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London, 10 March 2003. Zurich Financial Services has announced today that Eagle Star bonus rates and payouts in 2003 will be lower than last year as a direct result of continuing falling stock markets.
"The tough market conditions continue to have an adverse impact on the bonus payments for all with profits companies. Eagle Star has been able to pay our customers a bonus although at a reduced level in comparison with 2002. By taking this prudent step, we are seeking to treat all our customers fairly and provide realistic investment returns," said Jim Reeve, Director of Eagle Star.
For unitised with-profits policies Eagle Star's new annual bonus rate for its series 5 fund is 2.5% for life policies and 3.5% for pensions policies. Bonus rates for other unitised with profits funds vary between 1.5% and 4%. Once added this bonus cannot be taken away from policyholders who stay to maturity.
Conventional with-profits policies will receive reversionary bonuses of 0.5% for life policies and between 0.25% and 1.0% for pensions policies. Most life policies that mature during the year will also receive a terminal bonus.
Jim Reeve continued: "With-profits still provide valuable and reliable returns if maintained for their full term, even though we are unlikely to see returns as high as we've experienced in the late '90's in the foreseeable future. Eagle Star with profit funds are managed by the award-winning fund manager Threadneedle and are closed to new business. Last year, Threadneedle delivered a -12% return on the 100:0 unitised with-profit fund and -4% on the 90:10 conventional fund - a good return given the backdrop of a 24% fall in stock markets and on a par with our main competitors."
Eagle Star will be writing to all conventional with-profits customers in the next few weeks to notify them of the new bonus rates applying to their plans. Unitised with-profits customers will receive notification as part of their next annual unit statement. A special bonus information centre for Eagle Star customers will be available from 10 March to 25 April, open from 8.00am to 6.00pm, Monday to Friday. Tel: 0845 7234006.
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Media information: Erica Harper 01793 503969
Notes to editors:
- In general, for conventional with-profits policies, maturity payouts will be reduced by around 20%.
- For the majority of policies in the unitised with-profits fund, the average MVR is around 20% although the actual MVR applied is policy specific and varies from day to day. MVRs do not apply on death or at prescribed non-MVR points.
- Eagle Star announced the closure to new business of its unitised with-profits fund in December 2002.
- We do not give past performance figures for products we no longer market - instead this information will only be supplied to individual customers.
- Eagle Star is part of the Zurich Group.
The Zurich Financial Services Group is an insurance-based financial services provider that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in approximately 60 countries and employs well over 70,000 people.
Eagle Star is part of Zurich Financial Services, (UKISA) which is part of the Zurich Financial Services Group and comprises the Group's operations in the UK, Ireland and International Businesses. | 