Over 60 per cent of Resolution’s with-profits funds have seen a drop in returns since last February which it attributes to the move away from a high inflation environment.
Resolution says with-profits’ long-term payouts for the industry as a whole continued to fall in 2006 and as a result reductions in payouts have been necessary across some funds managed by the life consolidator.
Returns on nine of the 15 funds have fallen, with a 12 per cent fall for policyholders in Scottish Mutual with-profits and 14 per cent for Alba with-profits policyholders between February 2006 and February 2007.
But it has increased payouts on other funds, including former Swiss Life industrial branch payouts which have increased by 23 per cent.
Resolution revealed last week that sales talks with a rival have broken down. The firm’s share price took a hit of 4.2 per cent after the announcement.
In November 2006, the life consolidator announced that it was in talks with various parties about potential acq-uisitions, business combin-ations or a possible offer for the company and it now says it is again looking out for acquisitions.
Group chief actuary Ian Maidens says: “These results demonstrate the specialist management of closed funds can make a material difference to payouts for with-profits policies over time.”