Pearl Group has announced it will begin distributing its £500m inherited estate to its one million with-profits policyholders.
Pearl Assurance’s inherited estate is estimated to be worth more than £500m of the closed with-profits £10bn fund.
Distribution of the inherited estate will be in the form of increased final bonuses on maturity of policies and could start as early as July 2007.
Pearl says it is leading the closed with-profits funds sector in distributing its estate to policyholders in a fair manner and the FSA has apparently agreed in principle to the Group’s plans.
Pearl recently announced it has increased the equity backing ratio of its with-profits fund to 50 per cent in a bid to increase investment returns. The EBR has risen from 25 per cent to 50 per cent in the past 18 months.
Pearl Group executive director Hugh Osmond says: “The release of the estate and the re-risking of Pearl in the last 18 months are both unprecedented in the closed fund sector. This demonstrated how the new skills and techniques we are applying to close life books have quite dramatically changed the prospects for Pearl policyholders in a short time.”
Pearl Assurance managing director Jonathan Moss says: “The estate distribution will enable Pearl Group policyholders to benefit from tangible increases in payouts when their policies mature. Pearl is unlocking value for policyholders in ways new to both open and closed life companies.”