UK life assurer Standard Life is believed to be considering offering a fixed minimum payout to all of its policy holders in order to gain their backing for a plan to demutualize.
The company is reported to be contemplating offering a fixed minimum payout of between GBP250 and GBP500 to all 2.4 million policyholders to secure their support for the change in status. A further proportioned payment will be made on the basis of individuals’ policy value.
Standard Life is eyeing a floatation on the London stock market but it must demutualize to do this. Policyholders will vote on the proposed plan in May or June this year. However, the company fears that those facing a small ‘windfall’ due to having a low value or young policy will not back the move unless a more generous minimum payout is offered. The assurer’s board will meet shortly to discuss the value of the minimum payout.
If Standard Life is able to acquire the 75% support it needs from policyholders it is expected to float with a market valuation of about GBP4 billion.