Abstracts » Business

Down, but not necessarily out

Article Abstract:

There are a number of factors that can affect the size of annual and terminal bonuses paid by with-profits endowment policies. Bonuses are determined by the performance of insurers' with-profits funds. Furthermore, insurers balance out bonus awards over a number of years, and this can be a subjective process. Many UK life insurers are making lower bonus payments for 1997 than for 1996, even though stock market investors saw high returns in 1997. This is because they believe that stock market performance will decline in the future.

Analysis, Endowment insurance

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Income-ing year good news

Article Abstract:

UK investors will see a fall in charges on endowments and personal pensions following changes in the law which mean that companies have to disclose charges. Existing policy-holders may find their annual charges increase, and returns are reduced for with-profits policies. Longer term interest rates look set to fall in late 1995, and instant access accounts might provide better returns. Investors should avoid obsolete accounts which may offer lower rates of interest.

United Kingdom, Savings

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Amicable's bonus shock

Article Abstract:

Scottish Amicable is reducing the maturity values for some with-profits endowment products by 10%. Annual bonuses are being maintained, though final bonuses are being reduced. This is despite a strong performance by the UK stock market in 1995. Scottish Amicable is following a trend of bonus reductions in the lifeassurance industry, but has cut rates by more than most other companies. The cuts are partly a result of poor trading conditions in 1994.

Scottish Amicable Life Assurance Society

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