MEMBERS of the Norwich Union have overwhelmingly approved the insurer's plans to float on the London Stock Exchange.

Norwich members, who include 150,000 Irish policyholders, voted by more than 98 per cent in favour of the flotation yesterday. The official result will be announced on Tuesday at an extraordinary general meeting, where up to another 200 votes will be included.

The loss of mutual status and flotation of the company, the first mutually owned British insurer to do so will value it at around £5 billion, making it one of Britain's 50 largest companies.

As part of its flotation plans, Norwich Union is giving around £3.1 billion worth of free shares to its policyholders and staff. It is also planning to raise a further £1.75 billion on the London market to strengthen its financial position.

Almost two million policyholders with life, pension or annuity policies will now receive shares worth an average of £800. Another one million policyholders with non profit policies, such as mortgage protection policies, will receive a fixed handout of shares worth between £330 and £400.

The 150,000 Irish policyholders will share up to £170 million worth of free shares when the company converts to a publicly quoted company in June. Norwich Union's 10,000 staff will also get 150 free shares each.

Norwich Union needed approval for the flotation from 75 per cent of its members who voted on the proposal. Yesterday it said that 1.85 million votes were cast in favour of the flotation with just 21,145 against the conversion.

The shares are expected to trade at between 220p and 265p when they are floated in London.

Mr Vincent Sheridan, Norwich Union's group general manager in Ireland, said that, subject to approval by the British courts, members will receive further information on the forthcoming flotation, including details of how they can apply for additional shares at a discount. "We are hopeful that a considerable part of the £1.75 billion of new capital which we are planning to raise will come from existing members increasing their shureholding," Mr Sheridan said.

A court hearing to approve the flotation proposal is scheduled for April 23rd. Following the hearing, members should start receiving the prospectus in May.

The flotation will allow the separation of the group's life operations from its more volatile and cyclical general business. It will also strengthen the group's financial position and allow the core life business greater investment freedom.