Britannic Assurance's interim results have shown a profit for the group this year of £44m although this is down from last year's £58m, The amount of free-assets held has increased from 6.5% to 10%. This basically means that 10% of the assets of the company are not linked to any form of liability or debt.
Paul Thompson, chief executive of Britannic Assurance said that the group was now renegotiating its banking arrangements and conducting capital risk assessments. He commented "we are confident of achieving these steps, which should then allow us to resume annual bonus and dividend payments".
Our View:
By taking the decision to suspend bonuses, Britannic has increased their financial viability, which is good for with profits policyholders. Britannic is also continually addressing a number of issues and this shows their commitment to everyone. Returns on investments have been at a massive low point for the last three years and all companies have been hit. Britannic did what they felt was best at the time and we believe the right move was made. Now that stock markets are starting to pick up and companies are making money again, Britannic have not 'hung around' but have set their stall out with regards to bonuses.
In our view, policyholders need to watch this space in terms of the level of bonuses that re-commence. If some policies end up not receiving bonuses then policyholders need to take advice as to whether they should remain with Britannic or not.