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Daily Insurance Industry News
Friday 17th of August 2018
February 24, 2009

Pru with-profits fund loses 19.7%

by Gill Montia

Story link: Pru with-profits fund loses 19.7%

Pru with-profits fund loses 19.7%

Prudential has announced that its with-profits fund lost 19.7% of its pre-tax value during 2008, as a result of exceptional market conditions.

For individual investors up to 10% has been wiped off the value of their savings.

Annual bonus rates have been set at 3% for most with-profits bond and 2% for personal pension policies. Annual bonuses on endowment policies are unchanged.

The firm’s chief actuary, David Belsham, comments: “Although investment markets have performed very poorly in 2008, our policyholders have been protected from the full impact of the market falls and will typically see a reduction of 6% and 10% in their accumulating with-profits policy values”.

Mr Belsham believes this “compares very well with many directly exposed investment options available to customers”.

Prudential says its with-profits fund is supported by an inherited estate of £5.4 billion and has delivered investment returns of 67.2% over 10 years compared with the FTSE All-Share index (total return) of 12.4% over the same period.

In related news, the company recently reported that worldwide sales had increased during 2008, with overall group insurance new business up 5%.

In addition its capital cushion stands at a reassuring £1.7 billion.

 

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