Friends Provident have revealed an overall loss of £242 million, for the first half of this year.
Last year, for the same period, they declared a profit of £19 million. As a result, they have cut with-profits payouts by 6%, which will only affect maturing policies. Regular bonuses, however, will be reduced by 0.5%.
Friends Provident said that falling stockmarkets have led to the negative return on the with-profits fund to the tune of -4.8%, for the first six months of 2002. It added that if markets didn't improve then we can expect to see further bonus cuts.
However, Managing Director Ben Gunn said he was delighted with the results, in view of the fact that Life and pension business rose to £182 million in equivalent premium income from £160 million. Friends Provident acquired Royal & Sun Alliance's asset management business and has doubled its funds under management as a result. It hopes to purchase Royal & Sun Alliance's International Financial Services this year, which according to Friends Provident, will give it a 17% share of the offshore market.