Legal & General has held annual bonus rates on its conventional with-profits funds despite assets returning 12.8 per cent over the year.
A spokesman says around 200,000 of the insurer’s 660,000 with-profits customers hold a conventional policy. He says the decision will allow the firm to “maintain flexibility” when investing in equities and property. L&G says it currently invests 56 per cent of funds in the two asset classes.
L&G with profits actuary Carl Dowthwaite says other with-profit polici: “All of the major asset classes held in our with-profits fund have performed well during 2010, with particularly strong returns in commercial property and equities.”
The company says that, because 25 year mortgage endowment policies are maturing in surplus, final bonus rates will deliver payouts ahead of target.
AWD Chase de Vere head of communications Patrick Connolly says L&G’s with-profits bonus declarations “are probably the most positive we have seen to date”.
He says: “After a strong year for investment markets, some with-profits providers are still cutting annual bonus rates and payouts. However, it is pleasing that L&G has maintained bonus rates at current levels and managed to increase some payouts compared to those made last year.”