Norwich Union – the UK’s largest insurance company – has increased the flexibility and introduced a new pricing structure with effect from 2 July on its with-profits annuity policies.
Norwich Union - the UK's largest insurance company - has increased the flexibility and introduced a new pricing structure with effect from 2 July on its with-profits annuity policies.
- Norwich Union's with-profits annuity can now be converted to a conventional annuity at any time after the first anniversary of the policy giving the customer increased flexibility. This means that if the customer has selected a with-profits annuity but then needs the security of a fixed income for life with no exposure to investment changes they can now do this.
- To meet the needs of the changing work practices and financial requirements of the consumer. Norwich Union's with-profits annuity now enables the customer, both new and existing, to change the selected anticipated bonus rate. The number of changes to the annual bonus rate are unlimited but the first two changes can be done without any additional costs.
In addition to the changes, Norwich Union has changed its pricing structure. These changes reflect the improvements in life expectancy - particularly for males and in the longer term should enable us to continue to pay competitive regular and additional bonuses. It is not only the starting income levels that need to be considered when purchasing a with-profits annuity the investment performance of the company must also be considered.
Commenting on the changes, Willie Mowatt, head of retirement and protection at Norwich Union, said: "Consumers today are increasingly on the lookout for flexible products which can adjust to meet their changing needs.
"The changes we are announcing to our with-profits annuity product are designed to reflect these changing requirements. This highlights our belief in the importance of with-profit annuities in retirement income planning."
An example of new and existing rates is shown in the table below for the joint life business.
Male 65/Female 60 joint life last survivor no reduction on first death payable monthly in advance no guaranteed period
Purchase price Ł50,000.
| Company | 0% anticipated bonus rate | 3% anticipated bonus rate | 5% anticipated bonus rate |
| Prudential | Ł1776.72 | Ł2691.00 | Ł3377.40 |
| Standard Life | Ł1812.00 | Ł2670.00 | Ł3306.00 |
| Previous Norwich Union | |||
| Source MoneyŁacts | Ł1737.60 | Ł2623.80 | Ł3286.80 |
| New Norwich Union | Ł1776.48 | Ł2677.8 | Ł3352.92 |
-Ends-
- Future bonuses cannot be predicted or guaranteed.
- The value of a with-profit annuity can go down as well as up and is not guaranteed.
- Full written details are available on request.
Notes to editors:
CGU plc and Norwich Union plc merged on 30 May 2000 to create CGNU plc, the UK's largest insurance group and one of the top-five insurers in Europe with substantial positions in other markets around the world, making it the world's sixth largest insurer based on gross worldwide premiums.
CGNU's principal business activities are long-term savings, fund management and general insurance, with worldwide premium income and retail investment sales from ongoing business of over Ł27 billion and assets under management of more than Ł210 billion.
From October 2000, the combined life and pensions, general insurance and retail fund management businesses in the UK operate under the Norwich Union brand, while the institutional investment business operates under the Morley Fund Management brand.
Norwich Union's news releases are available on the website.
Press office contacts:
| Out of hours | ||
| James Evans | 08703 66 68 78 | 07790 487105 |
| Louise Goffee | 08703 66 68 70 | 07747 764342 |