Equitable Life has earmarked 12.5 per cent of policy values as at December 31, 2010 to increase payments for with-profits policyholders who leave the group from April 1, 2011.
The enhancement, which is not yet guaranteed, was announced as the company delivered its preliminary 2010 results. The insurer currently holds £694m in capital.
Equitable says the enhancement is “above and beyond” payments promised by Government, and comes as a result of a successful rebuilding of its capital position. It says it aims to redistribute all assets, including its solvency capital, to with-profits policyholders “as fairly as possible” over time.
Equitable Life chief executive Chris Wiscarson says: “We’ve done a lot of talking about what we’d like to do to recreate policyholder value. Today, we’re actually doing what we said we were going to do. May this be the start of a better future for our policyholders.”
The Government has committed to pay £1.5bn in redress to with-profits investors who suffered losses as a result of the near-collapse of the mutual.