Norwich Union Insurance cuts with-profits bonuses

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Norwich Union Insurance cuts with-profits bonuses

Norwich Union has cut bonuses for a number of its with-profits policyholders.

The UK's biggest life insurer has reduced the bonus payouts despite a stock market recovery since early 2003.

Some policies taken out between 1998 and 2002 have now had bonuses reduced from 2.5 per cent to two per cent.

Speaking to BBC News, Mike Urmston, Norwich Union's chief actuary said: "The investment climate has improved but the stock market is only now approaching the levels of 1997."

He added that with-profits funds had been "significantly impacted" by the poor stock market performance between 2000 and 2002.

"As a result," Mr Urmston continued, "We have had to cut bonuses on some policies but cuts are less extensive than in previous years."

Norwich Union has cut rates on its highly-valuable, conventional with-profits policies, while many of its unitised policies have been left unchanged.

The insurer maintains that over the long term investors have enjoyed strong growth.

Over the past three years Norwich Union has cut bonuses for many of its 3.3 million policyholders.

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