Norwich Union is again cutting with profits payouts by around 12% and reducing annual bonuses, blaming the stock market as the culprit.
Annual bonuses for investments have been reduced to 3.25% from 3.75%. Stakeholder pension bonuses have been reduced to 3.5% from 4.25%.
In terms of payouts, these have been reduced by between 1% and 15% although the average cut is thought to be around 12%.
Norwich Union is said to be reviewing with profits bonus rates regularly but is more positive in terms of with profits for the future. However, as the insurer has less than half of its with profits fund invested in stocks and shares (equities), when a recovery is seen in stock market investments, Norwich Union will not totally benefit.
On the plus side, limiting the amount of the fund invested in equities does also reduce the risk of loss to the fund.
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