Norwich Union Avia bonus payout under threat
A bonus payout to one million policyholders in two of Norwich Union Life’s with-profits funds may not go ahead after recent dramatic falls in the stock market.
In July Aviva announced the reattribution process which would see payments of at least £400 and an average of £1,000 to eligible policyholders in Norwich Unions CGNU Life and CULAC funds. Policyholders could choose weather or not to accept the cash offer in return for giving up their right to receive any possible future payouts from the funds’ inherited estates. The payouts were to come from shareholder funds, not the inherited estate or the with-profits funds.
Now a report in the FT casts doubt on whether the payout will go ahead. The payment deal was originally negotiated on behalf of policyholders by the Office of the Policy Holder Advocate. According to the FT, the Advocate is assuming the payment will go ahead. Aviva’s Finance Director was reported to have said the deal wasn’t a “commitment” and if the current market conditions were to continue, the payment wouldn’t be made. He said the £2.1 billion special bonus pledged by Aviva in February would still be paid.
If the reattribution payments don’t go ahead it will be yet another blow for policyholders, already suffering from the financial turmoil created by the credit crunch.
UPDATE: Latest on Norwich union reattribution cut
December 2nd, 2008 at 11:47 am
There does not seem to be anything happening with the reattribution. What is the current position.
December 3rd, 2008 at 1:56 pm
Norwich Union’s response to a telephone enquiry was that they will contact individual policyholders with offers in winter 2008 / spring 2009. This is repeated on the reattribution part of their website https://www.life.norwich-union.com/fundtransfer/announce/ . I’m not aware of any further information on the possibility of canceling the payment.
The FTSE 100 has been under 5000 since October and this was one of the terms that could cause reconsideration. Clarity has not been one of the features of this process!
January 2nd, 2009 at 4:57 am
Like original sum assured promise,later 6% promise this bonus is yet another dose of Scotch Mist.It is high time Aviva stopped this behaviour.
January 15th, 2009 at 10:52 am
Our 10 year bond matures in May 2009.I wonder if we will get any reattribution if we withdraw?
February 4th, 2009 at 3:54 pm
When I took out my bond 7 years ago the monthly sums assured by the financial adviser has never materialised. It now seems the talk of reattribution of funds has taken the same road, I am afraid I don’t believe in anything they say. But I do believe the safe thing is to cut my losses and get out.
I am fed up reading what they might do, but never do. It is like the action of our present government, lets hold another review. In other words they might do something. I feel sorry for Mrs Spotiswode, all that work and money at £250,000 a year. She might have to cope with another review.
February 9th, 2009 at 12:54 pm
an utter disgrace! More reasons to fuel disillusionment with the system.
February 11th, 2009 at 5:02 am
the longer they wait the more the market will worsen the less they wiil pay out.
April 23rd, 2009 at 2:01 pm
A total shambles (as expected) Spottiswood & Co should crawl into a corner and hide from society.
April 25th, 2009 at 8:52 pm
Like others I have no confidence whatsoever that any significant payout will be made in a reasonable timeframe. The whole thing is unbelievable. Overpaid negotiators who are taking so long to come to a deal that things keep changing. I’ve held off getting out of my endowment in the vain hope that a payment may be coming. The so called special bonus last year was very opaque – my info letter did not actually say how much it was. Norwich Union/Aviva are an awful company and I will never do business with them again. And as to the utter waste of money on the re-naming campaign – words fail me.