Norwich Union’s with-profits sales have risen sharply since the launch of its Inflation Protected Guarantee.
- Unique inflation protected guarantee boosts sales by 44%
Norwich Union’s with-profits sales have risen sharply since the launch of its Inflation Protected Guarantee.
In the nine weeks since launch on 30 January 2006, with-profit sales through financial advisers and offshore channels totaled Ł108m – 44% higher than the same period in 2005.
The guarantee - launched on 30 January 2006 - protects customers’ original investments and tracks the Retail Price Index (RPI). The guarantee means that investors who keep all their money invested for at least five years will either benefit from the growth in the with-profit fund or get back at least what they paid in – plus inflation. Offshore investors will track a different inflation index (see notes to editors).
The strength of the with-profit fund enables Norwich Union to offer this valuable guarantee, which is available at no extra charge to investors.
Mike Kirsch, commercial director at Norwich Union, said: “We were confident that the Inflation Protected Guarantee would prove popular with our customers and the sales figures back this up.
“It’s a win-win scenario for the investors. It means investors can benefit from growth in the With-Profit fund and guarantees that after five years their money is protected in real terms. The guarantee has proved particularly popular with offshore investors.”
The Inflation Protected Guarantee is available through the Portfolio bond and offshore bonds. It applies to money held in the fund for at least five years and moved out in full on any subsequent date. Early exit penalties may apply if money is withdrawn from the bond before the 5th anniversary.
The offer is available for a limited time only. Any withdrawals mean the amount guaranteed is reduced in proportion to the number of units cancelled.
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Press office contacts:
David Gwyer 01904 452828
07800 699508 (Out of hours)
James Evans 01904 452791
07800 699525 (Out of hours)
Notes to Editors
How the Inflation Protected Guarantee might work
This example shows how the guarantee might work over a seven-year period
| Example 1 | Example 2 | |
| Initial Premium | Ł10,000 | Ł10,000 |
| Value of With-Profit Fund after 7 years | Ł11,600 | Ł14,000 |
| Increase in inflation measure over 7 years | 19% | 19% |
| Guaranteed amount after 7 years | Ł11,900 | Ł11,900 |
| Value after seven years, if investment is fully moved out of With-Profit Fund | Ł11,900 | Ł14,000 |
| Guarantee applies | Guarantee doesn’t apply |
About the Retail Prices Index (RPI)
RPI is a measure of inflation. It is measured by taking a large number of prices, working out how much each price has changed and then weighting the price changes according to their importance. Norwich Union will use figures published by the Office of National Statistics.
If offshore bond investors are investing in dollar or euro funds, the guarantee will be linked to an appropriate index.
About the Norwich Union Portfolio investment bond
The Norwich Union Portfolio bond offers a flexible way to invest for growth or income. Its minimum investment is Ł5,000 and investors can choose to put their money in a selection of funds including with-profits, equity, distribution, property, bonds and cash, which are run by Norwich Union and other fund managers.
- Is simple and flexible - offering a wide choice of internal and external funds and a choice of two charging structures within a single bond
- Has clear and easy to understand charges - explicit charging provides investors with a clear picture of the charges applicable to their investment
Offers investors the choice of income and growth funds. Investors can choose from a range of 31 internal funds as well as more than 100 funds managed by 12 industry-renowned fund managers.