Many are furious at Scottish Life for deciding that it will not pay a special bonus to 'with profits' policyholders in light of members losing their rights to vote when they demutualised after being taken over by London Life last year.
The special annual reversionary bonus estimated at an average of £650 per policyholder would have been a welcome additional bonus to people's savings pots.
Scottish Life have said that they have chosen to take this course of action in light of recent difficult investment market conditions and wishing to protect policyholders who are invested in their now closed 'with profits' fund.
Our view
This does nothing to help the reputation of insurance companies when making a "promise" that they have now failed to deliver. We can understand a provider wishing to protect it's policyholders for long term benefit and future bonuses.
However, it is those same policyholders who have now not received a bonus and will, we assume, get watered down versions of this bonus in the form of stronger annual bonuses in the forthcoming years. It is a cosmetic move to defer the payment of a bonus for loss of voting rights, enabling Scottish Life to retain some reserves, which, we assume they will try and use for some commercial advantage at a later date.