Prudential paid out £2bn in bonuses to 4 million with-profits investors during 2013 as investment returns hit 8 per cent for some policyholders.
The insurer’s annual with-profits bonus statement, published this morning, reveals an estimated £700m was added to policy values through annual bonuses last year. A further £1.3bn was paid out in final bonuses during the year.
The firm says policyholders will have typically seen their savings grow by between 5 per cent and 8 per cent in 2013. It says bonus rates will be increased or maintained on all unitised plans in 2014.
Prudential actuarial director David Belsham says: “This is another good year for our with-profits policyholders as we continue to demonstrate that investing in a strong with-profits fund can produce good returns for the cautious investor.
“Our fund has consistently outperformed the market over the long-term and has given our customers better returns than many other investment options that are available.
“While we have seen some stabilisation of markets over the last 12 months, the outlook continues to be uncertain and interest rates remain at historically low levels.
“Our fair and consistent approach to setting bonus rates combined with a prudent investment philosophy has enabled us to deliver strong annualised returns for our customers over the medium to long-term.”