Swindon, 14 March 2005. Zurich has announced today the annual bonus rates for its with-profits plans.
Zurich's new regular bonus rate for its Series 5 unitised with-profits fund is 1% for both life and pension plans. Bonus rates for Zurich's other unitised with-profits plans vary between 0% and 4%. Once added, this bonus is guaranteed and cannot be taken away from planholders keeping their investment to maturity.
Conventional with-profits life plans will receive a reversionary bonus of 0.25%, and those plans maturing during 2005 will receive a final bonus. Most conventional with-profits pension plans will not receive a reversionary bonus or final bonus this year.
"Despite the with-profits funds' strong performance in 2004, the fall in stock market values from 2000 to 2002 means the guarantees we've given to some investors are still greater than the performance of the fund. As you'd expect, we only add new guaranteed bonuses when we're confident this is justified by the overall performance of the fund. When appropriate, we'll continue to use final bonuses and market value reductions so overall returns to investors are fair for both those leaving the fund and those remaining," said David Carrie, Zurich's Customer Operations Director.
The recent fund performance has allowed Zurich to introduce a final bonus for some unit-linked life plans investing in their 90:10 with-profits fund and to reduce or remove the market value reduction (MVR) on some others. For the 100:0 unitised plans any final bonuses or MVRs are based on fund performance for the duration of the plan and will vary from day to day - the average MVR in 2004 for plans where an MVR applied was around 13%. Some investors received a final bonus during 2004.
Zurich will be writing to all with-profits customers shortly to notify them of the new bonus rates applying to their plans.
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Media information: Debi Isaac 01793 503810 / Nicola Bryson 01793 503354
Notes to editors:
- For a typical 25-year Conventional with-profit endowment policy, the maturity payout will reduce by 9%.
- Market Value Reductions may apply whenever money is taken out of the with-profits fund to ensure that policyholders receive their fair share of the fund. However, MVRs do not apply on death or at prescribed non-MVR points.
- Zurich 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.
Zurich Assurance is an insurance-based financial services provider with a global network that focuses its activities on its key markets in North America and Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. Zurich has offices in more than 50 countries and employs about 62,000 people.
