Norwich Union Life has announced a one-off, special bonus worth around GBP2.1 billion for around 1.1 million with-profits policyholders in its CGNU Life and CULAC with-profits funds.
According to Norwich, the bonus will be used to enhance policy values by around 10% in total in three installments. In accordance with the way the funds are run, this bonus distribution is being split on a 90/10 basis between policyholders and shareholders with policyholders receiving a total of GBP2.1 billion and shareholders GBP230 million.
Norwich has reported that this special bonus addition has been made possible by the strength of the two with-profits funds and a change to the investment strategy for supporting policy guarantees. This change will not affect normal policy returns nor will it impact on policyholders’ security or alter the type of investments backing their policies.
Mark Hodges, CEO of Norwich Union Life, said: This is fantastic news for qualifying policyholders. These funds are very strong, with good equity backing ratios and highly competitive returns. As a result of the funds’ financial strength, performance, and the changes made to our investment strategy we can release around half of the inherited estate – 90% to our policyholders and 10% to shareholders. This approach has been endorsed by our with-profits committee.