Pearl is taking a careful and deliberate approach to capital management in order to protect the long-term interests of policyholders. As such, no annual bonuses for 2003 will be added to traditional (non-unitised) policies. Final (terminal) bonus rates have been reduced, consistent with paying policyholders a fair share of the fund.
Returns on policies maturing this year will be on average 9% lower in value compared with similar policies last year.
The exposure to equities reduced during 2002-2003. In recent years, the primary focus has been to protect contractual benefits and bonuses already added to policies. Last year Pearl informed policyholders about the change in asset mix and the fact that future bonus rates are likely to be lower than in the past. An update to policyholders will be sent out in the coming months.
Despite annual bonuses for 2003 being zero, due to guarantees and smoothing of payments, current benefit payouts continue to exceed policyholders' accumulated share of the fund.
Notes to editors:
- The new rates took effect on 1 January 2004
- At 30 June 2003, the Equity Backing Ratio of Pearl was 29%, made up primarily of equities and property.
This article taken from Pearl Website 1/6/2004
To contact Pearl - Telephone - 0870 970028
