Improved bonuses at Norwich Union

Norwich Union expects to pay more than £140 million (€177 million) in claims and payments due on its policies this year.

Mr Grant Barrans, managing director of its life and pensions division, said the bonus declaration had been framed against the background of excellent returns on its equity and property investments and a substantial reduction in interest rates and gilt yields.

For a policyholder saving £50 a month in a 10 year with-profits endowment plan, the bonus means they can expect a real annual rate of return of 7.3 per cent and a total payout of £10,051 compared with £9,663 in 1998.

For a policyholder who had saved £50 a month in a 20-year with profits endowment plan their real rate of return is 5.6 per cent a year, yielding a total payout of £46,821.

The bonuses will be paid on all regular premium plans effected after April 1st, 1992, ordinary business single premium plans held since 1991, and on unitised with-profits policies and traditional with-profits policies.

For the first time an additional bonus of 4 per cent will be introduced for unitised with-profits pension and ordinary business purchased in 1997.