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Daily Insurance Industry News
Wednesday 22nd of May 2019
February 4, 2009

Aviva puts brakes on reattribution of NU with-profits surplus

by Gill Montia

Story link: Aviva puts brakes on reattribution of NU with-profits surplus

Aviva puts brakes on reattribution of NU with-profits surplus

Norwich Union (NU) policyholders expecting a windfall from the reattribution of the insurers’ with-profits fund surplus may be disappointed.

In July of last year NU’s parent company, Aviva, announced that it was prepared to pay an average £1,000 per policy to around 700,000 customers who had invested in GCNU Life or CULAC with-profits funds before November 21st 2006.

Negotiations over the reattribution had dragged on for months because of a dispute over the proportion of the surplus that should be paid to shareholders.

Finally, consumer groups and policyholder advocate, Clare Spottiswoode, were successful in their battle for policyholders to receive the major share and customers were expected to receive their cash early this year.

However, Aviva has now reported that market volatility has reduced the value of the fund significantly since an offer was agreed.

According to the insurer, the offer is no longer fair to both policyholders and shareholders.

In a similar move, Prudential announced in June that it had shelved plans to return part of its £8.7 billion with-profits surplus to policyholders and shareholders.

The company’s chief executive, Nick Prettejohn, said at the time that the money would instead be used to strengthen the fund and protect the interests of future policyholders.

A further update from Aviva is expected in the next few months.

 

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