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Daily Insurance Industry News
Monday 20th of May 2019
May 6, 2009

NU with-profits reattribution devalued to £400m

by Gill Montia

Story link: NU with-profits reattribution devalued to £400m

NU with-profits reattribution devalued to £400m

Norwich Union (NU) with-profits policyholders who have been waiting patiently for news of the reattribution of surplus funds will be disappointed to learn that parent company, Aviva, has fixed the total payout at £400 million rather than the £1 billion promised earlier.

In July of last year, 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 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 NU customers expected to receive their cash early this year.

However, in February Aviva announced that market volatility had reduced the value of the fund significantly since the offer was agreed.

Under the new agreement, policyholders who were originally expecting an average payout of £1,000 will receive a minimum payment of £200, although according to Aviva, 90% will benefit by between £200 and £1,150.

Savers can choose whether or not to accept the windfall and those who opt out of the reattribution will continue to receive annual bonuses.

 

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