In the first round of 'with profits' bonus declarations for 2004, a number of providers have slashed bonuses.
Clerical Medical, Axa Equity and Law, and Ecclesiastical Insurance have all reduced their annual with-profits bonuses by half to start the bonus declaration season. These cuts have happened despite a 7.5% rise in the stockmarket over 2004.
Our view
This is disappointing news for investors. Expect more to follow suit. It will take some time for insurance companies long term life funds to recover from stockmarket falls over the last few years.