed. It is important to know that the changes to the funds do not reduce the potential for strong investment returns in the future.
We wrote to all eligible customers in March and April 2008 with more information about the special bonuses. Please read on to find out more about what we’re doing and whether or not you might be eligible for a special bonus.
Update: November 2008
I’m pleased to confirm that the process for adding the 2008 special bonus to eligible policies began on 21st November. The addition of the first special bonus is estimated to be complete for all eligible bond, pension and endowment policies by the end of December 2008.
The addition of the 2008 special bonus represents a distribution from the inherited estates of the CGNU Life and CULAC With–Profit Funds of an estimated £700m. I hope this will come as welcome news for our eligible customers at the end of a difficult year, in financial terms.
£1 billion reattribution offer agreed
For those with–profits policyholders who are also eligible for our proposed reattribution payment, I’m delighted to announce that we have now reached agreement with the Policyholder Advocate that a reattribution offer should be put to policyholders. The agreement means that a potential total pot of £1 billion could be shared amongst eligible policyholders in the reattribution of the CGNU Life and CULAC with–profits funds should a reattribution go ahead.
The Financial Services Authority (FSA) has carried out an initial review, and has concluded that the offer is fair and should be put to policyholders. It will make its final review once the policyholder election is complete.
The reattribution offer is separate from, and in addition to, the special bonuses.
Taken together with the £2.1 billion* special bonus distribution to policyholders, the reattribution offer means a potential total of £3.1 billion to be allocated to policyholders. This is equivalent to around 70% of the value of the inherited estates being released to policyholders, if all policyholders voted to accept.
Norwich Union expects to send out voting packs with details of individual offers to eligible policyholders during winter 2008 / spring 2009.
More details are available on our dedicated website.
Thank you for choosing Norwich Union.
Mark Hodges
Chief Executive
Norwich Union Life
* Estimated value of special bonuses as at 1 January 2008. The value of the special bonuses will increase and decrease in line with the value of the underlying assets in the funds.
With-Profits changes
Find out more about our proposed with-profits reorganisation and fund transfer