Windsor Life Assurance is aiming to transform the personal liability compensation market with the launch of the UK's first with-profits structured settlement annuity plan.
Windsor, which predominantly operates on a closed-book basis, is launching the plan as it believes the introduction of a with-profits product could improve annuities by up to 69 per cent over 20 years.
Structured settlements are currently only used in 1 per cent of £5bn personal liability claims each year and are des igned for the settlement of personal injury claims. They provide a tax-free annuity to guarantee income for life.
The declining yields of the more traditional index-linked gilts means they have not been an attractive option for claimants. However, Windsor, working alongside market specialists Personal Financial Planning, has developed a product investing in fixedinterest securities, property, and equity shares and the with-profits element should provide annual bonuses.
Chief Executive John Wybrew says: “The combined benefits of a high level of guaranteed income and the potential for future growth through exposure to equity markets is a new feature for the UK.
“We believe this will lead to structured settlements being the preferred means of compensation and will be a benefit to all parties involved.”