Prudential paid out £2bn in bonuses to four 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 week, reveals that 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 typically will have 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 this year.
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 past 12 months, the outlook continues to be uncertain and interest rates remain at historically low levels.”
Cazalet Consulting founder Ned Cazalet says: “Prudential is on the front row of the grid as far as with-profits underlying asset performance is concerned.
“Much of its with-profits fund investment performance has been used to enhance claim values over and above amounts contractually agreed. That is not always the case for some other with-profits providers.”