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Daily Insurance Industry News
Tuesday 21st of November 2017
December 31, 2007

Equitable Life policyholders transfer to Prudential

by Gill Montia

Story link: Equitable Life policyholders transfer to Prudential

Equitable Life policyholders transfer to Prudential

Equitable Life is today transferring fifty thousand with-profits policies to the Prudential, in line with a £1.7 billion agreement drawn up in early 2007.

The policyholders have been trapped with Equitable since its virtual collapse in 2000 and over the years have seen the value of their investments dwindle.

The policies pay an income in retirement linked to the performance of Equitable’s with-profits fund, and in some cases policyholders have seen their annual incomes drop by up to 50%.

The insurer has not written any new business since 2000 and actually reduced the value of policyholders’ investments after an unsuccessful legal case involving guaranteed annuity rates.

The majority of Equitable’s with-profits policyholders expect the move to Prudential to be beneficial, as their savings will be transferred from a low-risk fund to one that has 70% of its investments in equities and property.

According to Nick Prettejohn, Prudential’s UK chief executive, the transfer will provide “improved prospects and greater security”.

Peter Scawen, of the Equitable Life Trapped Annuitants group, regards the transfer as “a reasonable deal” which will probably leave policyholders better off, or at least reduce the rate of decline of their investments.

 

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